29 July 2016 EQUINITI GROUP PLC RESULTS FOR THE 6 …/media/Files/E/... · Equiniti Group plc - Results for the six months ended 30 June 2016 Page 2 of 25 Analyst and Investor presentation

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29 July 2016

EQUINITI GROUP PLC RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2016 Equiniti Group plc (“Equiniti” or “the Group”), the specialist technology outsourcer providing non-discretionary payment and administration services, today publishes its interim results for the six months to 30 June 2016.

INTERIM RESULTS: STRONG RESULTS WITH FULL YEAR GUIDANCE MAINTAINED

Financial Highlights H1 2016 H1 2015 Change %

Revenue (£m) 191.9 181.2 5.9

EBITDA prior to exceptional items (£m) 41.2 38.5 7.0

EBITDA margin prior to exceptional items (%) 21.5 21.2 0.3pt

Free cash flow to equity holders1 (£m) 18.5 7.9 134.2

Cash flow conversion (%) 93 103 (10pt)

EBIT (£m) 15.3 12.3 24.4

Earnings per share2 (pence) 2.0 (562.0)

Dividend per share (pence) 1.64 -

Net debt (£m) 261.7 471.3 (44.5)

Leverage (x) 2.9 5.5

Revenue growth of 5.9%; underpinned by 4.3% organic3 revenue growth

12% revenue growth from cross-selling and up-selling to top 32 key accounts

Acquisitions of KYCnet and RiskFactor made in Q1 2016 fully integrated and together with the acquisition of Toplevel Computing announced today, will fuel organic growth going forward

EBITDA growth of 7% prior to exceptional items with margin strengthening to 21.5%; strong EBIT growth of 24.4% to £15.3m

Cash flow conversion of 93%; growth of 134% to £18.5m in free cash flow to equity holders

Leverage of 2.9x reduced from proforma4 3.0x net debt/EBITDA at 31 December 2015

Interim dividend of 1.64 pence per share, in line with progressive dividend policy driven by strong eps growth

Commenting on the Group’s results, Guy Wakeley, Chief Executive, said: “Equiniti remains focused on its core strategy which has delivered a strong set of results in an uncertain market environment. The breadth and resilience of our propositions, along with our strong customer relationships, has enabled us to deliver strong top line and profit progression whilst reducing leverage. “Equiniti continues to win business from new and existing clients, positioning the Group well to deliver on its organic growth guidance for the full year. At the same time, the Group is developing new technologies and our recent acquisitions are building out our smart technology solutions. Demand for our technology and compliance-led services has accelerated in the period, which along with our focus on performance improvement, gives the Board confidence on delivering in line with our full year guidance.” 1 Free cash flow to equity holders represents cash flow prior to any acquisitions, refinancing or share capital cash flows. 2 H1 2015 earnings per share loss of 562.0p is driven by the Group having a different capital structure in place in 2015 which changed when the Group listed on the London Stock Exchange in October 2015.

3 Reported revenue growth adjusted for acquisitions, with benefit of 2016 acquisitions reflected in 2015. 4 Proforma leverage is calculated as net debt/EBITDA on a rolling 12 month basis, adjusted for IPO costs paid in H1 2016.


Analyst and Investor presentation

Equiniti’s management will host an analyst and investor presentation at 8:00am UK time today. There will be a conference call and live webcast of the event. This will be broadcast live on Equiniti’s website, www.equiniti.com and an archive version of the presentation will be available on the website later that day. Conference call details: Please dial into the call in time to allow for registration. Participant dial-in: +44 (0) 20 3003 2666. Password: Equiniti For further information please contact: Analyst/Investor enquiries: Equiniti Group plc Guy Wakeley, Chief Executive Officer +44 (0) 207 469 1811

John Stier, Chief Financial Officer Frances Gibbons, Head of Investor Relations

Media enquiries: Temple Bar Advisory Alex Child-Villiers + 44 (0) 7795 425580

Will Barker + 44 (0) 7827 960151

Forward-looking statements This announcement contains forward-looking statements regarding Equiniti. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties, including market conditions and other factors outside of Equiniti’s control. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. Equiniti undertakes no obligation to publicly update any forward-looking statement contained in this release, whether as a result of new information, future developments or otherwise, except as may be required by law.

