(Alliance News) - Equiniti Group PLC on Thursday reported a pretax loss and a drop in revenue for 2020, as the payment and financial administration services provider was hurt by companies cancelling dividends and central banks cutting interest rates.
Shares were down 3.1% to 125.25 pence in London.
The Crawley, West Sussex-based company swung to a pretax loss of GBP6.6 million, after making a GBP39.8 million profit in 2019. Revenue fell 15% to GBP471.8 million from GBP555.7 million.
Equiniti will not pay a dividend for 2020, after paying 1.95 pence per share the previous year. It said it will resume dividends once new orders translate into profit growth, leverage falls and free cash flow to equity holders continues.
The company said it faced a "very challenging environment" in 2020, with clients cancelling dividends and rights issues. Meanwhile, central bank cuts to interest rates cost Equiniti GBP16.9 million in income.
But it will return to profitable growth as market conditions normalise, as long-term growth drivers remain intact, the company insisted.
Equiniti is also undergoing boardroom changes, announcing on Thursday that Chief Financial Officer John Stier will step down once a replacement is installed. New Chief Executive Paul Lynam started in the role on Thursday, replacing Guy Wakeley.
"The outlook for capital market activity in 2021 is encouraging and we have started the year well with a number of important new business wins. Our focus is on driving performance and market share, while reducing the group's debt and delivering on our cost initiatives to offset reduced interest income in a low interest rate environment," Interim Chief Executive Cheryl Millington said.
By Ivan Edwards; ivanedwards@alliancenews.com
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