Interim Results
10/09/2024 07:00
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RNS Number : 5072D Equals Group PLC 10 September 2024
10 September 2024
Equals Group plc
('Equals' or the 'Group')
Interim Results
'Significant revenue growth, record Adjusted EBITDA and strong balance sheet'
Equals (AIM: EQLS), the fintech payments group focused on the Enterprise and
SME marketplaces, announces its interim results for the six months ended 30
June 2024 (the 'period' or 'H1-2024') and an update on trading for 49 trading
days for the period from 1 July 2024 to Friday 6 September 2024 ('Q3-2024').
H1-2024: Financial Summary
H1-2024 H1-2023 Change
£ millions £ millions % (**)
Underlying transaction values 9,314 5,964 +56%
Revenue 60.0 45.0 +33%
Gross profit 34.4 23.6 +46%
Gross profit % 57.4% 52.4%
Adjusted EBITDA* 12.7 9.8 +30%
Adjusted profit* 9.1 6.9 +32%
Operating profit 6.6 5.5 +20%
Adjusted Profit after taxation 7.8 6.2 +26%
Profit after taxation 5.2 4.8 +8%
Adjusted EPS (Basic, in pence) 4.18 3.42 +22%
EPS (Basic, in pence) 2.76 2.64 +5%
Notes
* The term 'Adjusted' (including Adjusted EBITDA, Adjusted Profit and Adjusted
EPS) excludes: share option charges, amortisation of acquired intangibles,
items of an exceptional nature and size. EBITDA is defined as operating
profit before depreciation and amortisation.
**Percentages are calculated based on underlying rather than rounded figures.
H1-2024: Financial Highlights
· Record transaction values, with revenues up 33% to £60.0 million (H1-2023:
£45.0 million) including £24.8 million derived from the Solutions platform
(H1-2023: £13.6 million)
· B2B now represents 87% of total Revenue, up from 83%
· Further improvements to gross profit margin, increasing to 57.4% from 52.4%
· Adjusted EBITDA* increased by 30% to £12.7 million (H1-2023: £9.8 million)
· £1.9 million paid as a final dividend during the period (H1-2023: £ nil)
· £20.5 million Cash at Bank up from £18.7 million at 31 December 2023 despite
£1.9 million spent on discharging the liabilities relating to the
acquisitions made in FY-2023
· Basic EPS rising to 2.76 pence from 2.64 pence in H1-2023
· Interim dividend of 1.0 pence (H1-2023: 0.5 pence)
H1-2024: Operational and Product Highlights
· Completion of automated 'payment sending service' ('PSS') for outbound
payments
· Equals Money Europe onboarded by tier-1 Banking partner to achieve
functionality parity with Equals in UK
· Completion of remediation of Equals Money Europe for known pre-acquisition
regulatory and compliance issues
· FairFX card product migrated to Equals core platform
Q3-2024 Trading (1 July 2024 to 6 September 2024)
· Year-to-date revenue of £86.9 million, up 38%, from £63.0 million on the
same period in 2023
· Q3-24 revenue averaging £549k per day against £383k in the same period in
2023
· Cash at bank, £28.3 million at 6 September 2024
Commenting on the Interim Results, Ian Strafford-Taylor, CEO of Equals Group
plc, said:
"This has been another strong half for Equals, which continues to process
transactions at record levels with SME clients and larger corporates
recognising the value of our well-invested proposition. Indeed, our H1 total
transaction values are 120% greater than that of two years ago, and 44%
greater year-on-year, reflecting our sustained investment into product
development and expansion of our addressable market. The operational
leverage that this scale is providing is evident in our increased gross margin
and the growth of the Group's profitability.
"Our strategy to continue growing the total addressable market continues to be
aided by the white labelling of our product suite, meaning clients can operate
as distribution partners for our platform. Our offering in Europe provides
another growth opportunity that we are capitalising on. Management's laser
focus on B2B as a route to market is fundamental to the growth of the
business, not just at the top line but also in terms of profitability and cash
generation. We will continue to invest in our platform and proposition in
line with our objective to further broaden our addressable market.
"In the light of our strong performance to date in 2024, I am pleased to
announce an interim dividend of 1 pence."
This announcement contains inside information.
- Ends -
For more information, please contact:
Equals Group plc
Ian Strafford-Taylor, CEO Tel: +44 (0) 20 7778 9308
Richard Cooper, CFO www.equalsplc.com (http://www.equalsplc.com)
Canaccord Genuity (Nominated Adviser & Broker)
Max Hartley / Harry Rees Tel: +44 (0) 20 7523 8150
Burson Buchanan (Financial Communications)
Henry Harrison-Topham / Steph Whitmore / Toto Berger Tel: +44 (0) 20 7466 5000
equals@buchanan.uk.com (mailto:equals@buchanan.uk.com) www.bursonbuchanan.com (http://www.buchanan.uk.com)
Chief Executive Officer's Report
The Group continues to be making global money movement simpler and quicker for
business customers via its B2B platforms, Equals Money for SME customers and
Equals Solutions for larger corporates. In accordance with this, the Board's
objective for 2024 is to build upon the platform created and to increase the
total addressable market ('TAM') for the Equals product offerings, whilst
concurrently continuing to add functionality to the platform. Equals has
achieved these objectives in H1-2024 by the combination of geographical
expansion, technological enhancements, and improved sales and marketing
supported by further investment.
During H1-2024, Equals Money Europe ('EMEU') adopted the features of our UK
offering following the integration with a tier-1 bank enabling our BE-prefixed
IBAN's to offer the same range of currencies. The enhanced capabilities of
EMEU are expected to drive further growth and expansion of our TAM in H2-2024
and beyond.
Increase in TAM via technology has been achieved by enabling customers to
consume all the services of the Equals platform via direct API integrations
which opens up Equals to a wider range of potential customers, particularly
with larger Corporates who require a direct integration into their systems,
often called 'host-to-host'. The APIs enable customers to either consume our
services directly, or we can white-label the platform so clients can re-sell
it to their own customers, a 'powered by Equals' approach. To aid the speed
of customer acquisition in this space, Equals has created a dedicated
technical onboarding team of engineers to work with our customers on systems
integration.
In essence, Equals has evolved from an initial product suite which was direct
to customer, so B2B and B2C. The abilities we now have allow us to also
offer B2B2B/C (or B2B2X) which effectively means that other businesses can use
our capabilities to sell to their own customer base. Effectively, the
customer of Equals becomes a distribution partner for the Equals platform.
The advances the Group made in its offering, combined with improved Sales and
Marketing capabilities, meant the Group continued to grow in the first half of
2024, delivering the following strong headline financial performance:
· Transactions executed on the Group's platforms increased by 56%
to £9,314 million (H1-2023: £5,964 million)
· Revenue increased by 33% to £60.0 million (H1-2023: £45.0
million)
· Adjusted EBITDA increased by 30% to £12.7 million (H1-2023:
£9.8 million)
A detailed financial analysis is presented in the Report of the Chief
Financial Officer which follows this statement.