http://www.equiniti.com/


GROUP RESULTS

Reported

H1 2016

Reported*

H1 2015

Reported

Change %

Organic

Change %

Revenue (£m) Investment Solutions 62.1 56.2 10.5 8.0

Intelligent Solutions 58.4 49.5 18.0 15.0

Pension Solutions 65.6 72.0 (8.9) (8.9)

Interest Income 5.8 3.5 65.7

Equiniti Group 191.9 181.2 5.9 4.3

EBITDA prior to exceptional items (£m)

Investment Solutions 18.1 15.6 16.0

Intelligent Solutions 12.8 10.3 24.3

Pension Solutions 11.0 14.0 (21.4)

Interest Income 5.8 3.5 65.7

Central Costs (6.5) (4.9) 32.7

Equiniti Group 41.2 38.5 7.0

EBITDA margin prior to exceptional items (%) Investment Solutions 29.1 27.8 1.3 Intelligent Solutions 21.9 20.8 1.1 Pension Solutions 16.8 19.4 (2.6)

Equiniti Group 21.5 21.2 0.3

*Company Secretariat business transferred from Investment Solutions to Intelligent Solutions (£1.6m revenue and £0.1m EBITDA)

OVERVIEW Equiniti continued to make good progress on its strategic objectives during the period demonstrating the resilience of the business in an uncertain market environment. The Group provides non-discretionary services to a broadly spread client base which includes 70% of the FTSE 100 and large public sector organisations. A clear focus on the UK and on complex and regulated markets ensures some insulation from current market uncertainty. The Group delivered organic growth in line with expectations, continued to cross-sell to its strategic clients and increased its offshoring capability with c550 people in its Chennai centre supporting IT, BPO, Sales & Marketing, Finance, HR and Payroll functions. Organic growth, margin progression and cash conversion continue in line with expectations. Reported revenue increased by 5.9% to £191.9m (H1 2015: £181.2m) during the year, whilst proforma revenue adjusted for acquisitions grew organically by 4.3%. The acquisitions of KYCnet and RiskFactor made in March 2016 have been fully integrated and are delivering in line with expectations. Investment Solutions delivered strong growth benefitting from the acquisition of TransGlobal Payment Solutions (“TransGlobal”) in September 2015, along with organic growth through corporate actions and project work with existing clients. Intelligent Solutions also delivered strong growth, benefitting from the acquisitions of KYCnet and RiskFactor in March 2016, along with strong organic growth driven by an increase in remediation services and software sales in both complaints management and credit solutions. Pension Solutions revenue declined as anticipated, as a result of the conclusion of the MyCSP roll-out in the fourth quarter of 2015. Revenue from interest was 65.7% higher than the prior period due to higher average client cash balances of £1.7bn (H1 2015: £1.2bn) plus the benefit that the Group has secured through entering into three year interest rate swaps at a blended rate of 1.03% relating to £650m of cash balances which expire in July and August 2018.

EBITDA prior to exceptional items increased by 7.0% to £41.2m (H1 2015: £38.5m) reflecting the impact of acquisitions made in the current and prior period and the profit element of the organic growth at an improved margin. Central costs in the period were higher reflecting our status as a plc, investment in growth, particularly our sales function, and continued strengthening of our compliance and risk functions. Operating free cash flow prior to exceptional items was £38.2m (H1 2015: £39.6m), resulting in a cash flow conversion of 93% (H1 2015: 103%) before capital expenditure. Capital expenditure in the period was £10.5m (H1 2015: £8.3m), representing 5.5% of revenue (H1 2015: 4.6%). Net debt of £261.7m (30 June 2015: £471.3m) represents a ratio of 2.9x net debt/EBITDA (30 June 2015: 5.5x).


