International payments provider Equals Group (LON: EQLS) says full year results will be better than expected. Canaccord Genuity has increased its 2022 pre-tax profit forecast from £10.3m to £10.8m.
Revenues were £63.5m at the end of November 2022 and this is not far short of previous estimates for the full year. The fastest growth is coming from services to larger corporate clients.
There should be no debt by the end of 2022. Cash in the bank is likely to be £17.9m at the end of 2022. Net current assets are forecast to be £12.1m. Investment in technology is continuing and there are earn-out payments that will become due over the next couple of years.
Roqqett
Last week, AIM-quoted Equals acquired open banking platform Roqqett for up to £2.25m, subject to regulatory approval by the FCA, with £1m upfront and the rest depending on R&D tax credit receipts and development milestones.
Roqqett has FCA authorisation to take payments and access data. This means clients can make and receive payments through mobile banking apps without the need for card details.
This deal expands the activities of Equals and the Roqqett service can be integrated into the FairFX online checkout and enhance the Equals Money service. There will also be additional data to monitor transactions. Roqqett is loss making, but it is expected to be earnings enhancing in the medium-term.
Pre-tax profit could improve to £15m in 2023. At 92p, the shares are trading on 13 times prospective 2023 earnings.