The investments made by the Group over previous years have been instrumental
in driving the current strong performance. These investments fall into two
major categories, namely internal product development and acquisitions.
Investment into internal product development remains vital to driving the
business forward and we anticipate keeping our spend in this area at a
consistent level going forwards.
Investment into acquisitions has also played a key role in previous years and
the Group is consistently alert to possible transactions. As we have
demonstrated, all our previous acquisitions have been successfully integrated
and have been accretive, giving further confidence in our ability to perform
further M&A activity as opportunities arise, particularly with our strong
balance sheet.
The success of the Equals strategy for growth is firstly evident in the volume
of transactions processed over its systems. The half-yearly trend is
presented below:
£ millions
H1-2022 H2-2022 H1-2023 H2-2023 H1-2024
Transaction value 4,163 5,053 5,964 6,448 9,314
% growth on half year 4% 21% 18% 8% 44%
This consistent growth in transaction volumes translates into half-yearly
revenue growth as shown below.
Revenue by six-month period, in £ millions
H1-2022 H2-2022 H1-2023 H2-2023 H1-2024
Medium enterprises 10.3 12.1 14.0 15.1 15.0
Consumer and small business 7.7 9.0 8.5 8.7 9.3
White-label 7.2 7.8 8.9 7.8 8.6
Large enterprises 6.2 9.4 13.6 17.4 24.8
Europe - - - 1.7 2.3
Total 31.4 38.3 45.0 50.7 60.0
Sales & Marketing
In H2-2024 the Group continued to evolve the structure of its Sales and
Marketing teams in line with its focus on B2B customers. Optimisation of B2B
customer acquisition requires strong processes for lead generation and
outbound sales augmented by high converting digital assets and cost-effective
digital marketing.
Equals has continued to strengthen its sales capability by recruitment of
experienced professionals capable of consultative selling combined with
specific sector expertise.
In addition, as Equals increasingly makes strides in the B2B2X space, the
Group has hired a dedicated Head of Sales for this market segment with more
recruitment in progress.
Equals continues to utilise 'face-to-face' sales where possible and has
increased its presence at industry trade shows and has salespeople
consistently travelling to meet customers. The direct sales efforts are
augmented by a sales operations team to ensure peak efficiency and conversion.
Profitability
A 33% increase in revenues, improvement in gross profit margin, tight cost
control in a tough labour market, combined to result in adjusted EBITDA
increasing from £9.8 million in H1-2023 to £12.7 million in H1-2024. As
CEO, this a performance I am immensely proud of, and is a testament to the
hard work and product delivery of all the employees.
As stated in our interim trading statement, overall profitability is helped by
our interest income, which is earned on client safeguarded funds. Equals
allocates interest income to the product line that generates the balances.
Whilst Equals does not expect interest rates to revert to near 0% levels,
some retracing of interest rates is likely. Equals expects to be able to
offset this with continued growth in balances combined with extracting better
rates from our banking partners.
We have continued to invest in our growth plans, supported by interest income,
via increased headcount in sales, marketing, compliance and engineering such
that the Group has capacity in place for significant expansion in business
volumes.
Dividend
Equals became dividend paying in 2023 with a maiden interim dividend of 0.5
pence per share announced on 9 November 2023 followed by a final dividend of 1
pence per share announced on 22 April 2024. Given consistent growth, as
shown above, and strong cash generation, Equals is pleased to propose an
interim dividend of 1 pence per share and a further announcement will be made
in due course.
No Impact of Dividend on Consortium Proposal
On 10 July 2024 the Board of Equals announced that it had received an improved
indicative non-binding proposal from the consortium (the 'Consortium')
comprising Embedded Finance Limited and TowerBrook Capital Partners (U.K.) LLP
regarding a possible all-cash offer for the entire issued and to be issued
share capital of Equals at a price of 135 pence per Equals Share (the
'Proposal'). The Consortium was subsequently expanded to include J.C.
Flowers & Co. LLC on 4 September 2024.
As disclosed alongside the Proposal, in accordance with Rule 2.5(a) of the
Code, the Consortium has reserved the right to make an offer for Equals on
less favourable terms than those initially set out in the 10 July 2024
announcement (i) with the agreement or consent of the Board of Equals; or (ii)
following the announcement by Equals of a Rule 9 waiver pursuant to the Code;
or (iii) if a third party announces a firm intention to make an offer or a
possible offer for Equals which, at that date, is on less favourable terms
than those contemplated by the Proposal; or (iv) if Equals announces,
declares, makes, or pays any dividend or any other distribution or return of
value to shareholders, by making an equivalent reduction to the Proposal.
The Consortium has confirmed that it does not intend to invoke this right in
relation to the interim dividend declared today meaning that, should it
proceed to make a formal offer for Equals, shareholders will be entitled to
receive the interim dividend in addition to any offer consideration payable by
the Consortium should it proceed to make a formal offer for Equals.
The proposal for the interim dividend is being made with the consent of the
Consortium.
Current trading and outlook
The Global macroeconomic environment continues to be challenging but is
showing signs of change, with consensus towards lower interest rates and
falling inflation but concurrently stalling economic growth. Against this
market backdrop, Equals continues to grow strongly because it has a product
and capability suite that is hard to replicate.
In Q3 2024 to date, revenues continued to perform strongly reaching £86.9
million on a year-to-date basis as of Friday, 6 September 2024. This is 38%
ahead of the same period in 2023 and represents average revenues per working
day over the period from 1 January up to 6 September of £500k compared to
£371k per day in the prior year.
As stated, Equals has increased its TAM by adding the capability for customers
to connect via API. Whilst these customers take longer to on-board, due to
the requirement to connect their systems directly to Equals Core, they are
typically larger in size, and are already contributing to revenue growth.
The current pipeline for new Solutions customers, both via direct login and
API, is strong and with Equals Money Europe now having full-service capability
the Board believes that Equals is well positioned to further increase its
addressable markets and distribution channels to drive growth.
Ian Strafford-Taylor
Chief Executive Officer
10 September 2024
REVIEW OF THE CFO
Total revenue in H1-2024 reached £60.0 million, up 33% on H1-2023 (£45.0
million) and up 18.3% on H2-2023 (£50.7 million).
Adjusted EBITDA in H1-2024 was £12.7 million, up 30.0% on H1-2023 (£9.8
million) and 15.7% on H2-2023 (£10.8 million).
The period under review reflects the acquisition of Oonex on 4 July 2023 and
the disposal of the FX Bureau in March 2023.