The Board has declared an interim dividend of 1.64 pence per share. The interim dividend is to be paid on 26 October 2016 to shareholders on the register of members at close of business on 26 August 2016. Any shareholder wishing to participate in the Equiniti Dividend Reinvestment Plan (“DRIP”) needs to have submitted their election to do so by 5 October 2016. We maintain our progressive dividend policy which will see us distribute around 30% of our normalised profit attributable to ordinary shareholders each year. Board changes As announced on 1 July 2016, the following Board and Board Committee changes are effective from 1 August 2016. Sir Rod Aldridge will be stepping down from the Board as an independent Non-executive Director having served the Board for nine years. Sally-Ann Hibberd will join the Board as an independent Non-executive Director and will become a member of the Audit, Nominations and Remuneration Committees, and will also assume the Chair of the Group’s Risk Committee. OPERATIONAL REVIEW We serve our clients through three divisions: Investment Solutions, Intelligent Solutions and Pension Solutions. The integrated nature of our client base and strong client relationships results in shared clients across the Group. This enables us to continually enhance our performance through cross-selling and up-selling to existing clients. Our entry point is often providing share registration services, with clients taking further services from us over time. In addition to our three divisions, we earn interest income on balances we administer on our clients’ behalf. Investment Solutions Investment Solutions encompasses our Registration Services, Investment Services and Employee Services businesses and offers a broad range of business to business and retail services including share registration for around half the FTSE 100, investor analytics, SAYE scheme administration and share incentive plan administration for 1.1 million employees. The division also offers bereavement services and is powered by technologies for retail investment and payments. Investment Services also provides share dealing, wealth management and international payments to corporate clients, their employees and direct to around 350,000 retail customers. H1 2016 H1 2015 Change %

Revenue (£m) 62.1 56.2 10.5 EBITDA prior to exceptional items (£m) 18.1 15.6 16.0 EBITDA margin prior to exceptional items (%) 29.1 27.8 1.3

Revenue in Investment Solutions increased by 10.5% to £62.1m (H1 2015: £56.2m), benefitting from 8.0% organic revenue growth, along with the acquisition of TransGlobal, completed on 3 September 2015. EBITDA prior to exceptional items grew by 16.0% driven by strong organic growth. Strong margin progression was as a result of project work and continued focus on offshoring and automation. Registration Services won a number of mandates from newly listed companies including Metro Bank, Joules, Time Out, Draper Esprit and Ascential. The division was also appointed share registrar to FTSE 250 Domino’s Pizza Group plc displacing an existing service provider. In Investment Services, there was strong growth in the International Payments business including landmark transactions such as supporting Visa Europe on its €18b acquisition by Visa Inc. offset by slowing trading volumes as we progressed through the period. Employee Services continued to benefit from the strong growth in SAYE and SIP schemes, as well as a number of one-off projects in corporate actions and flexible benefits.


Intelligent Solutions Intelligent Solutions provides technology and specialist outsourcing solutions targeting complex or regulated activities. Capability is focussed in three key areas: Enterprise workflow solutions designed to automate and optimise business processes such as case, complaints, document and people management; Credit Services which includes credit origination and loan administration managing a combined loan book in excess of £10 billion as well as a product set for data analytics; and Specialist Resource providing rectification and remediation and company secretarial support. H1 2016 H1 2015 Change %

Revenue (£m) 58.4 49.5 18.0 EBITDA prior to exceptional items (£m) 12.8 10.3 24.3 EBITDA margin prior to exceptional items (%) 21.9 20.8 1.1

Revenue in Intelligent Solutions increased by 18.0% to £58.4m (H1 2015: £49.5m). This was the result of organic growth of 15%, driven by strong demand for technology solutions in complaints management and specialist resources returning to growth. The acquisitions of KYCnet and RiskFactor in March 2016, contributed to reported growth. EBITDA prior to exceptional items increased by 24.3% to £12.8m as a result of strong revenue growth and an increasing proportion of the business being driven by technology sales. Intelligent Solutions won a broad range of work during the period, including asset reunification projects on behalf of RDS and Santander; a 5-year contract with TSB for the provision of a complaints platform; and a 5-year proof of life contract with the Italian social security and welfare Institute (INPS), in partnership with Citi. We are seeing increased opportunities in the utilities market for complaints management with a new contract and extension with two major utilities providers secured in the period.

