CORRECT: Equiniti Profit Lower Amid Costs Despite Revenue Growth

(Clarifying the impact of Eqiniti's Wells Fargo Shareowner Services acquisition on its 2017 dividend per share.)

LONDON (Alliance News) - Equiniti Group PLC increased its total payout to shareholders Wednesday after profit fell in 2017 on higher costs despite revenue growing amid a challenging trading environment.

In 2017, pretax profit narrowed to GBP25.6 million from GBP28.5 million the year prior. This was despite revenue growing to GBP406.1 million from GBP382.6 million the year before.

Profit was hurt by a rise in administrative costs to GBP318.1 million from GBP295.2 million the year before. It was also hit by a GBP10.5 million non-operating charge chiefly related to Equiniti's recent acquisition of Wells Fargo Shareowner Services.

In July 2017, Equiniti - a financial technology outsourcer - announced it would buy the share registration and services business of US banking giant Wells Fargo & Co in USD227.0 million cash and shares deal. The deal closed in early February.

Equiniti proposed a 2.73 pence final dividend, down 6.2% from 2.91p the year prior. For the full year, the dividend was 5.7% lower at 4.48p per share compared to 4.75p the year prior. However, on an underlying basis - removing the dilutive effect of the Wells Fargo Shareowner Services deal - the full year dividend increased 6.3% to 5.05p per share from 4.75p.

In total, Equiniti will pay GBP17.7 million in dividends for 2017, up from GBP10.3 million in 2016.

"We are pleased with progress against our strategic objectives during 2017, having delivered accelerating organic growth during the second half, whilst securing a landmark entry into the exciting US market," Equiniti Chief Executive Officer Guy Wakeley said.

"Despite the challenging operating environment," Wakeley added, "we have grown revenue and profit ahead of expectations whilst demonstrating our consistent ability to grow operating margins whilst delivering strong cash generation."

"Our acquisition of Wells Fargo Shareowner Services creates a truly multinational opportunity both for core share registration products as well as our broader suite of technology and share plan solutions in a large and growing market," Wakeley said.

"Equiniti operates in an environment characterised by significant change, driven by regulation, digitisation and cost reduction," Wakeley continued. "The relevance of our services and automated technology capabilities has never been greater, and through 2018 our intent remains to deliver organic revenue growth, supplemented by growth from capability enhancing acquisitions whilst integrating our new US operations, creating a platform for significant future growth."

Shares in Equiniti were 1.8% higher at 291.50 pence on Wednesday.