Shares of Equiniti Group PLC (LON: EQN) today plunged 7.14% after releasing a trading update for the 4-month period starting July 1 to November 5, 2020. The financial services outsourcing company noted that the current market environment remains challenging, which is unlikely to change for the rest of the year.
Equiniti noted that it managed to hold on to its long-term non-discretionary contracts, which contributed approximately 75% of its total revenues for most of the year. However, around half of its discretionary revenues remained impacted.
The company implemented swift cost-cutting measures such as suspending salary reviews and cutting third-party spending to account for the drop in revenues.
Equiniti lowered its full-year revenue guidance to £480m to £490m as compared to last year’s £555.7m, while its underlying EBITDA was reduced to between £93m and £97m, versus last year’s £136m.
The firm recorded a 48% increase in new orders during the 4 months but warned that they would not translate into any meaningful revenues this year as some of them are multi-year contracts.
Guy Wakeley, Equiniti’s CEO, observed: “Current trading continues to be difficult, although we are seeing the usual acceleration into Q4. We continue to make strategic progress as evidenced by our strong order intake and resilient financial position, but pending any recovery in our markets we continue to tightly manage costs and cash flow through this now extended period of disruption.”
Equiniti share price
Equiniti shares today plunged 7.14% lower to trade at 96.2p having fallen from Thursday’s closing price of 103.6p.