Pension Solutions Pension Solutions offers administration and payment services, software and data analytics and rectification solutions to major public and private sector pension schemes and to life insurance providers. The division supports some of the largest pension schemes in the UK including the National Health Service with more than 2.6 million members, and the Armed Forces Veterans which we have continuously served since 1836. H1 2016 H1 2015 Change %

Revenue (£m) 65.6 72.0 (8.9) EBITDA prior to exceptional items (£m) 11.0 14.0 (21.4) EBITDA margin prior to exceptional items (%) 16.8 19.4 (2.6)

Revenue in Pension Solutions decreased by 8.9% to £65.6m (H1 2015: £72.0m) with a decrease in EBITDA prior to exceptional items of 21.4% to £11.0m. This was due to the expected decline in project work in MyCSP with its software roll-out to the Civil Service concluding in Q4 2015. The division continues to win new clients, including a first generation life and pensions outsourcing contract with Retirement Advantage, valued at approximately £40m over 10 years.


OUTLOOK

Equiniti continues to win business from new and existing clients, positioning the Group well to deliver on its organic growth guidance for the full year. At the same time, the Group is developing new technologies and our recent acquisitions are building out our smart technology solutions. Demand for our technology and compliance-led services has accelerated in the period, which along with our focus on performance improvement, gives the Board confidence on delivering in line with our full year guidance. FINANCIAL REVIEW Group Income Statement Proforma results adjusted to normalise finance costs to reflect our ongoing funding structure, are detailed in the table below.

£m

H1 2016 Statutory

H1 2015 Statutory

H1 2015 Adjustment

H1 2015 Proforma

Revenue 191.9 181.2 - 181.2

EBITDA prior to exceptional items 41.2 38.5 - 38.5 Depreciation (2.5) (2.1) - (2.1) Amortisation – software (8.3) (8.8) - (8.8) Amortisation – acquired intangibles (12.7) (10.8) - (10.8)

EBIT prior to exceptional items 17.7 16.8 - 16.8 Exceptional items (2.4) (4.5) - (4.5)

Reported EBIT 15.3 12.3 12.3 Net finance costs1 (6.5) (37.6) 31.2 (6.4)

Profit / (loss) before tax 8.8 (25.3) 31.2 5.9 Taxation2 (2.0) 0.4 (1.2) (0.8)

Profit / (loss) from continuing operations 6.8 (24.9) 30.0 5.1 Non-controlling interest (0.9) (3.2) - (3.2)

Profit/ (loss) attributable to ordinary shareholders 5.9 (28.1) 30.0 1.9

Earnings per share (pence) Basic 2.0 (562.0) 562.6 0.6

1Proforma net finance costs have been presented to better reflect the cost that would have been incurred had the Group’s current debt structure been in place throughout the current and prior period. 2Proforma taxation has been presented to better reflect the tax charge that would have been incurred had the Group’s current debt structure been in place throughout the prior period at an estimated effective tax rate for the Group of 15%.

Revenue Reported revenue increased by 5.9% to £191.9m (H1 2015: £181.2m) during the year whilst proforma revenue adjusted for acquisitions grew organically by 4.3%.

EBITDA prior to exceptional items EBITDA prior to exceptional items increased by 7.0% to £41.2m (H1 2015: £38.5m) reflecting the impact of acquisitions made in the current and prior year and the profit element of the organic growth at an improved margin. EBIT EBIT remains an important measure of the Group’s performance, reflecting profit before finance costs and taxation. In 2016, reported EBIT increased 24.4% to £15.3m (H1 2015: £12.3m). Exceptional items Exceptional operating costs of £2.4m (H1 2015: £4.5m) are related to driving our offshore and efficiency programme. Net finance costs Group net finance costs before exceptional items fell by £31.1m to £6.5m (H1 2015: £37.6m) reflecting the benefits of the Group’s new capital structure and loan agreements from October 2015. Profit before tax The Group made a profit for the period from continuing operations of £6.8m compared to loss of £24.9m in H1 2015.


Normalised results Normalised profit excludes exceptional items and amortisation of acquisition related intangible assets and includes finance costs on a proforma basis. Tax is deducted at 15% to reflect the Group’s estimated effective tax rate. This better allows the assessment of operational performance, the analysis of trends over time, the comparison of different businesses and the projection of future economic performance.

