Some Equiniti divisions continue to be impacted by lockdown restrictions
Equiniti Group PLC (LON:EQN), an international technology-led services and payments specialist, has issued a trading update covering progress to date in 2021.
The Q1 2021 trends outlined in the Group’s 2020 full year results announcement on 1 April 2021 have continued in Q2 with some divisions gaining positive momentum whilst others continue to be impacted by lockdown restrictions.
Equiniti remains focused on delivering a market-leading service to clients as evidenced by strong ongoing client retention and a number of important new business wins in the period.
The company said it is experiencing signs of improvement in activity levels in EQ Boardroom and EQ US based on increasing volumes of IPO and corporate actions, a return to dividend payments and higher share dealing volumes. The Group is on track to win a record number of new clients arising from IPOs in 2021.
In EQ Digital, however, the external environment remains very challenging as many client offices remain closed, impacting project work and clients waiting for economic conditions to improve and a return to offices before making commitments to projects.
In EQ Paymaster, there continues to be delays to some project work, particularly in Government activities.
The Group reiterates that total interest-related income earned across the Group is expected to reduce by £14 million in 2021 and £5 million in 2022.
The outlook remains dependent on the pace and shape of the economic recovery and the timing of the return of market-paid activities as set out in the Group’s 2020 full year results. As a result of these continuing uncertainties, the Group remains unable to provide formal guidance regarding the expected financial outturn for the current year.
Let’s recall that, on April 19, 2021, Equiniti said that it had received a non-binding proposal from Siris to acquire the entire issued and to be issued share capital of EQ for 170 pence per share in cash. On April 28, 2021, EQ announced that it had received a revised non-binding proposal of 180 pence per share in cash from Siris and that the EQ Board would be minded to recommend a firm offer by Siris to EQ shareholders on the financial terms of the Revised Proposal.
The Revised Proposal is subject to a number of pre-conditions including completion of confirmatory due diligence.
In accordance with Rule 2.6(a) of the Code, Siris was required, by not later than 5.00 pm on 17 May 2021, to either announce a firm intention to make an offer for EQ in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for EQ, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.
As due diligence continues to progress, in accordance with Rule 2.6(c) of the Code, the EQ Board has requested, and the Takeover Panel has consented to, an extension to this deadline until 5.00 p.m. (London time) on 28 May 2021.