LSE:EQN

Stock Analysis Report

Executive Summary

Equiniti Group plc, together with its subsidiaries, provides administration and payment services in the United Kingdom.

Snowflake

Fundamentals

Adequate balance sheet with proven track record.

Share Price & News

How has Equiniti Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EQN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.4%

EQN

3.1%

GB IT

-0.3%

GB Market


1 Year Return

4.4%

EQN

16.0%

GB IT

3.9%

GB Market

Return vs Industry: EQN underperformed the UK IT industry which returned 16% over the past year.

Return vs Market: EQN matched the UK Market which returned 3.9% over the past year.


Shareholder returns

EQNIndustryMarket
7 Day2.4%3.1%-0.3%
30 Day0.4%5.6%1.8%
90 Day14.4%0.9%4.9%
1 Year7.0%4.4%18.6%16.0%9.3%3.9%
3 Year33.8%17.4%93.7%79.2%23.2%7.6%
5 Yearn/a76.2%59.9%34.3%3.8%

Price Volatility Vs. Market

How volatile is Equiniti Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Equiniti Group undervalued compared to its fair value and its price relative to the market?

28.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EQN (£2.29) is trading below our estimate of fair value (£3.19)

Significantly Below Fair Value: EQN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: EQN is poor value based on its PE Ratio (33.2x) compared to the IT industry average (26.1x).

PE vs Market: EQN is poor value based on its PE Ratio (33.2x) compared to the UK market (16.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate EQN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: EQN is good value based on its PB Ratio (1.6x) compared to the GB IT industry average (2.6x).


Next Steps

Future Growth

How is Equiniti Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

3.6%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if EQN's forecast earnings growth is above the savings rate (1.2%).

Earnings vs Market: Insufficient data to determine if EQN's earnings are forecast to grow faster than the UK market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: EQN's revenue (3.6% per year) is forecast to grow slower than the UK market (3.8% per year).

High Growth Revenue: EQN's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EQN's Return on Equity is forecast to be low in 3 years time (14.4%).


Next Steps

Past Performance

How has Equiniti Group performed over the past 5 years?

65.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EQN has large one-off items impacting its financial results.

Growing Profit Margin: EQN's current net profit margins (4.5%) are higher than last year (1.5%).


Past Earnings Growth Analysis

Earnings Trend: EQN has become profitable over the past 5 years, growing earnings by 65% per year.

Accelerating Growth: EQN's earnings growth over the past year (253.5%) exceeds its 5-year average (65% per year).

Earnings vs Industry: EQN earnings growth over the past year (253.5%) exceeded the IT industry 7.3%.


Return on Equity

High ROE: EQN's Return on Equity (5.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Equiniti Group's financial position?


Financial Position Analysis

Short Term Liabilities: EQN's short term assets (£195.1M) exceeds its short term liabilities (£144.3M)

Long Term Liabilities: EQN's short term assets (195.1M) do not cover its long term liabilities (450.6M)


Debt to Equity History and Analysis

Debt Level: EQN's debt to equity ratio (73.8%) is considered high

Reducing Debt: EQN had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: EQN's debt is well covered by operating cash flow (22.2%).

Interest Coverage: EQN's interest payments on its debt are well covered by EBIT (4.9x coverage).


Balance Sheet

Inventory Level: EQN has a low level of unsold assets or inventory.

Debt Coverage by Assets: EQN's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Equiniti Group's current dividend yield, its reliability and sustainability?

2.38%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%2.0%markettop25%5.3%industryaverage2.4%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: EQN's dividend (2.38%) is higher than the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: EQN's dividend (2.38%) is low compared to the top 25% of dividend payers in the UK market (5.3%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, EQN has been paying a dividend for less than 10 years.

Growing Dividend: EQN's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (79.1%), EQN's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: EQN's dividends in 3 years are forecast to be well covered by earnings (30% payout ratio).


Next Steps

Management

What is the CEO of Equiniti Group's salary, the management and board of directors tenure and is there insider trading?

4.4yrs

Average management tenure


CEO

Guy Wakeley (48yo)

5.8yrs

Tenure

UK£3,530,000

Compensation

Mr. Guy Richard Wakeley has been the Group Chief Executive Officer of Equiniti Group plc since June 2018. Mr. Wakeley was Chief Executive Officer of Equiniti Group plc since January 27,2014 until June 2018 ...