£m

H1 2016

H1 2015

Revenue 191.9 181.2

EBITDA prior to exceptional items 41.2 38.5 Depreciation (2.5) (2.1) Amortisation – software (8.3) (8.8) Net finance expense – proforma (6.5) (6.4)

Normalised PBT 23.9 21.2 Cash tax of 15% (3.6) (3.2)

Normalised PAT 20.3 18.0 Non-controlling interest (0.9) (3.2)

Normalised profit attributable to ordinary shareholders 19.4 14.8

Normalised earnings per share (pence) 6.5 4.9

Earnings per share Basic earnings per share of 2.0p (H1 2015: loss per share of 562.0p) is based on weighted average shares of 300m (H1 2015: 5m). Normalised earnings per share was 6.5p per share compared to the prior period of 4.9p per share, based on the number of shares in issue at 30 June 2016. This represents growth of 32.6%. Dividend per share The Board has declared an interim dividend of 1.64 pence per share. The interim dividend is to be paid on 26 October 2016 to shareholders on the register of members at close of business on 26 August 2016. Any shareholder wishing to participate in the Equiniti Dividend Reinvestment Plan (“DRIP”) needs to have submitted their election to do so by 5 October 2016. We maintain our progressive dividend policy which will see us distribute around 30% of our normalised profit attributable to ordinary shareholders each year. Capital structure The Group’s Consolidated Balance Sheet at 30 June 2016 is summarised as follows: £m

As at 30 June

2016

As at 30 June

2015

Assets Non-current assets 695.7 665.9 Current assets 197.2 130.8

Total assets 892.9 796.7

Liabilities Non-current liabilities 340.7 969.0 Current liabilities 162.4 107.4

Total liabilities 503.1 1,076.4

Net assets/ (liabilities) 389.8 (279.7)

Total equity 389.8 (279.7)

Current assets and current liabilities have increased significantly compared to the prior year as a result of higher agency broker receivables and payables, where there was a high level of stock market activity following the EU referendum in June 2016.


Pension deficit The valuation of the pension deficit in the DB scheme under IAS19 was not performed in the period, in line with Group policy. However, as a result of the EU referendum, we acknowledge that discount rates have fluctuated which will have an impact on the pension scheme liabilities, some of which will be offset by an opposite movement in asset values. We expect that this is a result of a short term market adjustment. A full valuation will be completed at the year end.

Cash flow

The Group generated a free cash flow before capital expenditure of £38.2m (H1 2015: £39.6m) representing a conversion of EBITDA to free cash flow of 93% (H1 2015: 103%). The main movements in cash flow are summarised below. £m

H1 2016

H1 2015

EBITDA prior to exceptional items 41.2 38.5 Non-exceptional working capital movement (3.0) 1.1

Free cash flow 38.2 39.6 Cash flow conversion (%) 93 103 Exceptional Items (2.8) (5.5) Capital expenditure (10.5) (8.3) Net interest costs (5.0) (16.7) Taxes paid (1.2) (0.9) Other (0.2) (0.3)

Free cash flow to equity holders 18.5 7.9 Net change in borrowings (6.0) 15.0 IPO related costs (18.3) - Investment in current year acquisitions (12.1) (17.6) Payment of deferred consideration (0.4) (3.7) Dividends paid (5.3) (2.0)

Net cash movement (23.6) (0.4)

Reconciliation of EBITDA to net cash inflow from operating activities (statutory cash flow statement) £m

H1 2016

H1 2015

EBITDA prior to exceptional items 41.2 38.5 Non-exceptional working capital movement (3.0) 1.1 Exceptional Items (2.8) (5.5) IPO related costs (18.3) - Taxes paid (1.2) (0.9) Other (0.3) 0.2

Net cash inflow from operating activities 15.6 33.4

Free cash flow The movement in working capital of (£3.0m) excludes cash flows relating to exceptional items and is indicative of the Group’s commitment to improve the working capital position through automating invoice generation and improving payment terms. Capital expenditure Net expenditure on tangible and intangible assets was £10.5m (H1 2015: £8.3m). This represents 5.5% of revenue (H1 2015: 4.6%) demonstrating the Group’s commitment to develop industry leading software. Net interest costs Net interest costs in the period was £5.0m (H1 2015: £16.7m). Total interest bearing loans decreased from £501m to £314m at a lower rate of interest. Investment in current year acquisitions Net cash outflow on current year acquisitions was £12.1m (H1 2015: £17.6m). A further £0.4m was spent on deferred consideration for prior year acquisitions.


