Equals (AIM: EQLS), a publicly-listed fintech company, released its preliminary results for the first six months of 2023 today (Tuesday), showing an increase in revenue and record Adjusted EBITDA. Additionally, the company announced a proposal to reduce its capital.
Equals Publishes Preliminary Report for H1 2023
The report shows significant growth in multiple financial metrics, including an increase of 43% in revenue compared to the same period last year. The company also provided an update on its performance for the third quarter of 2023, indicating continued strong growth.
Revenue rose to £45.0 million, which is up from £31.4 million in H1 2022. This growth is partly attributed to £13.6 million generated from the Equals' Solutions platform. Gross profit substantially increased, jumping 59% to £23.6 million. Further, the gross profit margin improved to 52.4% from 47.4% in the previous year. Adjusted EBITDA more than doubled to £9.8 million, compared to £4.9 million in H1 2022. On top of that, a jump of 102% in Adjusted EBITDA allowed the company to reach a record high for this indicator.
The after-tax profit amounted to £4.8 million compared to £0.8 million reported in the same period last year, and the earnings per share (EPS) stood at 2.64 pence versus 0.38 pence in H2 2022.
"This is an outstanding set of results with record revenues combining with improved gross profit retention to yield enhanced profitability," Ian Strafford-Taylor, the CEO of Equals Group plc, remarked.
Although the results are better than those from a year ago compared to the previous half-year (H2 2022), the company's revenue has noticeably declined from £69.7 million.
Equals Group has been busy on the operational front as well. The company completed the acquisition of Oonex, now rebranded as Equals Money Europe, to gain access to the European market. Another notable acquisition was Roqqett, an open banking platform, which has been fully integrated into the company's operations. Investments have additionally been made in Compliance and Risk functions, and an API integration to the Equals Platform has been deployed, opening new distribution channels.
Equals' Q3 2023 Performance and Future Outlook
According to the interim results, the company's performance has carried over into Q3 2023. Year-to-date revenue stands at £63.6 million, which is an increase of 39% over the same period last year. Daily revenues have risen to £370,000, compared to £265,000 in the same period in 2022.
"The first half of 2023 saw strong growth which has continued into Q3 despite an uncertain macroeconomic environment. Given the current trading, and a robust sales pipeline, we look to the future with increased confidence, and we expect to be ahead of expectations for the full year," the CEO added.
#EQLS & my favourite expression “Given the strong current trading, and a robust sales pipeline…and we expect to be ahead of expectations for the full year”
— Aston Girl (@reb40) September 12, 2023
Wonder if the shares will decisively break through the psychological £1 today? 👀 https://t.co/hS182xppYu
Furthermore, Strafford-Taylor mentioned that the company is looking to the future with increased confidence with the current trading conditions and a strong sales pipeline.
Proposed Reduction in Share Premium Account
In a separate announcement, Equals has announced plans to propose a Capital Reduction of £25 million. The proposal will be part of a general meeting of the company's shareholders scheduled for 3 October 2023. If approved, the Capital Reduction could pave the way for future returns to shareholders, including dividends and share buybacks.
The Capital Reduction aims to reduce the Company's Share Premium Account from £25,000,000 to £31,648,823.20. The proposal is subject to approval by the company's shareholders during a general meeting. The High Court must also confirm the cancellation for the Capital Reduction to take effect. If all conditions are met, the Capital Reduction is expected to be completed by mid-Q4 2023.
"Results, coupled with our continued cash generation, enable us to announce our intention, conditional, inter alia, upon the completion of the proposed capital reduction, to pay our maiden dividend of 1.5 pence per share in respect of the financial year 2023, while continuing our growth strategy," the CEO concluded.
