03:00 Fri 27 Sep 2019
Equals Group PLC - Replacement: Interim Results
The following amendments have been made to the 'Interim Results for the six months ended
Within the summary financials table within the paragraph entitled 'Financial Review' the Company has corrected the allocation of total depreciation & amortisation costs for FY 2018 and H1 2018. In the segmental analysis note, H1 2018, the total assets and liabilities were corrected. No other figures have been amended and all other details remain unchanged. The full amended text is shown below.
("Equals" or "the Group" or "the Company")
Interim Results for the six months ended
Strong Half Year performance, continuing into second half.
Equals, the e-banking and international payments group, announces its interim results for the six months ended
Financial highlights:
· Group turnover(1) of
· Group revenue of
· Gross profit of
· Adjusted EBITDA(2) of
· Adjusted PBT(3) of
(1) Turnover is measured by gross value of currency transactions sold of
(2) Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation charges, acquisition-related expenses, share-based payments and foreign exchange gains and losses
(3) Adjusted PBT is profit before tax, acquisition-related expenses, amortisation of acquisition intangibles, share-based payments and exchange rate gains or losses
Operational highlights:
· Rebranding of Group from
· Real-time Gross Settlement (RTGS) accounts opened at
· Direct Membership of the
· Corporate expense platform up 41.0% to
· Percentage of H1 Turnover from Corporate Customers rose to 68% from 52% in H1 2018
· Gained FCA Credit Broker Licence, allowing Group to offer loan products to customers via a broker model
· Continued focus on supply chain rationalisation and direct connectivity, driving better unit economics
· 123,392 new customers added to the business, bringing the total number of customers to 1,167,893
Post-Period End:
· Strong start to H2 with turnover up 18%* year on year
· Continued growth in Corporate Expense platform and International Payments
· Global banking partnership with
· Acquisition of international payments business HermexFX
· Completed successful share placing, raising gross proceeds of
· International Payments live in the
· Five-year agreement with Mastercard to grow cards-based businesses on improved economic terms
*for H2 period to 23rd
Commenting on the results and outlook, Chief Executive Officer of Equals,
"The business has delivered an excellent first half performance, continuing into the second half, both operationally and financially. Our strategic focus on rationalising supply chain through direct connectivity to payment schemes and other measures are proving successful, as demonstrated by our improving margins as we pay away less direct costs.
"The increasing diversity of our product range, adding non-FX products to our heritage revenue streams, has helped the Group achieve this against a less than benign macro-economic environment and weaker Sterling.
"With the steps we have achieved already and new revenue streams coming in during the rest of the year, the outlook for the Group's full financial year remains positive.
"Against this background, we remain confident that the full year results will be in line with expectations."
Contact:
|
+44 (0) 20 7778 9308 |
Cenkos Securities plc |
+44 (0) 20 7397 8900 |
Canaccord Genuity
|
+44 (0) 20 7523 8150 |
|
+44 (0) 7747 788 221 +44 (0) 7946 424 651 |
H1 Operational Summary
The excellent growth of the
In
Within the Banking division, the Group gained Real-Time Gross Settlement (RTGS) Accounts at the
Also within Banking, in
In the currency card division, we continued to rationalise the supply chain, resulting in improved financial terms with existing partners combined with moving business to more favourable relationships where possible. In addition, in keeping with our strategy of direct connectivity to payment schemes, the process of issuing our cards directly under licence with Mastercard, rather than using third-parties, was accelerated and will yield significant future benefits. The Group yesterday announced that it had entered into a new five year agreement with Mastercard, whereby they will provide assistance to grow Equals' various card-based businesses through improved economic terms and also assist in the process of Equals becoming an issuer of all its cards.
In
Financial Review
The Group has enjoyed a strong first half of trading with excellent top line growth, translating into increased revenue and EBITDA in line with expectations. Against this background, strong margins have been maintained and rationalisation of the supply chain is delivering results.