Free cash flow to equity holders Free cash flow to equity holders represents our cash flow prior to any acquisition, refinancing or share capital cash flows. It is a key measure of cash earned for the shareholders of the group. Free cash flow to equity holders increased by 134.2% to £18.5m in the period as profits grew and interest and exceptional items declined. Tax paid

Taxes paid relate to tax payable by MyCSP Limited and our business in India. Equiniti has the following tax assets to utilise:

- Schedule D1 trading losses of £215m

- Intangible assets of £390m

- Other tax assets of £35m

This will allow the Group to benefit from having an effective cast tax rate that is lower than the UK corporation tax rate for the foreseeable future, which is estimated at approximately 15% of pre-tax profit. Bank borrowings and financial covenants At the 30 June 2016, net debt was £261.7m (30 June 2015: £471.3m). £m

30 June 2016

30 June 2015

Cash and cash equivalents (52.9) (29.6) Senior debt 250.0 440.0 Revolving credit facility 64.0 60.5 Other 0.6 0.4

Net debt 261.7 471.3

Debt reduced in the period by £209.6m to £261.7m through strong cash flow and a refinancing which took place when the Group listed on the London Stock Exchange in October 2015. This has reduced our average cost of debt to 3.1% going forwards. The ongoing cost of our debt is fixed at c3% under this new funding agreement until 2018 when our current interest rate swaps expire. Acquisitions

During the period the Group completed two acquisitions. On 3 March 2016, the Group acquired KYCnet. KYCnet provides cutting edge workflow technology for on-boarding and monitoring of commercial and retail clients and has broad applicability across financial services as well as retail, travel and legal services. On 4 March 2016, the Group acquired RiskFactor, a UK based provider of credit decisioning and risk profiling software for commercial lending, with deep client relationships and broad applicability across lending products. RiskFactor complements our other ‘control risk’ capabilities within our Intelligent Solutions division. Both acquisitions will enhance our capabilities in compliance for Financial Services and will contribute to organic growth as we leverage our cross-sell to existing clients. Events occurring post reporting period In addition, on 22 July 2016, the Group acquired Toplevel Computing for a total consideration of £2.8m (net of cash acquired). Toplevel is a digital services technology provider of large-scale digital case management solutions. This acquisition will add to our technology-based services and demonstrates progress on our strategy. Digitisation of the customer journey is a key focus for our clients and we see a material cross-sale opportunity into our extensive financial services client base.


PRINCIPAL RISKS AND UNCERTAINTIES

The Group’s activities expose it to a variety of risks; ‘annual cycle’ risks, which are risks that could materialise within the next 12 months, and a number of risks that could affect our business in the longer-term. The principal risks and uncertainties facing the Group are set out on pages 42 to 46 of the 2015 Annual Report and Accounts, a copy of which is available on the Group’s website, www.equiniti.com. There have been no changes in the Group’s risk management processes or policies and the risks and mitigating activities are unchanged from those set out in the 2015 Annual Report and Accounts. The key risks facing the Group can be summarised as follows:

Corporate actions We earn revenue from our clients’ corporate actions, such as initial public offerings, mergers, acquisitions and share buybacks. The level of corporate actions in any given year is hard to predict, as corporate actions vary in size and frequency, and fluctuate according to factors such as macroeconomic conditions.

IT security breach We rely on our systems to process a large number of complicated transactions each day. These systems contain confidential information about our clients and their employees, shareholders, pensioners and customers. Breaches of our IT security could lead to unauthorised access to or loss of this informaiton, or prevent us from using our systems to provide services to clients.

Loss of key clients While our business is spread across 1,700 clients, we have a small number of clients that are material to our business. Our largest single client provided 7.5% of our 2015 revenues and our top ten clients made up 35.5% of our 2015 revenues between them. We could lose a key client when its contract with us comes up for renewal or if a client is acquired by a company we do not serve.

Increased regulatory burden There is an ongoing trend for greater regulation in our markers. For example, the EU Directive on Markets in Financial Instruments and its accompanying regulation (MiFID II) introduces a number of changes, including more extensive supervisory powers for regulators, greater market infrastructure and transaction reporting requirements, and more robust investor protection.

