Equity prospects

Equiniti

James Godrich, Research Assistant

Price£1.86

52 week high-low£1.94 - £1.27

Net yield0.4%

Hist / pros perN/A - 12.7

Equity market cap£577m

Equiniti Group plc is principally a provider of share registration, pension payment and administration services to a range of organisations. It also benefits from various cross-selling opportunities in its offering, which includes employee and investment services as well as specialist business and technology solutions.

After its October 2015 IPO the Company had a difficult initial trading period. Since then though they have produced a very strong set of year end results which included (a) a 26% increase in revenues, 7% of which came from organic growth and (b) a material reduction in net debt – one of the major concerns for the market since IPO.

Equiniti have a remarkable level of stickiness in their contracts with a 100% retention rate of FTSE350 registry contracts for each of the past four years and an average contract length of 27 years, some of which date back to the 1800s. They currently boast around a 50% FTSE registry base market share and are winning more than 50% of IPO mandates.

Greater broker coverage, continued reduction in levels of gearing and consistent in line results are all hurdles that the Company must clear in order to build long term value for shareholders.

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