Turnover for the first half was up 18.1% year on year to
Group revenue increased by 21.4% to
Gross profit was
The Group's operating expenses increased by 33.0% to
As illustrated in the table below, the Company achieved adjusted EBITDA of
The adjusted PBT in the first half of
Adjusted EBITDA/PBT Calculation |
2019 H1 £ |
2018 H1 £ |
2018 FY £ |
Statutory Net Profit |
1,464,079 |
2,083,559 |
2,617,666 |
Amortisation of acquisition intangibles |
414,956 |
310,100 |
794,959 |
Other amortisation charges |
702,469 |
14,928 |
523,690 |
Depreciation costs |
614,663 |
71,082 |
200,123 |
Right of use asset - Interest charge |
148,247 |
- |
- |
Tax expense / (credit) |
525,838 |
(58,919) |
(538,343) |
EBITDA |
3,870,252 |
2,420,750 |
3,598,095 |
Acquisition-related costs |
22,966 |
227,752 |
297,484 |
Marketing rebrand costs |
725,558 |
- |
590,034 |
Development costs |
- |
- |
1,404,962 |
Restructuring costs |
- |
- |
1,048,119 |
Recruitment costs |
- |
- |
499,617 |
Other |
116,540 |
13,627 |
74,039 |
Adjusted EBITDA |
4,735,316 |
2,662,129 |
7,512,350 |
Depreciation costs |
(614,663) |
(71,082) |
(200,123) |
Other amortisation charges |
(702,469) |
(14,928) |
(523,690) |
Right of use asset interest charge |
(148,247) |
- |
- |
Adjusted PBT |
3,269,938 |
2,576,118 |
6,788,537 |
Tax expense / (credit) |
525,838 |
(58,919) |
(538,343) |
Adjusted PAT |
2,744,100 |
2,635,038 |
7,326,880 |
The tax expense in the period is due to an increase in the deferred tax liability driven by the increase in the intangible assets. The deferred tax expense is purely an accounting entry with no cash impact and the deferred tax liability will unwind in future years as the asset is amortised. The Group reported tax losses brought forward at the end of 2018 of
The Adjusted PAT was only slightly ahead at
The Company's balance sheet remains healthy with net assets of
The adjusted statutory EPS was slightly down at 1.72p (2018: 1.79p) due to the higher depreciation and amortisation and tax charges in 2019 compared to the prior period and the increased average number of shares in issue - 159.6 million (2018: 147.6 million).
Current Trading and Outlook
In the second half of the year, Equals continues to build on the significant growth achieved, with total turnover for the 2 and a half-month period to 23rd
The Group has entered into a global relationship with
Following the attainment of the credit broker licence, an online revolving credit facility is currently in live beta testing. The credit offering is in partnership with iwoca and will allow SME's to apply and receive a decision in minutes and immediately receive funds. Business customers will be able to choose to receive funds directly into their account or onto prepaid card, either virtual or physical, which will be issued by the Group under its Mastercard membership. With the benefit of the Group's membership of Faster Payments, funds could be spent directly and immediately; for instance, in cases where stock needs to be purchased or an urgent invoice be settled.