Attraction and retention of high-calibre employees We depend on the knowledge, expertise and efforts of our people, including our senior executives and other senior management, Key Account relationship managers and key IT personnel. These individuals are instrumental in setting our strategic direction, operating our business, identifying, recruiting and training other key personnel and identifying business opportunities.

Change and transformation We have an ongoing change and transformation programme to improve our efficiency and reduce our costs, including increasing the volume of back-office processing and IT functions carried out in our centre in Chennai, India.

Change in regulatory trends Our business has benefitted in recent years from FCA action requiring remediation by clients, and in particular the remediation of mis-sold PPI. Any reduction of the FCA’s remediation requirements could lower demand for our services.

Outsourcing trends A number of trends are driving demand for our services. Any reversal of these trends, leading to less outsourcing or a reduction in spending on outsourcing, could correspondingly affect demand for our services.

Client interest We earn interest on some balances we hold on clients’ behalf. In 2015, this accounted for 10% of our EBITDA. A change in regulation could require us to pass through interest received to our clients.

Dematerialistion of share certificates Equiniti is the UK’s largest broker for certificated trades. The UK Government intends to implement the European Directive on dematerialisation of paper share certificates. As a result, shareholder records currently held by UK registrars in paper form will be replaced by an electronic format.

http://www.equiniti.com/


DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that, to the best of their knowledge

the condensed set of financial statements has been prepared in accordance with IAS 34 International Financial Reporting;

the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and a description of principal risks and undertainties for the remaining six months of the year); and

the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties’ transactions and changes therein).

By order of the Board G Wakeley J Stier Chief Executive Chief Financial Officer 28 July 2016


CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2016

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Continuing operations Note £m £m £m

Revenue 3 191.9 181.2 369.0

Operating costs before exceptional costs, depreciation and amortisation 4 (150.7) (142.7) (282.8)

EBITDA* prior to exceptional items 3 41.2 38.5 86.2

Operating costs - exceptional items 5 (2.4) (4.5) (32.8)

EBITDA* 38.8 34.0 53.4

Depreciation of property, plant and equipment (2.5) (2.1) (4.4)

Amortisation of software (8.3) (8.8) (15.8)

Amortisation of acquisition related intangible assets (12.7) (10.8) (23.0)

Total operating costs 4 (176.6) (168.9) (358.8)

Earnings before interest and tax (EBIT) 15.3 12.3 10.2

Finance income 0.1 0.4 0.7

Finance costs before exceptional items (6.6) (38.0) (61.4)

Finance costs - exceptional items - - (21.2)

Net finance costs 9 (6.5) (37.6) (81.9)

Profit/(loss) before income tax 8.8 (25.3) (71.7)

Income tax (charge)/credit 11 (2.0) 0.4 25.9

Profit/(loss) for the period 6.8 (24.9) (45.8)

Profit/(loss) for the period attributable to:

- Owners of the parent 5.9 (28.1) (50.4)

- Non-controlling interests 0.9 3.2 4.6


Basic and diluted profit/(loss) per share (in £) attributable to owners of the parent:

Basic profit/(loss) per share 6 0.02 (5.62) (0.93)

Diluted profit/(loss) per share 6 0.02 (5.62) (0.93)

*Earnings before interest, tax, depreciation and amortisation


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

£m £m £m


Other comprehensive income

Items that may be subsequently reclassified to profit or loss

Fair value movement through hedging reserve 5.8 - 2.0

Net exchange gain on translation of foreign operations 0.1 - -

5.9 - 2.0

Items that will not be reclassified to profit or loss

Defined benefit plan actuarial (loss)/gain - (1.0) 2.6

Deferred tax credit/(charge) on other comprehensive income - 0.2 (0.4)

- (0.8) 2.2

Other comprehensive income/(loss) for the period 5.9 (0.8) 4.2

Total comprehensive profit/(loss) for the period 12.7 (25.7) (41.6)

Total comprehensive profit/(loss) attributable to:

- Owners of the parent 11.8 (28.9) (46.4)

- Non-controlling interests 0.9 3.2 4.8

Total comprehensive profit/(loss) for the period 12.7 (25.7) (41.6)