On a like-for-like basis the key metrics are:
£ millions Revenue Adjusted EBITDA
H1-2023 as originally reported 45.0 9.8
Less: FX Bureau disposed in March 2023 (0.1) (0.1)
Add: Pre-acquisition results from Oonex in H1-2023 1.4 (1.8)
H1-2023 comparison 46.3 7.9
H1-2024 actuals 60.0 12.7
% change in like for like 29.6% 60.8%
Profit before tax has been impacted by the costs of the Strategic Review which
amounted to £0.6 million in both H1-2024 and in H2-2023.
Cashflows have been affected in the period by a number of items, including:
· £1.9 million associated with earn-outs or the discharge of
liabilities acquired through acquisitions;
· £1.9 million dividend paid;
· £2.4 million swing in working capital (now reversed); and,
· £0.6 million in professional fees incurred on the Strategic Review.
The Group had £20.5 million of cash at 30 June 2024 and £28.3 million at 6
September 2024. In terms of our liquidity measures (which include cash
balances with liquidity providers, card intermediaries but less customer
segregated balances) the Group had £20.9 million at 30 June 2024 and £28.4
million at Friday, 6 September 2024.
Totals may not sum due to rounding. Percentages are calculating on underlying
figures before rounding. Where costs cannot be accurately attributed to each
segment, they have been allocated on the basis of revenue.
Table 1: Income and expense account
H1-2024 H1-2023 H2-2023
£ millions £ millions £ millions
Trading revenue 50.4 40.8 43.7
Interest revenue 9.6 4.2 7.0
Total Revenue (table 3) 60.0 45.0 50.7
Gross Profits (table 4) 34.4 23.6 28.7
Less: Marketing (2.1) (1.2) (1.4)
Contribution 32.4 22.4 27.4
Net Expenditure (table 5) (19.7) (12.7) (16.5)
Adjusted EBITDA 12.7 9.8 10.8
Less: Share option expense (1.1) (0.7) (0.7)
Less: Acquisition costs - - (1.4)
Less: Exceptional items (0.6) - (0.7)
EBITDA 11.0 9.1 8.0
IFRS 16 Depreciation (table 6) (0.4) (0.3) (0.4)
Other depreciation (table 6) (0.2) (0.2) (0.3)
Amortisation of acquired intangibles (table 7) (0.8) (0.7) (1.0)
Other amortisation (table 7) (2.7) (2.5) (2.9)
(4.1) (3.7) (4.6)
Contingent consideration credit - 0.2 0.3
Gain on disposal of Travel Cash CGU 0.4 -
(4.1) (3.1) (4.3)
EBIT 6.9 5.9 3.8
Lease interest (0.1) (0.1) (0.1)
Foreign exchange differences (0.3) - (0.3)
Contingent consideration finance charges - - (0.1)
(0.4) (0.1) (0.5)
PROFIT BEFORE TAXATION 6.5 5.8 3.3
Corporate and deferred taxation (1.3) (1.0) (0.4)
PROFIT FOR THE PERIOD 5.2 4.8 2.9
Table 2: EBITDA bridge from previous half-year (H2-2023)
£ millions
H2-2023 Adjusted EBITDA 10.8
Higher interest earnings 2.8
Higher trading gross profits from increased revenues 2.9
Offset by: Higher marketing, including events and sponsorships (0.7)
Higher headcount, and staff costs including increases in EMEU (2.0)
Higher IT costs arising from higher transaction volumes (0.8)
Higher compliance costs arising from increased monitoring of transactions and (0.6)
more clients being onboarded
Reduction in other expenditure through robust cost control 0.3
H1-2024 Adjusted EBITDA 12.7
Table 3: Revenue analysis
The table below shows the revenue for the last five periods of six months,
split by customer grouping and within than the type of business provided.
By segment, including interest allocated to segments
£ millions H1-2022 H2-2022 H1-2023 H2-2023 H1-2024
International Payments 6.9 8.0 9.2 9.7 10.3
Cards 3.4 4.1 4.8 5.4 4.7
Medium enterprises 10.3 12.1 14.0 15.1 15.0
International Payments 2.1 2.4 1.9 1.9 2.6
Cards 2.3 2.8 2.4 2.6 2.7
Banking 2.8 3.3 4.1 4.2 4.0
Consumer and small business 7.2 8.5 8.4 8.7 9.3
White-label 7.2 7.8 8.9 7.8 8.6
White-Label
Large enterprises ('Solutions') 6.2 9.4 13.6 17.4 24.8
Europe - - - 1.7 2.3
Bureau de change 0.5 0.5 0.1 - -
Total 31.4 38.3 45.0 50.7 60.0
By income type
FX 21.4 23.5 24.7 22.4 25.2
Fees 9.9 13.9 16.1 21.3 25.2
Total, trading revenue 31.3 37.4 40.8 43.7 50.4
Interest 0.1 0.9 4.2 7.0 9.6
Total 31.4 38.3 45.0 50.7 60.0
Trading revenue, excluding interest
Trading revenue increased 15% to £50.4 million from H2-2023 (£43.7 million)
and by 23.5% from H1-2023.
Interest
Interest income on safeguarded customer funds rose to £9.6 million, up from
£7.0 million in H2-2023 and £4.2million in H1-2023.
Interest is earned on balances maintained in GBP, EUR and USD. Interest
earning balances have risen sharply from an average of £313 million in
H1-2023 to £350 million in H2-2023, £438 million in Q1-2024 and £533
million in Q2-2024.
Interest earning balances in Tier-1 banks in July 2024 closed at £620 million
earning an aggregate of 3.76%. The approximate mix of balances by currency
is: USD 48%, EUR 27%. GBP 25%. Thus the impact of the growth of balances,
more than offsets the recent reduction in UK interest rates announced by the
Bank of England on 1 August 2024.
The Group dynamically manages balances and interest rates, having positively
renegotiated across the three Tier-1 banks used. A new Tier-1 bank has been
recently onboarded with highly competitive rates.
Interest is a key component of pricing across all product segments by
dominated by Solutions. Thus, revenue by segment is shown gross of interest.
Revenue by distribution channel
The Group has two distribution channels: direct, or via affiliates. The
Group has been building up its direct sales team which naturally increases
staff costs, but, produces a higher gross margin as there is less 'pay-away'
to affiliates and staff commissions can be controlled better.
Revenue from direct channels is around 48% of the total, marginally up on
H1-2023 (47%).
Revenue by customer type
The Group has been pivoting away from its B2C origins for some time, disposing
of the FX Bureau in March 2023 and having little focus on marketing to B2C
customers in cards ('FairFX') and in Banking ('CardOneMoney').
The percentage of revenue from B2B has increased from 75.5% in H1-2022 to
82.8% in H1-2023 and now to 87.1% in H1-2024.
Revenue by type
As the Group develops, it has not only pivoted away from B2C but also focused
towards more recurring revenue. Of the trading revenue, fees now represents
50% as compared to 39% in H1-2023 and 32% in H1-2022.
Revenue by segment
a. Solutions
Solutions now represents over 41% of Group revenues.