In early
In the second half of
Accordingly, the
EQUALS group PLC (formerly knowN as fairfx
consolidated statement of COMPREHENSIVE INCOME
|
|
Unaudited |
Unaudited |
Audited |
|
|
6 Months |
6 Months |
Year |
|
|
Ended |
Ended |
Ended |
|
|
|
|
|
|
Notes |
£ |
£ |
£ |
|
|
|
|
|
Gross value of currency transactions sold
|
|
902,837,168 |
805,293,495 |
1,783,710,215 |
Gross value of currency transactions purchased
|
|
(890,779,786) |
(796,327,938) |
(1,763,246,570) |
Revenue on currency transactions |
|
12,057,382 |
8,965,557 |
20,463,645 |
Banking revenue
|
|
2,538,317 |
3,057,739 |
5,628,747 |
Revenue |
4 |
14,595,699 |
12,023,296 |
26,092,392 |
Direct costs |
|
(2,534,403) |
(2,328,410) |
(5,605,961) |
Gross profit |
|
12,061,296 |
9,694,886 |
20,486,431 |
Administrative expenses |
|
(9,900,166) |
(7,442,495) |
(18,109,624) |
Acquisition expenses |
|
(22,966) |
(227,752) |
(297,484) |
Operating profit |
|
2,138,164 |
2,024,639 |
2,079,323 |
Lease finance costs |
|
(148,247) |
- |
- |
Profit before tax |
|
1,989,917 |
2,024,639 |
2,079,323 |
Tax credit / (expense) |
5 |
(525,838) |
58,919 |
538,343 |
Profit and total comprehensive income for the period / year |
|
1,464,079 |
2,083,558 |
2,617,666 |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
Basic |
6 |
0.92p |
1.41p |
1.68p |
Diluted |
6 |
0.89p |
1.38p |
1.64p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All income and expenses arise from continuing operations. There are no differences between the profit for the year and total comprehensive income for the year, hence no Statement of Other Comprehensive Income is presented.
The below notes to the financial statements form an integral part of these financial statements.
*Refer to note 1
The below notes to the financial statements form an integral part of these financial statements.
|
|
|
|
|
*Refer to note 1
The below notes to the financial statements form an integral part of these financial statements.
EQUALS group PLC (formerly knowN as fairfx
consolidated statement of CHANGES IN EQUITY
|
Share Capital |
Share Premium |
Share Based Payment |
Retained Deficit |
Merger Reserve |
Contingent consideration reserve |
Total Equity Attributable to Shareholders |
|
|
|
|
|
|
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
Balance as at |
1,553,682 |
35,858,770 |
1,144,832 |
(12,450,546) |
8,395,521 |
543,172 |
35,045,431 |
Profit for the period |
- |
- |
- |
2,083,559 |
- |
- |
2,083,559 |
Share based payment charge |
- |
- |
24,001 |
- |
- |
- |
24,001 |
Balance as at |
1,553,682 |
35,858,770 |
1,168,832 |
(10,366,986) |
8,395,521 |
543,172 |
37,152,991 |
|
|
|
|
|
|
|
|
Balance as at |
1,553,682 |
35,858,770 |
1,144,832 |
(12,450,546) |
8,395,521 |
543,172 |
35,045,431 |
Profit for the period |
- |
- |
- |
2,617,666 |
- |
- |
2,617,666 |
Share based payment charge |
- |
- |
603,273 |
- |
- |
- |
603,273 |
Balance as at |
1,553,682 |
35,858,770 |
1,748,105 |
(9,832,880) |
8,395,521 |
543,172 |
38,266,370 |
|
|
|
|
|
|
|
|
Profit for the year |
- |
- |
- |
1,464,080 |
- |
- |
1,464,080 |
Shares issued in the period |
89,494 |
2,380,898 |
- |
- |
- |
(336,072) |
2,134,320 |
Share based payment charge |
- |
- |
9,414 |
- |
- |
- |
9,414 |
Balance as at |
1,643,176 |
38,239,668 |
1,757,519 |
(8,368,798) |
8,395,521 |
207,100 |
41,874,186 |
The following describes the nature and purpose of each reserve within owners' equity:
Share capital |
Amount subscribed for shares at nominal value. |
Share premium |
Amount subscribed for shares in excess of nominal value less directly attributable costs. |
Share based payment |
Fair value of share options granted to both directors and employees. |
Retained deficit |
Cumulative profit and losses are attributable to equity shareholders. |
Merger reserve |
Arising on reverse acquisition from Group reorganisation. |
Contingent consideration reserve |
Arising on equity based contingent consideration on acquisition of subsidiaries |
Under the principles of reverse acquisition accounting, the Group is presented as if
The below notes to the financial statements form an integral part of these financial statements.
