21 Nov 2017 07:00
21 November 2017
EQUINITI GROUP PLC - TRADING UPDATE
Equiniti Group plc ("Equiniti" or "the Group"), the specialist technology outsourcer providing non-discretionary payment and administration services, today issues the following trading update for the period 1 July 2017 to 21 November 2017.
TRADING
Trading in the period is in line with market expectations for full year 2017.
Our business is underpinned by the strength of our key client relationships, and we have continued to retain or extend all mandates, including those with AstraZeneca, Land Securities Group, Lloyds Banking Group, Smiths Group and Virgin Money Holdings (UK). This, coupled with corporate action activity and software sales, has accelerated momentum in the second half.
New client wins have been pleasing as we have continued to gain market share, with a record number of share registration clients choosing to move from our competitors. We are delighted to welcome Jardine Lloyd Thompson Group and Rentokil Initial as clients of the Group. We have also successfully migrated J Sainsbury as a new registration and share plan client during the period. Furthermore, we have grown our client base through the IPO market securing 75% of mandates from newly listed companies year to date. Our most recent wins include Bakkavor, Charter Court Financial Services, ContourGlobal, TI Fluid Systems, Ultimate Products and Velocity Composites. We have a strong pipeline of organic opportunities which will support future growth.
PROPOSED ACQUISITION OF WELLS FARGO SHAREOWNER SERVICES (WFSS)
On 12 July 2017, the Group announced the proposed acquisition and carve out of WFSS for a total cash consideration of £176m. The acquisition was approved at a General Meeting held on 28 September 2017 with 99.99% of shareholders voting in favour of the acquisition and a 97.43% uptake of the associated rights issue. The acquisition is proceeding as planned with completion expected in Q1 2018.
The joint programme team is making good progress in preparing for the integration of the business on completion of the transaction and the subsequent deployment of Equiniti's Sirius technology into the US market. Our plans for the business have been received with enthusiasm and support from existing major clients and transferring staff.
The Group's guidance on one-off transaction costs remains unchanged at c£17m and relates to advisory, debt and equity issuance costs. We also reaffirm previous guidance on transaction-related exceptional costs of c£20m by full year 2019, with c60% to be incurred during 2018 and transaction-related capital expenditure costs of c£22m by full year 2019, with c80% to be incurred during 2018.
IFRS 15 - REVENUE FROM CONTRACTS WITH CUSTOMERS
We have assessed the impact of IFRS 15 and at this stage we do not believe there will be a material impact on the Group's results. It is not our intention to early adopt IFRS 15 and our 2017 financial results will be prepared under current financial standards. However, the Group will provide additional quantitative disclosure on the impact of IFRS 15 on its income statement and balance sheet as part of the presentation of the 2017 financial results.
OUTLOOK
Our objective remains to deliver organic revenue growth supplemented by growth from capability enhancing acquisitions. The dependability of our revenues, the platform nature of our operations and progressive deleveraging will enable us to grow underlying profits and earnings ahead of revenue.
We continue to make progress against this strategy with multiple opportunities for future growth and are pleased to reaffirm our guidance for full year 2017.
FINANCIAL CALENDAR
7 March 2018 Full year results announcement
3 May 2018 AGM and trading update
27 July 2018 Interim results announcement
For further information please contact:
Analyst/Investor enquiries:
Equiniti Group plc Guy Wakeley, Chief Executive +44 (0) 207 469 1811
John Stier, Chief Financial Officer Frances Gibbons, Head of Investor Relations
Media enquiries:
Temple Bar Advisory Alex Child-Villiers + 44 (0) 7795 425580Will Barker + 44 (0) 7827 960151
Forward-looking statements
This announcement contains forward-looking statements regarding Equiniti. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties, including market conditions and other factors outside of Equiniti's control. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. Equiniti undertakes no obligation to publicly update any forward-looking statement contained in this release, whether as a result of new information, future developments or otherwise, except as may be required by law.