The investment in technology, systems and compliance processes to enable the
Solutions product to be sold to international customers with complex payment
needs evolved several years ago and enabled a launch in H1-2021. Since then,
revenues have grown thus:
£ millions
H1-2021 0.3
H2-2021 3.3
H1-2022 6.2
H2-2022 9.4
H1-2023 13.6
H2-2023 17.4
H1-2024 24.8
There remains a strong pipeline for new Solutions customers despite the
compliance complexities often involved in onboarding these customers. The
Group has also seen significant transactional growth from existing customers
as Equals becomes more embedded in their own architecture.
b. International Payments
Revenue increased by 17% from £11.1 million in H1-2023 to £13.0 million in
H1-2024 against strong economic headwinds. Revenue from higher-value forward
transactions fell marginally, but overall the number of transactions rose by
11.5%.
Again, there remains a strong pipeline of customers and active customers
increased by 20% during the period.
c. White-label
White-label has grown alongside the rigorous onboard and transaction
monitoring process. The reported figures do not however tell the whole story
as the Group has one, very low margin client historically focused on EU
real-estate transactions who have seen their own revenue stagnate and fall,
and this was particularly evident in H2-2023, whilst other customers (over 120
and growing) have performed much better.
Overall, White-label grew to £8.6 million, up 10.3% over H2-2023 and the
Group has 126 white-label customers representing close to 4,000 end customers.
d. Cards
Both the B2B 'Spend' card and the B2C 'FairFx' card run on the same technology
platform and benefit from the same associations with Mastercard, Marqueta and
Valitor.
Revenues have declined slightly, some of this is attributable to the hangover
of the USA actor strikes, which caused less usage of the product on film
productions, which is a core industry for this product. Having said that,
July 2024 saw a record month for card income, reaching £1.3 million in the
month alone.
e. Banking
The 'CardOneMoney' platform also serves both B2B and B2C, but is a non-core
product and receives minimal marketing investment. Its revenue remains
relatively static at £4.0 million in H1-2024 (H1-2023: £4.1 million).
f. Europe
Oonex SA (now renamed Equals Money Europe SA ("EMEU")) was acquired on 4 July
2023. It has a card business and a 'solutions' style business. Revenues in
the half-year before acquisition were £1.4 million, in H2-2023 they grew
21.4% to £1.7 million.
H1-2024 revenue amounted to £2.3 million, an increase of 32% and, when
compared to H1-2023 (pre-acquisition), it grew by 64.3%.
In early July 2024, external accountants had been able to report to the Board
that EMEU was fully remediated. This opens the door to offering more
product, particularly FX and Solutions into the EU.
GROSS PROFITS
Whilst revenues have grown by 33% over the same period last year, Gross
Profits increased by 46%. The is a result of the impact of interest income
(which has no associated cost), and the changing mix of business including a
greater percentage being derived from direct sales as opposed to affiliates.
Gross profit ratios over the last five six-month periods are shown below:
Table 4 - Gross profit margin %
H1-2022 H2-2022 H1-2023 H2-2023 H1-2024
International Payments 59% 51% 57% 58% 62%
Cards 59% 66% 65% 67% 66%
Medium enterprises 58% 56% 59% 61% 63%
International Payments 71% 71% 68% 68% 68%
Cards 61% 64% 58% 61% 63%
Banking 75% 79% 85% 84% 83%
Consumer, and small business 69% 72% 74% 74% 75%
White-label 11% 13% 19% 21% 14%
Large enterprises (Solutions) 47% 50% 54% 60% 67%
Cash (affiliate from H2-2023) 48% 42% 31% 87% 60%
Europe - - - 56% 57%
Total 47% 49% 52% 56% 57%
MARKETING
The Group has increased its marketing spend, most notably by taking exhibition
stands at industry groups such as 'Money 20/20' and some regional
sponsorships, along with greater investment in SEO. All taken together, the
Group has seen significant potential customer engagement and is closely
monitoring ROI from these initiatives.
EXPENDITURE
In H1-2024 gross costs, including those of EMEU rose to £24 million from
£22.6 million, and increase of 6%. The amount of expenditure added-back to
Adjusted EBITDA was £4.3 million against £6.1 million in H2-2023.
The gross costs were offset as follows:
Table 5: detail of expenditure
£ millions H1-2023 H2-2023 H1-2024
Gross costs 15.7 22.6 24.0
Less:
- software capitalised (staff costs) (2.4) (3.2) (3.0)
- Other IT costs capitalised (0.3) (0.3) (0.3)
- IFRS 16 adjustments (0.3) (0.4) (0.4)
- Acquisition cost - (1.4) -
- Exceptional item - strategic review - (0.6) (0.6)
- Exceptional item - reserves restructuring - (0.1) -
Total of costs above adjusted EBITDA 12.7 16.5 19.7
Of which…
- EMEU (formerly Oonex) - 1.3 2.1*
- All other 12.7 15.2 17.6
12.7 16.5 19.7
The split of these costs is as below:
£ millions H1-2023 H2-2023 H1-2024 Memo - EMEU
Staff costs 9.2 11.1 13.2 1.5
IT & telephone 1.4 1.8 2.6 0.3
Compliance expenditure 0.6 1.0 1.5 0.1
Other professional fees 0.7 1.5 1.2 0.1
Property and similar 0.5 0.7 0.8 0.1
Travel and similar 0.3 0.4 0.4 0.0
Total of costs above adjusted EBITDA 12.7 16.5 19.7 2.1*
Headcount (including contractors)
- Average headcount 333 403 428 33
- Period end headcount 349 421 426 35
Staff costs have increased with both headcount, upskilling and inflationary
wage pressures, along with the acquisition of staff in Oonex (28 originally,
and now 35).
IT & telephone has increased, not just with the take-on of Oonex, but also
ever more hosting charges for the technology stack and transaction volumes
being handled by the Group.
Compliance expenditure represents both a very significant increase in the
tools to monitor transactions and onboarding, along with specific professional
advice relating to changing FCA rules and overseas regulators. The cost is
expected to fall in H2-2024.
Other professional fees remained relatively static but impacted by external
inflationary pressures.
Property includes the serviced offices in EU along with both London and
Chester. The Group has no owned premises.
EXCEPTIONAL ITEMS
Strategic review
The costs of the Strategic Review were:
· H2-2023: £0.7 million
· H1-2024: £0.6 million
Restructuring of reserves
The Group embarked on a restructuring of its reserves in 2023 in order to
create distributable reserves and hence the commencement of payment of
ordinary dividends. This required Court consent, which successfully
concluded in Q4-2023 leading to the payment of 0.5 pence per share dividend in
that period, and a further 1.0 pence per share in June 2024.
DEPRECIATION
Tangible fixed assets are depreciated over the anticipated useful life with a
maximum of 60 months (other than leasehold improvements which is a maximum of
120 months).
