Equiniti Group trading in line as Wells Fargo acquisition progresses

The FTSE 250 company said in its trading update for the period from 1 July to date that it continued to retain or extend all mandates, including those with AstraZeneca, Land Securities Group, Lloyds Banking Group, Smiths Group and Virgin Money Holdings.

It said that, coupled with corporate action activity and software sales, 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,” the board said in its statement.

“We are delighted to welcome Jardine Lloyd Thompson Group and Rentokil Initial as clients of the group.”

Equiniti also successfully migrated J Sainsbury as a new registration and share plan client during the period.

Additionally, the board said it grew its 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.”

On its proposed £176m acquisition of Wells Fargo Shareowner Services, first announced on 12 July, Equiniti said it was approved at a general meeting held on 28 September with 99.99% of shareholders voting in favour of the acquisition, and a 97.43% uptake of the associated rights issue.

The board said the acquisition was proceeding as planned, with completion expected in the first quarter of 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,” the board explained.

“Our plans for the business have been received with enthusiasm and support from existing major clients and transferring staff.”

The group said its guidance on one-off transaction costs remained unchanged at £17m, which related to advisory, debt and equity issuance costs.

It also reaffirmed previous guidance on transaction-related exceptional costs of £20m by full-year 2019, with 60% of that to be incurred during 2018 and transaction-related capital expenditure costs of £22m by full-year 2019, with 80% to be incurred during 2018.

“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,” the board added.

“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.”

Looking ahead, Equiniti said its objective remained 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,” the board said.

“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.”