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Equals Group Plc

Equals Group moving forward after change from FairFx name with 2019 outlook positive

Snapshot

“With a series of new products set to launch in the second half of the year, which will strengthen our position in the SME money management space, it's a truly exciting time for us and our customers to be moving forward as Equals," said CEO Ian Strafford-Taylor

Cash and cards

Quick facts: Equals Group Plc

Price: £1.08

Market: AIM
Market Cap: £192.16 m
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  • Investments in technology and acquisitions bearing fruit 

  • Strong start to year after 2018 revenues, profits surge

  • Full-year 2019 guidance reiterated 

 

What Equals Group does:

Equal Group PLC (LON:EQLS) - which changed its name from FairFx Group on 27 June 2019 - is a low-cost payment services provider based in the UK. with products including international payments, corporate expenses, current accounts, credit facilities, currency cards and travel cash.

The company has a cloud-based peer-to-peer payments platform that allows personal and business customers to make payments in different currencies and across a range of foreign exchange products through one system.

The platform facilitates payments in a number of countries via mobile apps, the internet, SMS, wire transfer and debit cards.

What it owns:

Since 2017, the group has almost tripled in size in terms of turnover and its operations have broadened into three significant businesses - FairFX, CardOneMoney and City Forex.

On 21 June 2019, the company also revealed that it had received permission from the Financial Conduct Authority (FCA) to provide credit facilities and loan products to its business and retail customers.

The firm said that as it was acting as a broker, the loans would be provided by FCA-authorised third party lenders and there will be no credit risk to the group and the loans would not appear on its balance sheet.

It added that it had a pipeline of further products and services that were set to launch later this year and beyond.

That news came days after FairFx reiterated its full-year guidance following a strong start to 2019.

In an AGM update, the e-banking and payments group's chairman, John Pearson said the company’s year to date in 2019 had been strong in terms of both turnover and improved margins, which he said was a result of the “further rationalisation” of the company’s supply chain.

As a result, the company said it expected its performance for full year 2019 to be “in line with market expectations”.

The group bought digital banking products firm, Q-Money, and its e-money licence in 2017. FairFX called that acquisition “an important milestone” in the evolution of the group, with the licence underpinning its digital banking products as well as its direct membership of Mastercard to issue its own bank cards.

The firm acquired international payments and risk management firm City Forex in 2018. Before it was taken over, City Forex had undertaken travel currency operations for FairFX since 2007.

FairFX said that acquisition brought further scale in international payments and travel currency while allowing it to control the entire supply chain for the travel currency service.

Inflexion points:

  • FairFX had a strong start to 2019 with first quarter group turnover up 33% year-on-year to £620.5mln
  • In 2018, group turnover rocketed up 111% to more than £2.3bn while adjusted pre-tax profit surged 650% to £6.79mln
  • FairFX has been given access to settlement accounts at the Bank of England following an independent assessment. Access to the Real Time Gross Settlement (RTGS) accounts at the central bank will allow the firm to process payments made through its platforms, which numbered over 1mln in 2018, in real-time as well as providing other benefits to customers including instant transfers.
  • In December the company entered into an agreement with New York-based Metropolitan Commercial Bank to provide payments services to its customers in the US. FairFX expects the deal to open up “promising opportunities” in the US market to complement its operations in the UK and drive further growth for the group.

What the CEO says:

Commenting on the name change from FairFx, CEO Ian Strafford-Taylor, said: "The inspiration for the new name comes from a simple piece of insight: that our relentless focus on solving everyday problems by applying our ingenuity equals a better way for our customers to manage their money.”

He added: “With a series of new products set to launch in the second half of the year, which will strengthen our position in the SME money management space, it's a truly exciting time for us and our customers to be moving forward as Equals."

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