Table 6: elements of depreciation charge
H1-2024 H1-2023
£'000s £'000s
IFRS 16 depreciation 355 332
Other depreciation 200 193
555 525
AMORTISATION
Intangible assets acquired on acquisition are amortised over their estimated
useful lives, with a maximum of 60 months for brands and a maximum of 108
months for customer relationships. The charge to amortisation for the year
can be analysed as follows:
Table 7: Components of amortisation charge
H1-2024 H1-2023
£'000s £'000s
Amortisation charge arising from the capitalisation of internally developed
software in the following years:
2018 and earlier 130 272
2019 470 831
2020 447 447
2021 333 288
2022 451 377
2023 520 123
2,351 2,338
Current year, H1-2024 173 -
2,524 2,338
Amortisation charge for other intangibles 197 141
2,721 2,479
Amortisation of acquired intangibles 798 686
Total amortisation charge 3,519 3,165
OPERATING PROFIT
The Group made a profit before taxation of £6.5 million in H1-2024, compared
to £5.8 million in H1-2023.
TAXATION, INCLUDING R&D CREDITS
The Group has recognised a net tax charge of £1,296k (H1-2023: £1,031k).
At 31 December 2023 the Group had usable tax losses of £12.4 million. The
White-label business, Equals Connect Ltd, is profitable and tax paying, as
until 3 October 2022 its profits could not be offset against other group
company losses. At 30 June 2024 it is estimated that the Group has usable
tax losses of £9.1 million.
The Financial statements for the full year of 2024 will be prepared under the
'RDEC' scheme as Equals will have exceeded the SME scheme limits on revenue
and gross assets.
Under the RDEC scheme, the accounting treatment recognises the credit as an
'above the line' adjustment.
This allows 20% of eligible R&D expenditure (staff and IT costs) to be
credited to the P&L as either other income or netted off against R&D
costs, such as staff costs on the income statement. This credit is subject
to corporation tax, resulting in an effective tax rate of 15%, compared to
21.5% under the SME scheme.
The value of the scheme is accounted for in the P&L over five accounting
years, as opposed to one year under the SME scheme, so the impact of the RDEC
scheme appears marginally dilutive. The tables below show the impact on the
financial statements.
Table 8: Impact of RDEC scheme
£ millions H1-2024 H1-2023 FY-2023
Adjusted EBITDA as currently stated 12.7 9.8 20.6
Impact of RDEC (if applied) 0.1 0.1 0.2
Revised EBITDA 12.8 9.9 20.8
Taxation charge as currently stated 1.3 1 1.4
Impact of RDEC (if applied) 0.6 0.6 1.3
Revised taxation charge 1.9 1.6 2.7
Profit after tax as currently stated 5.2 4.8 7.7
Impact of RDEC (if applied) (0.5) (0.5) (1.1)
Revised profit after tax 4.7 4.3 6.6
Currently stated EPS: H1-2024 H1-2023 FY-2023
Basic 2.76p 2.64p 4.22p
Diluted 2.60p 2.52p 4.00p
Adjusted Basic 4.18p 3.42p 7.16p
Adjusted Diluted 3.93p 3.27p 6.79p
Revised EPS:
Basic 2.51p 2.37p 3.59p
Diluted 2.36p 2.27p 3.41p
Adjusted Basic 3.89p 3.14p 6.54p
Adjusted Diluted 3.67p 3.01p 6.20p
Table 9: Balance Sheet
This table shows a compressed 'balance sheet' for the Group. This splits-out
(from the statutory disclosure) certain current assets arising from the
acquisitions being made.
30.06.2024 30.06.2023 31.12.2023
£'000s £'000s £'000s
Internally generated software - cost 35,428 28,723 32,207
Internally generated software - accumulated amortisation (20,931) (15,749) (18,407)
14,497 12,974 13,800
Other non-current assets (other than 'right to use') 32,117 22,965 32,949
IFRS 16 assets, less IFRS 16 liabilities (554) (635) (599)
46,060 35,304 46,150
Liquidity (per Table 12) 20,907 16,621 17,803
Accrued Income and Trade Debtors 7,649 5,577 6,503
Accrued Safeguarded Funding Receivable 1,129 - -
Prepaid advances to Oonex - 1,248 -
Net value of forward contracts 702 827 358
Prepayments 2,026 1,627 1,789
Deferred consideration receivable from the sale of the FX Bureau (received in 100 100 100
July 2024)
Inventory of card stock 408 237 372
Other Sundry Debtors 521 164 196
Current assets as presented in this format 33,442 26,401 27,121
Less:
Accounts payable (2,454) (2,617) (2,831)
Affiliate commissions (3,031) (3,061) (3,135)
PAYE and Vat (1,106) (849) (1,023)
Staff commissions and accrued bonuses (1,869) (1,436) (2,391)
Card Settlement Trade Liabilities (4,193) - -
Purchase accruals and other creditors (3,039) (2,050) (3,700)
Accrued acquired liabilities for Oonex S.A. (627) - (1,519)
Earn-out balances due* (749) (4,605) (1,777)
Net corporation and deferred tax (412) 986 849
Liabilities as presented in this format (17,480) (13,632) (15,527)
Net, as presented in this format 15,962 12,769 11,594
NET SHAREHOLDER FUNDS 62,022 48,073 57,744
At 30 June 2024, the Company has distributable reserves of £20,671k. This is
equivalent to £0.11 per share.
*The June 2024 earn-out balances not paid are attributable to Hamer &
Hamer and the balance remaining could be payable over 2 years from and
including April 2025.
ACQUISITIONS
The Group made a series of acquisitions in 2023, but none in 2024. The table
below shows the impact of these acquisitions:
Table 10: Acquisitions
Total Roqqett Hamer & Hamer* Oonex S.A.
Acquisition date 06.01.2023 20.04.2023 04.07.2023
£'000s £'000s £'000s £'000s
Cash paid at acquisition 1,669 169 1,500 -
Cash paid at acquisition for acquired liabilities 2,461 - - 2,461
Cash paid post-acquisition 835 715 - 120
Total cash paid for acquisitions 4,965 884 1,500 2,581
Shares issued at acquisition 3,190 - - 3,190
Shares issued post-acquisition 500 500 - -
Total shares issued paid for acquisitions 3,690 500 - 3,190
Total cash paid and shares issued for acquisitions 8,655 1,384 1,500 5,771
Fair Value on shares issued 694 - - 694
Performance assessed consideration thereon 85 35 - 50
Capitalised incidental expenses 131 131 - -
Acquired liabilities payable in cash 1,524 - - 1,524
Deferred consideration payable in cash* 768 - 768 -
Deferred consideration payable in shares 810 - - 810
Total consideration transferred 12,667 1,550 2,268 8,849
Fair Value thereon 2,413 664 (30) 1,779
Deferred tax thereon 978 - 369 609
Total acquired 16,058 2,214 2,607 11,237
Goodwill 9,930 - 1,129 8,801
Other intangible assets:
Open Banking Technology 2,214 2,214 - -
Customer Relationships 3,914 - 1,478 2,436
Total intangibles acquired 16,058 2,214 2,607 11,237
By period recognised:
Total H1-2023 H2-2023
£'000s £'000s £'000s
Roqqett 2,214 2,214 -
Hamer & Hamer 2,607 2,607 -
Oonex S.A. 11,237 - 11,237
Total intangibles acquired 16,058 4,821 11,237
* the remaining earn-out balance payable relates to Hamer & Hamer and are
paid on the 1(st), 2(nd) and 3(rd) anniversaries of the acquisition if targets
are met. The maximum earn out is £1.7 million over the three-year period.