CEO Compensation Analysis

Compensation vs Market: Guy's total compensation ($USD4.53M) is above average for companies of similar size in the UK market ($USD1.15M).

Compensation vs Earnings: Guy's compensation has increased by more than 20% in the past year.


Management Age and Tenure

4.4yrs

Average Tenure

48yo

Average Age

Experienced Management: EQN's management team is considered experienced (4.4 years average tenure).


Board Age and Tenure

2.2yrs

Average Tenure

54yo

Average Age

Experienced Board: EQN's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: EQN insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

BuyUK£9,94609 Oct 19
Guy Wakeley
EntityIndividual
Role
Chief Executive Officer
Group CEO & Director
Shares5,011
Max PriceUK£1.98
SellUK£33,02127 Sep 19
Paul Matthews
EntityIndividual
Shares15,000
Max PriceUK£2.20
BuyUK£23,65919 Dec 18
Philip Yea
EntityIndividual
Role
Chairman of the Board
Independent non-executive Chairman
Shares12,000
Max PriceUK£1.97
BuyUK£107,79619 Dec 18
Timothy John Miller
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares54,168
Max PriceUK£2.03

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • John Stier (53yo)

    CFO & Director

    • Tenure: 4.4yrs
    • Compensation: UK£2.38m
  • Jim Brown

    Director of Corporate Development

    • Tenure: 0yrs
  • Frances Gibbons

    Head of Investor Relations

    • Tenure: 0yrs
  • Guy Wakeley (48yo)

    Group CEO & Director

    • Tenure: 5.8yrs
    • Compensation: UK£3.53m
  • Kevin O’Connor (55yo)

    Chief Information Officer

    • Tenure: 0yrs
  • Stuart Ellen

    Managing Director of Registration Services

    • Tenure: 0yrs
  • Adam Green (40yo)

    Chief Risk Officer

    • Tenure: 4.8yrs
  • Phil Ainsley

    Managing Director of Employee Services

    • Tenure: 0yrs
  • Lina Brown

    Chief Commercial Officer

    • Tenure: 0.8yrs
  • Thera Roeline Prins (46yo)

    COO & CEO of EQ Invest

    • Tenure: 1.2yrs

Board Members

  • Phil Yea (65yo)

    Independent non-executive Chairman

    • Tenure: 2.2yrs
    • Compensation: UK£200.00k
  • Tim Miller (62yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: UK£115.00k
  • John Stier (53yo)

    CFO & Director

    • Tenure: 4.4yrs
    • Compensation: UK£2.38m
  • Darren Pope (54yo)

    Senior Independent Director

    • Tenure: 1.5yrs
    • Compensation: UK£72.00k
  • Sally-Ann Hibberd (60yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: UK£65.00k
  • Cheryl Millington (53yo)

    Independent Non-Executive Director

    • Tenure: 1yrs
    • Compensation: UK£9.00k
  • Mark David Brooker (48yo)

    Independent Non-Executive Director

    • Tenure: 1yrs
    • Compensation: UK£9.00k
  • Guy Wakeley (48yo)

    Group CEO & Director

    • Tenure: 5.8yrs
    • Compensation: UK£3.53m
  • Alison Burns (56yo)

    Independent Non-Executive Director

    • Tenure: 1.6yrs
    • Compensation: UK£41.00k

Company Information

Equiniti Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Equiniti Group plc
  • Ticker: EQN
  • Exchange: LSE
  • Founded: 2007
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: UK£827.678m
  • Shares outstanding: 362.06m
  • Website: https://www.equiniti.com

Number of Employees


Location

  • Equiniti Group plc
  • Sutherland House
  • Russell Way
  • Crawley
  • West Sussex
  • RH10 1UH
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EQNLSE (London Stock Exchange)YesOrdinary SharesGBGBPOct 2015
EQNLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPOct 2015
2EQDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 2015

Biography

Equiniti Group plc, together with its subsidiaries, provides administration and payment services in the United Kingdom. The company operates in four segments: Investment Solutions, Intelligent Solutions, P ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/12 22:08
End of Day Share Price2019/11/12 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.