EQUALS group PLC (formerly knowN as fairfx
CONSOLIDATED STATEMENT OF CASH FLOWS
|
Unaudited |
Unaudited |
Audited as at |
|
6 months ended |
6 months ended |
Year ended |
|
|
(Restated*) |
|
|
|
|
|
|
|
|
|
|
£ |
£ |
£ |
|
|
|
|
Profit for the period / year |
1,464,079 |
2,083,559 |
2,617,666 |
|
|
|
|
Cash flow from operating activities |
|
|
|
|
|
|
|
Adjustments for: |
|
|
|
Depreciation |
614,663 |
71,082 |
200,123 |
Amortisation |
1,117,425 |
325,028 |
1,318,649 |
Interest paid on lease liabilities |
(148,247) |
- |
- |
Share based payment charge |
9,414 |
24,000 |
53,765 |
Increase in deferred tax asset on share-based payment |
- |
- |
549,508 |
Decrease / (increase) in trade and other receivables |
(4,488,038) |
1,146,760 |
(1,551,213) |
Decrease / (increase) in derivative financial assets |
(1,418,803) |
24,253 |
(878,117) |
Decrease / (increase) in deferred tax asset |
215,896 |
- |
(2,383,730) |
Decrease / (increase) in inventories |
1,144 |
(40,016) |
(86,966) |
Increase in trade and other payables |
938,110 |
942,164 |
1,899,118 |
Increase / (decrease) in deferred tax liabilities |
320,430 |
(58,919) |
878,369 |
Increase / (decrease) in derivative financial liabilities |
2,022,079 |
(22,503) |
433,751 |
Net cash generated from operating activities |
648,152 |
4,495,410 |
3,050,923 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Acquisition of property, plant and equipment |
(946,826) |
(203,205) |
(670,827) |
Acquisition of intangibles |
(4,826,565) |
- |
(5,758,957) |
Acquisition of subsidiary, net of cash acquired |
- |
(6,963,834) |
(6,563,834) |
Investment in subsidiary undertaking |
- |
(4,397,423) |
- |
Deferred contingent consideration on acquisition of subsidiary |
(336,072) |
- |
- |
Net cash used in investing activities |
(6,109,463) |
(11,564,462) |
(12,993,618) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from issuance of ordinary shares |
2,470,392 |
- |
- |
Principal elements of lease payments |
(20,578) |
- |
- |
Net cash from financing activities |
2,449,814 |
- |
- |
|
|
|
|
Net increase / (decrease) in cash and cash equivalents |
(3,011,497) |
(7,069,052) |
(9,942,695) |
Cash and cash equivalents at the beginning of the period / year |
7,860,368 |
17,803,063 |
17,803,063 |
Cash and cash equivalents at the end of the period / year |
4,848,871 |
10,734,011 |
7,860,368 |
*Refer to note 1
The below notes to the financial statements form an integral part of these financial statements.
EQUALS group PLC (formerly knowN as fairfx
Notes to the unaudited Consolidated Interim FINANCIAL STATEMENTS for the six months ending 30 June 2019
1. Basis of preparation and accounting policies
The consolidated interim financial statements have been prepared in accordance with the AIM rules and the basis of accounting policies set out in the accounts of the Group for the year ended 31 December 2018, except in relation to IFRS 16 Leases. The consolidated interim financial statements have been prepared using recognition and measurement principles of IFRS as adopted for use in the
The interim financial statements are unaudited and were approved by the Board of Directors for issue on 26 September 2018. 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 2018 Annual Report. The results for the year ended 31 December 2018 are in abbreviated form and have been extracted from the published financial statements of the Group. There were audited and reported upon without qualification by
The Group has not applied IAS 34 "Interim Financial Reporting" (which is not mandatory for
The Company is a limited liability company incorporated and domiciled in
Changes in significant accounting policies
IFRS 16 Leases: IFRS 16 has replaced the existing IFRS guidance on leases. IFRS 16 has removed the distinction for lessees between an operating lease and a finance lease, and considers all leases to be treated in the same way. The lease liability for all leases is required to be recognised, with a right-of-use asset being recognised. A right-of-use asset represents the right to use the underlying asset for the period of the lease. The right-of-use asset is a non-current asset, and can be either an item of property, plant and equipment, investment property or an intangible asset.