The 1(st) anniversary earn out was paid in May 2024.
SHARE CAPITAL AND SHARE OPTIONS
Share Capital
The number of shares in issue at 1 January 2024 was 186,627,898. This
increased in the year through the issue of 1,000,000 shares in relation to the
final tranche of the acquisition of Equals Money Europe SA (previously Oonex
SA), so the number of shares outstanding at 30 June 2024 and at the date of
this report is 187,627,898.
In July 2024, 904,800 share options were exercised by a former employee of the
Group, so at the date of reporting, 10 September 2024 the issued share capital
was 188,532,698.
Share options
At 1 January 2024, the Company had 16,390,301 options outstanding. 35,712
have lapsed during 2024 due to employees leaving the Group. After 30 June
2024 but before the date of this announcement, 904,800 shares have been
exercised and a further 100,000 share options lapsed, thus, at the date of
signing of these financial statements, there were 15,349,789 options,
representing 8.14% of the issued share capital and 7.53% of the fully enlarged
share capital.
The cost of external advice for these schemes amounted to £9k in the period
(H1-2023: £15k).
EARNINGS PER SHARE
Earnings per share are reported/calculated in accordance with IAS 33. For
non-diluted, the result after tax is divided by the average number of shares
in issue in the year. The average number of shares in the period was
187,496,030 (H1-2023: 181,533,904).
The calculation of diluted EPS is based on the result after tax divided by the
number of actual shares in issue (above) plus the number of options where the
fair value exceeds the weighted average share price in the year. The fair
value of options is measured using Black-Scholes and Monte-Carlo. It should
be noted that in accordance with Accounting Standards, this calculation is
based on fair value, not the difference between the market price at the end of
the year or the weighted average price and the exercise price. The weighted
average price was 118 pence (H1-2023: 91 pence), the number of options
exceeding the fair value was 11,546,758 (H1-2023: 8,089,807).
The basic and diluted EPS are shown below:
Basic Basic Diluted Diluted
H1-2024 H1-2023 H1-2024 H1-2023
Profit per share (in pence) 2.76 2.64 2.60 2.52
Adjusted earnings and adjusted EPS
The Group provides the following on EPS adjustments:
H1-2024 H1-2023
£'000s £'000s
P&L YTD Attributable to owners of Equals Group PLC 5,184 4,788
Add back:
- Share option charges 1,066 741
- Amortisation of acquired intangibles 798 686
- Exceptional items* 625 -
- Tax impacts thereon* 155 -
Adjusted earnings 7,828 6,215
The resulting earnings per share are shown below:
Basic Basic Diluted Diluted
H1-2024 H1-2023 H1-2024 H1-2023
Adjusted profit per share (in pence) 4.18 3.42 3.93 3.27
CASHFLOWS AND LIQUIDITY
The movement in the cash position is shown in the table below, splitting out
trading from M&A activities:
Table 11: Cashflows H1-2024 H1-2023 H2-2023
£'000s £'000s £'000s
Adjusted EBITDA 12,661 9,825 10,812
Lease payments (principal and interest) (468) (488) (441)
R&D tax credits received via Roqqett acquisition - 232 -
Exceptional items (625) - (714)
Internally developed software capitalised for R&D:
- Staff (2,959) (2,449) (3,204)
- IT Costs (262) (273) (280)
Purchase of other intangible assets less disposals (242) (284) (128)
Purchase of other non-current assets (121) (252) (226)
7,984 6,311 5,819
Movement in working capital (2,389) (1,063) 36
'Operational Cash inflows' 5,595 5,248 5,855
Acquisition costs expensed through income statement - - (1,377)
Net acquired consideration - (2,746) (1,719)
Acquired Liabilities associated with acquisition (879) - -
Earn-outs (1,028) - (1,092)
Net cash proceeds in Disposal of CGU - 280 -
M&A outflows (1,907) (2,466) (4,188)
Funds from exercise of share options - 97 -
Dividend payments (1,876) - (928)
NET CASHFLOWS 1,812 2,879 739
Opening balance 18,662 15,044 17,923
Closing Balance 20,474 17,923 18,662
Cash per share 10.9p 9.9p 10.2p
Working capital movements commonly comprise:
· Timing differences between accrued and paid affiliate commissions;
· Timing differences between accrued and paid performance related
pay;
· Timing difference between accrued expenses and the settlement of
subsequent invoices;
· Profit transfers from the Client ledgers; and,
· Margin calls (or releases) from liquidity providers.
The Group enhances its reputation by aiming to pay all suppliers on the
invoice due date.
Table 12: Liquidity H1-2024 H1-2023
£'000s £'000s
Cash at bank 20,474 17,923
Balances with liquidity providers 2,503 2,863
Pre-funded balances with card provider 1,370 759
Gross liquid resources 24,347 21,545
Customer balances not subject to safeguarding (3,440) (4,924)
Net position 20,907 16,621
The Group has its principal banking and deposit arrangements with Barclays,
NatWest, Citibank and Blackrock. As a member of RTGS, the Group also holds
interest-earning balances with the Bank of England.
Richard Cooper
Chief Financial Officer
10 September 2024
INTERIM CONSOLIDATED statement OF COMPREHENSIVE INCOME
FOR THE six-month period ENDED 30 june 2024
Period end Period end Year end 31
30 June 2024 30 June 2023 December
Unaudited Unaudited 2023
Audited
Note £000 £000 £000
Revenue on currency transactions 53,625 40,983 85,614
Banking revenue 4,026 4,045 8,350
Europe revenue 2,299 - 1,747
Revenue 2 59,950 45,028 95,711
Direct costs 2 (25,503) (21,425) (43,385)
Gross profit 34,447 23,603 52,326
Administrative expenses 3 (23,806) (14,395) (33,739)
Depreciation (555) (525) (1,228)
Amortisation charge (3,519) (3,165) (7,048)
Acquisition costs - - (1,377)
Total operating expenses (27,880) (18,085) (43,392)
Operating profit 6,567 5,518 8,934
Other income and expenses:
Gain on the sale of the Cash CGU - 380 380
Finance costs 7 (87) (79) (166)
Profit before tax 6,480 5,819 9,148
Tax charge 4 (1,296) (1,031) (1,402)
Profit after tax 5,184 4,788 7,746
Other comprehensive income:
Exchange differences arising on translation of foreign operations - - 6
Total comprehensive income 5,184 4,788 7,752
Profit per share
Basic 2.76p 2.64p 4.22p
Diluted 2.60p 2.52p 4.00p
All income and expenses arise from continuing operations.
