Newly-rebranded Equals Group pleased with first half performance

Electronic banking and payments provider Equals Group - formerly known as FairFX - updated the market on its trading on Wednesday, reporting that it had seen further strong growth in its first half.

The AIM-traded firm said its ongoing investment in technology had led to improvements in customer experience, as well as the development of new products in the six-month period ended 30 June, which the board said would underpin the company’s expansion in the second half and beyond.

It also successfully completed its rebranding, which the directors added was reflective of the diversification of the business over the last two years.

Turnover for the first half was ahead 17.5% year-on-year at £1.3bn, in line with management expectations.

Overall revenue margins were said to be “slightly” improved as the positive effects of supply change rationalisation outweighed the impact of growth being the strongest in lower margin products.

Growth in the usage of Equals’ corporate expenses product accelerated, with a 34.7% increase to £102m, which the firm said was driven by the roll-out of its improved customer experience and new functionality.

International payments turnover increased 14.4% year-on-year to £636.3m, as a result of continued success in the group’s cross-selling strategy.

Travel money turnover, which consists of retail cards and travel cash, was down 8.9% for the period at £158m, which the board put down to the group deciding to cancel some low-margin travel cash affiliate partnerships.

As such, the impact on revenue was expected to be minimal.

Banking turnover rose 36.7% to £358.6m, driven by “significant” growth in business banking as the customer experience of the platform improved.

That turnover growth was expected to continue, the board said, as the investment in the banking platform yielded further benefits through improved payment functionality, including direct Faster Payments access, an enhanced customer experience, and new products including lending via Equals’ credit broker licence.

In addition, the group said it had now entered into a contract with Metropolitan Commercial Bank, giving it access to the United States market.

Utilising MCB's US regulatory status means Equals now had US domestic clearance accounts and can service both retail and corporate clients for international payments.

Additionally, now the regulatory process was complete, the board said work could now begin to launch its ‘Equals Spend’ corporate platform in the US later in 2019.

The focus for the second half of 2019 would be to continue the group's strategy of building scale and extracting efficiencies in its supply chain, combined with rolling out a series of exciting new products under the new Equals brand, the board explained.

It said the strong first half, combined with the new product pipeline and successful introduction of the Equals brand, gave it confidence that the company would achieve its full-year market expectations.

“The performance of Equals during the first half of 2019 clearly demonstrates the success of the group's strategy and its diversified and evolving business model,” said chief executive officer Ian Strafford-Taylor.

“The wider regulatory permissions we now have both in the UK and the US combined with the depth of our connectivity to the payment networks will enable us to continue our growth in 2019 and beyond.”