Initial adoption: The Group has initially applied IFRS 16 at
Prior year adjustment
Customer cash is held in the Group's bank accounts and principally represents funds held in CardOne payment accounts or funds credited for the purposes of International Payments. The Group has considered the accounting for cash held on behalf of customers. In previous periods, cash held on behalf of customers has been recognised on balance sheet, with an equal liability to the customer.
During the year ended
6 months to |
As Stated |
|
Effect of restatement |
|
Restated |
Group |
£ |
|
£ |
|
£ |
Statement of financial position |
|
|
|
|
|
Cash and cash equivalents |
57,809,546 |
|
(47,075,535) |
|
10,734,011 |
Trade and other payables |
(50,664,514) |
|
47,075,535 |
|
(3,588,979) |
Statement of cash flows |
|
|
|
|
|
(Decrease) / increase in trade and other payables |
13,870,033 |
|
(12,927,869) |
|
942,164 |
Net cash (outflow) / inflow from operating activities |
17,423,279 |
|
(12,927,869) |
|
4,495,410 |
Net increase / (decrease) in cash and cash equivalents |
5,858,817 |
|
(12,927,869) |
|
(7,069,052) |
Cash and cash equivalents at the beginning of the period |
51,950,729 |
|
(34,147,666) |
|
17,803,063 |
Cash and cash equivalents at end of the period |
57,809,546 |
|
(47,075,535) |
|
10,734,011 |
2. Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings. The company did not undertake any transactions prior to
On
By applying the principles of reverse acquisition accounting, the Group is presented as if
3. Going concern basis
The financial statements have been prepared on a going concern basis. In determining the appropriate basis of preparation of the interim statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future. The Directors are of the opinion that the Group and Company have adequate resources to continue in operational existence for the foreseeable future and feel it is appropriate to adopt the going concern basis in the preparation of the interim statements.
4. Segmental analysis
Segment results are reported to the Board of Directors (being the chief operating decision maker) to assess both performance and support strategic decisions. The Board review financial information on revenue for the following segments: Currency Cards, International Payments, Travel Cash, Banking and Central (which includes overheads and corporate costs). Revenue is wholly derived from
IFRS 15 requires the presentation of disaggregated revenue from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affects by economic factors. The Group has assessed that the disaggregation of revenue by operating segments is appropriate in meeting this disclosure requirement as this is the information regularly reviewed by the Board, to evaluate the financial performance of the Group.
Jun-19 |
Currency Cards |
International Payments |
Travel Cash |
Banking |
Central |
Total |
|
|
|
|
|
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
Segment revenue |
6,087,609 |
4,822,079 |
1,147,693 |
2,538,317 |
- |
14,595,698 |
Direct costs |
- |
- |
- |
(595,151) |
(1,939,252) |
(2,534,403) |
Administrative expenses |
- |
- |
- |
(1,330,679) |
(8,717,733) |
(10,048,412) |
Acquisition costs |
- |
- |
- |
- |
(22,966) |
(22,966) |
Profit /(loss) before tax and from operations |
6,087,609 |
4,822,079 |
1,147,693 |
612,487 |
(10,679,951) |
1,989,918 |
|
|
|
|
|
|
|
Total assets |
|
|
|
- |
61,195,696 |
61,195,696 |
Total liabilities |
|
|
|
- |
(19,321,510) |
(19,321,510) |
Total net assets |
- |
- |
- |
- |
41,874,186 |
41,874,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec-18 |