INTERIM CONSOLIDATED statement OF FINANCIAL POSITION
FOR THE six-month period ENDED 30 june 2024
As at 30 June 2024 As at 30 June 2023 As at 31 December 2023
Unaudited Unaudited Audited
Note £000 £000 £000
ASSETS
Non-current assets
Property, plant and equipment 1,040 1,215 1,120
Right of use assets 2,672 3,171 2,881
Intangible assets and goodwill 45,575 34,724 45,629
Deferred tax assets 312 1,171 956
49,599 40,281 50,586
Current assets
Inventories 408 237 372
Trade and other receivables 16,149 13,413 13,431
Derivative financial assets 3,976 5,616 4,760
Cash and cash equivalents 20,474 17,923 18,662
41,007 37,189 37,225
TOTAL ASSETS 90,606 77,470 87,811
EQUITY AND LIABILITIES
Equity attributable to equity holders
Share capital 6 1,876 1,818 1,866
Share premium 6 28,498 53,498 28,498
Share based payment reserve 6,534 4,143 5,564
Other reserves 13,546 8,609 13,556
Retained earnings / (deficit) 11,568 (19,995) 8,260
62,022 48,073 57,744
Non-current liabilities
Right of use (lease) liabilities 2,474 3,063 2,730
2,474 3,063 2,730
Current liabilities
Trade and other payables 21,359 20,617 22,079
Current tax liabilities 724 185 106
Right of use (lease) liabilities 753 743 750
Derivative financial liabilities 3,274 4,789 4,402
26,110 26,334 27,337
TOTAL EQUITY AND LIABILITIES 90,606 77,470 87,811
INTERIM CONSOLIDATEd STATEMENT OF changes in equity
For the SIX-MONTH period ended 30 june 2024
Group Share capital Share premium Share based payment Retained earnings / (deficit) Other reserves Total
equity
£000 £000 £000 £000 £000 £000
At 1 January 2023 1,807 53,405 3,231 (24,148) 8,609 42,904
Profit for the period and total comprehensive income - - - 4,788 - 4,788
Purchase of Roqqett reserves - - - (666) - (666)
Purchase of Hamer & Hamer reserves - - - 31 - 31
Share based payment charge - - 726 - - 726
New shares issued 11 93 - - - 104
Movement in deferred tax on share-based payment charge - - 186 - - 186
At 30 June 2023 1,818 53,498 4,143 (19,995) 8,609 48,073
Profit for the period - - - 2,958 - 2,958
Other comprehensive income - exchange differences arising on translation of - - - - 6 6
foreign operations
Purchase of acquisition reserves correction - - - 635 - 635
Share based payment charge - - 693 - - 693
Share options exercised in year 3 - (333) 333 - 3
New shares issued 39 - - - - 39
Shares issued in relation to Roqqett acquisition 6 - - - 494 500
Dividends paid in year - - - (928) - (928)
Share premium reduction scheme - (25,000) - 25,000 - -
Shares issued in relation to Oonex acquisition - - - - 3,844 3,844
Shares yet to be issued in relation to Oonex acquisition - - - - 860 860
Oonex deferred shares - non-payable - - - 50 (50) -
Transfer of Q-Money contingent liability - - - 207 (207) -
Movement in deferred tax on share-based payment charge - - 1,061 - - 1,061
At 31 December 2023 1,866 28,498 5,564 8,260 13,556 57,744
Profit for the period - - - 5,184 - 5,184
Share based payment charge - - 1,057 - - 1,057
Movement in deferred tax on share-based payment charge - - (87) - - (87)
Dividends paid - - - (1,876) - (1,876)
Oonex deferred consideration 10 - - - (10) -
At 30 June 2024 1,876 28,498 6,534 11,568 13,546 62,022
Other reserves comprise:
Merger reserve Arising on reverse acquisition from Group reorganisation.
Contingent consideration reserve Arising on equity based contingent consideration on acquisition of
subsidiaries.
Foreign currency reserve
Arising on translation of foreign operations
INTERIM Consolidated statement of cash flows
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024
Six month period ended Six month period ended Six month period ended
30 June 2024 30 June 2023 31 December 2023
Unaudited Unaudited Audited
£000 £000 £000
Operating Activities
Profit for the period 6,480 5,819 3,329
Adjustments for:
Depreciation 555 525 703
Amortisation 3,519 3,165 3,883
Share based payment charge 1,057 726 693
Increase in trade and other receivables (3,103) (3,431) (2,985)
Decrease in trade and other payables (355) (69) (317)
Decrease in derivative financial assets 784 - 856
Decrease in derivative financial liabilities (1,128) - (387)
(Increase) / decrease in inventories (36) 55 (135)
Finance costs 87 79 88
Net cash inflow 7,860 6,869 5,728
Tax receipts - - 232
Tax paid (120) (192) (153)
Net cash inflow from operating activities 7,740 6,677 5,807
Cash flows from investing activities
Acquisition of property, plant and equipment (121) (401) (78)
Acquisition of intangibles (3,463) (3,005) (3,613)
Net cash used in investing activities (3,584) (3,406) (3,691)
Cash flows from financing activities
Principal elements of lease payments (394) (415) (371)
Interest paid on finance lease (74) (73) (82)
Interest paid - (8) 8
Dividends paid (1,876) - (928)
Proceeds from issuance of ordinary shares - 104 (4)
Net cash used in financing activities (2,344) (392) (1,377)
Net increase in cash and cash equivalents 1,812 2,879 739
Cash and cash equivalents at the beginning of the period 18,662 15,044 17,923
Cash and cash equivalents at end of the period 20,474 17,923 18,662
CONSOLIDATED NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024
1. Basis of preparation
The principal accounting policies applied in the preparation of the Group and
Interim Consolidated financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise
stated. The financial statements have been prepared on a historical cost
basis with the exception of derivative financial instruments which are
measured at fair value through profit or loss.
These financial statements are prepared in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006. The financial statements are presented in sterling, the
Group's presentational currency.
The unaudited consolidated Interim financial statements have been prepared in
accordance with the AIM rules and consistently with the basis of preparation
and accounting policies set out in the accounts of the Group for the period
ended 31 December 2023. The information set out herein is abbreviated and
does not constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006. These interim consolidated financial statements do
not include all disclosures which would be required in a complete set of
financial statements and should be read in conjunction with the 2023 Annual
Report.