Currency Cards |
International Payments |
Travel Cash |
Banking |
Central |
Total |
|
|
|
|
|
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
Segment revenue |
9,996,890 |
8,389,851 |
2,076,904 |
5,628,747 |
- |
26,092,392 |
Direct costs |
- |
- |
- |
(1,257,901) |
(4,348,060) |
(5,605,961) |
Administrative expenses |
- |
- |
- |
(3,132,003) |
(14,977,621) |
(18,109,624) |
Acquisition costs |
- |
- |
- |
- |
(297,484) |
(297,484) |
Profit /(loss) before tax and from operations |
9,996,890 |
8,389,851 |
2,076,904 |
1,238,843 |
(19,623,165) |
2,079,323 |
|
|
|
|
|
|
|
Total assets |
- |
- |
- |
- |
47,425,064 |
47,425,064 |
Total liabilities |
- |
- |
- |
- |
(9,158,694) |
(9,158,694) |
Total net assets |
- |
- |
- |
- |
38,266,370 |
38,266,370 |
|
|
|
|
|
|
|
Jun-18 |
Currency Cards |
International Payments |
Travel Cash |
Banking |
Central |
Total |
|
|
|
|
|
|
|
|
£ |
£ |
£ |
£ |
£ |
£ |
Segment revenue |
4,087,205 |
3,745,975 |
932,558 |
3,057,739 |
- |
12,023,297 |
Direct costs |
- |
- |
- |
(598,700) |
(1,729,710) |
(2,328,410) |
Administrative expenses |
- |
- |
- |
(1,627,895) |
(5,814,600) |
(7,442,495) |
Acquisition costs |
- |
- |
- |
- |
(227,752) |
(227,752) |
Profit /(loss) before tax and from operations |
4,087,205 |
3,945,975 |
932,558 |
831,144 |
(7,772,061) |
2,024,640 |
|
|
|
|
|
|
|
Total assets |
|
|
|
- |
41,243,716 |
41,243,716 |
Total liabilities |
|
|
|
- |
(4,090,725) |
(4,090,725) |
Total net assets |
- |
- |
- |
- |
37,152,991 |
37,152,991 |
5. Taxation
Group |
|
Unaudited 6 months ended |
|
Unaudited 6 months ended |
|
Audited as at Year ended |
|
|
30-Jun-19 |
|
30-Jun-18 |
|
31-Dec-18 |
|
|
£ |
|
£ |
|
£ |
Changes in tax estimates related to prior years |
|
(10,488) |
|
- |
|
32,544 |
Changes in tax estimates in pre-acquisition accounts of businesses acquired during the year |
|
- |
|
- |
|
384,966 |
Current tax expense / (credit) |
|
(10,488) |
|
- |
|
417,510 |
|
|
|
|
|
|
|
Origination and reversal of temporary differences |
|
536,326 |
|
(58,919) |
|
(1,063,420) |
Recognition of previously unrecognised deductible temporary differences |
|
- |
|
- |
|
107,567 |
Deferred tax expense / (credit) |
|
536,326 |
|
(58,919) |
|
(955,853) |
|
|
|
|
|
|
|
Total tax expense / (credit) |
|
525,838 |
|
(58,919) |
|
(538,343) |
The Group estimates that no tax is payable for the 6 months ended 30 June 2019.
The Group recognised a current tax credit of £10,488 in relation to the release of a historical tax liability reported in a subsidiary acquired in 2018, which has since been proven not to be due.
Based on valuation of acquisition of intangibles an enacted UK corporation tax rates the Group has acquired deferred tax liabilities of £760,923 as at 30 June 2019, in relation to its acquisition of Q Money Limited, Spectrum Financial Group Limited and City Forex Limited. The deferred tax will be released to the income statement as the underlying intangible assets are amortised or otherwise recognised in the profit and loss. The deferred tax liability released to the income statement for the period was £78,842. Future changes in the standard rate of corporation tax have been reflected in the carrying value of the deferred tax liability.
In the 6 months to 30 June 2019, the Group recognised a £399,272 deferred tax liability in relation to internally generated intangibles assets, which are subject to claims made under the Small or Medium-sized Enterprise (SME) R&D tax relief scheme. In addition, the Group recognised a £215,896 deferred tax expense in relation to deferred research and development tax credits recognised during the period.