The Company is a limited liability company incorporated and domiciled in
England and Wales and whose shares are quoted on AIM, a market operated by The
London Stock Exchange.
a) Critical judgements and estimates
IFRS requires management to make estimates, judgements and assumptions that
affect the application of the Group's accounting policies and the reported
amounts of assets, liabilities, income and expenses. These estimates are
based on the Directors best knowledge and past experience. The existing
critical judgements and estimates set out in note 3.25 of the Group's annual
report for the year ended 31 December 2023 have been reviewed in preparing
these Interim consolidated financial statements and the Directors believe they
remain relevant.
b) Going concern
The Board continues to closely monitor its performance and considers a range
of risks that could affect the future performance and position of the Group.
The Board considers it has a reasonable expectation that it has adequate
resources to continue to operate for the foreseeable future and therefore the
financial statements are prepared on a going concern basis.
2. Segmental Analysis
Based on previously identified cash generating units, the segmental results
were as follows:
Unaudited International Payments Solutions Currency Travel Cash Banking Europe Central Total
Cards
6 months ended 30 June 2024 £000 £000 £000 £000 £000 £000 £000 £000
Segment revenue 21,422 24,765 7,433 5 4,026 2,299 - 59,950
Direct costs (11,564) (9,652) (2,632) (2) (746) (907) - (25,503)
Gross profit 9,858 15,113 4,801 3 3,280 1,392 - 34,447
Administrative expenses - - - - - - (23,806) (23,806)
Depreciation - - - - - - (555) (555)
Amortisation - - - - - - (3,519) (3,519)
Finance costs - - - - - - (87) (87)
Profit / (loss) before tax 9,858 15,113 4,801 3 3,280 1,392 (27,967) 6,480
Current assets - - - - 4,252 1,742 35,013 41,007
Non-current assets 20,995 2,289 5,182 - 9,774 11,047 312 49,599
Total liabilities - - - - (1,895) (1,289) (25,400) (28,584)
Total net assets 20,995 2,289 5,182 - 12,131 11,500 9,925 62,022
Unaudited International Payments Solutions Currency Travel Cash Banking Central Total
Cards
6 months ended 30 June 2023 £000 £000 £000 £000 £000 £000 £000
Segment revenue 19,986 13,587 7,205 129 4,121 - 45,028
Direct costs (11,775) (6,230) (2,650) (90) (680) - (21,425)
Gross profit 8,211 7,357 4,555 39 3,441 - 23,603
Administrative expenses - - - - - (14,395) (14,395)
Depreciation - - - - - (525) (525)
Amortisation - - - - - (3,165) (3,165)
Gain on the sale of the cash CGU - - - 380 - - 380
Finance costs - - - - - (79) (79)
Profit / (loss) before tax 8,211 7,357 4,555 419 3,441 (18,164) 5,819
Current assets - - - - 3,143 34,046 37,189
Non-current assets 22,035 - 5,323 - 2,371 10,552 40,281
Total liabilities - - - - (1,904) (27,493) (29,397)
Total net assets 22,035 - 5,323 - 3,610 17,105 48,073
Audited International Solutions Currency Cards Travel Cash Banking Europe Central Total
Payments
6 months ended 31 December 2023 £000 £000 £000 £000 £000 £000 £000 £000
Segment revenue 19,284 17,384 8,026 13 4,229 1,747 - 50,683
Direct costs (10,677) (7,050) (2,786) (2) (673) (772) - (21,960)
Gross profit 8,607 10,334 5,240 11 3,556 975 - 28,723
Administrative expenses - - - - - - (19,344) (19,344)
Depreciation - - - - - - (703) (703)
Amortisation - - - - - - (3,883) (3,883)
Acquisition costs - - - - - - (1,377) (1,377)
Finance costs - - - - - - (87) (87)
Profit / (loss) before tax 8,607 10,334 5,240 11 3,556 975 (25,394) 3,329
Current assets - - - - 5,045 1,400 30,780 37,225
Non-current assets 21,048 1,956 5,164 - 10,341 11,171 906 50,586
Total liabilities - - - - (1,828) (1,014) (27,225) (30,067)
Total net assets 21,048 1,956 5,164 - 13,558 11,557 4,461 57,744
3. Operating profit
Operating profit is stated after charging the following operating expenses:
6 months ended 30 June 2024 6 months ended 30 June 2023 12 months ended 31 December 2023
Unaudited Unaudited Audited
£000 £000 £000
Marketing costs 2,096 1,206 2,565
Staff costs 13,237 9,194 20,270
Property and office costs 757 517 1,160
Audit fees 404 231 493
Compliance costs 1,515 552 1,508
Other professional fees 1,394 460 2,381
IT and telephone cost 2,557 1,351 3,306
Travel and similar 430 257 633
Foreign exchange loss 328 30 346
Share option charge and other share option related costs 1,066 741 1,447
Contingent consideration - (155) (459)
Other costs 22 11 89
Administrative costs 23,806 14,395 33,739
Depreciation of right of use assets 355 331 692
Depreciation of property, plant and equipment 200 194 536
Amortisation charge 3,519 3,165 7,048
Acquisition costs - - 1,377
Total operating expenses 27,880 18,085 43,392
4. Taxation
6 months ended 6 months ended 30 June 2023 12 months ended
30 June 2024 Unaudited 31 December 2023
Unaudited Audited
£000 £000 £000
Current year corporation tax charge 738 185 259
Current tax charge 738 185 259
Origination and reversal of temporary differences 554 38 534
Recognition of previously unrecognised deductible temporary differences 4 808 844
Deferred tax - prior year adjustment - - (235)
Deferred tax charge 558 846 1,143
Total tax charge 1,296 1,031 1,402
5. Earnings per share
Basic earnings per share is calculated based on the £5,184k profit
attributable to owners of Equals Group plc (H1-2023: £4,788k) divided by the
weighted average number of shares of 187,496,030 in the period (H1-2023:
181,533,904), giving a result of 2.76 pence per share (H1-2023: 2.64 pence per
share).
6. Share capital
6 months ended 30 June 2024 6 months ended 30 June 2024 6 months ended 30 June 2023 12 months ended 31 December 2023
Unaudited Unaudited Unaudited Audited
No. £000 £000 £000
Authorised, issued and fully paid-up ordinary shares of £0.01 each
As at start of period 186,627,898 1,866 1,807 1,807
Issued during the period - share options - - 3 3
Issued during the period - SIP - - 8 10
Issued during the period - Oonex acquisition 1,000,000 10 - 40
Issued during the period - Roqqett acquisition - - - 6
As at end of period 187,627,898 1,876 1,818 1,866
On 4 January 2024, deferred shares of 1,000,000 relating to the Oonex
acquisition were issued as the last tranche payment due.
7. Finance costs
Finance costs comprise: the unwind of discount on the lease liability under
IFRS 16; the unwind of discount on deferred consideration in respect of
business and company acquisitions made by the Group and other financing
interest costs.
- ENDS -
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