The Group has estimated tax losses of £9,268,652 available for carry-forward against future trading profits. Deferred tax assets are recognised for tax losses carried forward to the extent that the realisation of the related tax benefit through future taxable profits is considered more likely than not. The decision to recognise any asset is taken at such point recovery is reasonably certain, which the Group considered on a three-year forecast horizon. During the year ended 31 December 2018, the Group recognised a deferred tax asset of £1,607,394 in relation to carry forward losses expected to be used by 2021. The Group has an unrecognised deferred tax asset of Nil (2017: £1,761,611) in respect of the tax losses that can be carried forward against future taxable income for the period between one year and an indefinite period of time.
During the year ended 31 December 2015, the Government announced provisions further reducing the rate of corporation tax to 19.0% with effect from 1 April 2017 and to 18.0% from 1 April 2020, which were substantially enacted during the year. The tax rate applying from 1 April 2020 was further reduced to 17% during a later year. Therefore, the standard rate of corporation tax applicable to the Group for the year ended 31 December 2018 was 19.0%. The rate in the year ending 31 December 2019 is expected to be 19.0%, the rate in the year ending 31 December 2020 is expected to be 17.5% and the rate in subsequent years is expected to be 17.0%.
6. Profit / Loss per share
The profit or loss per share is based on the profit or loss attributable to ordinary shareholders of the parent company and the weighted average number of ordinary shares outstanding.
|
Unaudited 6 months ended 30 June 2019 £ |
Unaudited 6 months ended 30 June 2018 £ |
Audited Year ended 31 December 2018 £ |
Profit after tax attributable to ordinary shareholders |
1,464,079 |
2,083,559 |
2,617,666 |
Basic shares: |
|
|
|
Weighted average number of ordinary shares for the purpose of basic earnings per share |
159,635,522 |
147,603,753 |
155,368,259 |
Diluted shares: |
|
|
|
Weighted average number of ordinary shares for the purpose of diluted earnings per share |
164,048,337 |
150,445,309 |
159,916,115 |
The calculation of diluted earnings per share has been based on the profit / loss attributable to ordinary shareholders and a weighted average number of shares outstanding, after adjustments for the effects of all dilutive potential ordinary shares.
7. Dividends
The Board does not recommend the payment of a dividend, since our capital allocation strategy at this stage is focused entirely on investing in the business to achieve our growth and efficiency objectives. However, the Board will continue to keep this under review.
8. Share capital and merger reserve
|
As at 30 June 2019 |
As at 30 June 2018 |
As at 31 December 2018 |
||||
|
Number |
£ |
Number |
£ |
Number |
£ |
|
Authorised, issued and fully paid |
|
|
|
|
|
|
|
Ordinary shares of 1p each |
164,317,683
|
1,643,176 |
155,368,259
|
1,553,682 |
155,368,259
|
1,553,682 |
|
Under the principles of reverse acquisition accounting, the Group is presented as if Equals Group PLC had always owned the FairFX (UK) Limited Group. The comparative and current period consolidated reserves of the Group are adjusted to reflect the statutory share capital and merger reserve of Equals Group PLC as if it had always existed.
In accordance with IAS 32 Financial Instruments: Presentation, costs incurred which are directly applicable to the raising of finance, are offset against the share premium created upon the share issue. The holders of the ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
9. Events after the reporting date
On the 9 August 2019, a subsidiary within the Group, FairFX Plc, acquired the International Payments business of Hermex International Limited ("HermexFX"), part of the FXPro Group, for a total consideration of £2 million, payable in cash.
On 16 August 2019, the Group issued 12,727,000 ordinary shares as part of a placing with new and existing institutional investors. On 5 September 2019, the Group issued 246,176 of ordinary shares via an open offer with existing qualifying shareholders.
10. Interim announcement
The interim report was approved by the Board of Director for issue on 26 September 2019. A copy will be posted on the Investor section of the Company's website at www.Equalsplc.com.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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