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION


As at June 2016

As at June 2015

As at December

2015

£m £m £m

Assets

Non-current assets

Property, plant and equipment 13.4 11.8 11.4

Intangible assets 653.5 642.9 637.2

Other financial assets 12.0 11.2 1.8

Deferred income tax assets 16.8 - 20.0

695.7 665.9 670.4

Current assets

Trade and other receivables 76.8 66.4 70.5

Agency broker receivables 67.5 34.7 15.9

Cash and cash equivalents 52.9 29.7 76.5

197.2 130.8 162.9

Total assets 892.9 796.7 833.3

Liabilities

Non-current liabilities

External loans and borrowings 308.9 648.8 314.3

Preference shares and loans due to ultimate controlling party - 288.7 -

Deferred consideration - 4.0 -

Employee benefits 13.5 16.7 13.5

Provisions for other liabilities and charges 13.5 4.8 4.5

Other financial liabilities 4.8 0.4 0.5

Deferred income tax liabilities - 5.6 -

340.7 969.0 332.8

Current liabilities

Trade and other payables 90.2 67.9 97.8

Agency broker payables 67.5 34.7 15.9

Employee benefits - 0.4 -

Income tax payable 1.0 1.4 1.8

Provisions for other liabilities and charges 3.5 2.6 4.1

Other financial liabilities 0.2 0.4 0.4

162.4 107.4 120.0

Total liabilities 503.1 1076.4 452.8

Net assets/(liabilities) 389.8 (279.7) 380.5

Equity

Equity attributable to owners of the parent

Share capital 0.3 5.0 0.3

Share premium - 3.5 -

Capital contribution reserve 181.5 - 181.5

Hedging reserve 7.6 (0.2) 1.8

Share-based payment reserve 1.1 - 0.2

Translation reserve 0.1 - -

Accumulated retained earnings/(losses) 180.6 (306.8) 176.7

371.2 (298.5) 360.5

Non-controlling interest 18.6 18.8 20.0

Total equity 389.8 (279.7) 380.5


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE 6 MONTHS ENDED 30 JUNE 2016

Share

capital Share

premium

Capital contribu-

tion reserve

Hedging reserve

Share-based

payments reserve

Trans-

lation reserve

Accumu- lated

retained

(losses)/ profits

Non-con

-trolling interest

Total equity

£m £m £m £m £m £m £m £m £m

Balance at 1 January 2015 5.0 3.5 - (0.2) - - (277.9) 17.7 (251.9)

Comprehensive (loss)/income (Loss)/profit for the year per the statement of comprehensive

income - - - - - - (50.4) 4.6 (45.8) Other comprehensive income/(expense) Changes in fair value of cash flow hedges - - - 2.0 - - - - 2.0

Actuarial gains on defined benefit pension plans - - - - - - 2.4 0.2 2.6 Deferred tax on defined benefit

pension plans - - - - - - (0.4) - (0.4)

Total other comprehensive income - - - 2.0 - - 2.0 0.2 4.2

Total comprehensive income/(expense) - - - 2.0 - - (48.4) 4.8 (41.6)

Issue of share capital 0.3 494.7 - - - - - - 495.0

Capital reduction (4.8) (498.2) - - - - 503.0 - -

Buy back of own shares (0.2) - 0.2 - - - - - -

Capital contribution - - 181.3 - - - - - 181.3

Dividends - - - - - - - (1.1) (1.1) Transactions with non-controlling

interests - - - - - - - (1.4) (1.4)

Share-based payments expense - - - - 0.2 - - - 0.2

Transaction with owners

recognised directly in equity (4.7) (3.5) 181.5 - 0.2 - 503.0 (2.5) 674.0

Balance at 31 December 2015 0.3 - 181.5 1.8 0.2 - 176.7 20.0 380.5

Balance at 1 January 2015 5.0 3.5 - (0.2) - - (277.9) 17.7 (251.9)

Comprehensive (loss)/income (Loss)/profit for the period per the

statement of comprehensive income - - - - - - (28.1) 3.2 (24.9) Other comprehensive

income/(expense) Actuarial losses on defined benefit

pension plans - - - - - - (1.0) - (1.0) Deferred tax on defined benefit pension plans - - - - - - 0.2 - 0.2

Total other comprehensive loss - - - - - - (0.8) - (0.8)

Total comprehensive income/(expense) - - - - - - (28.9) 3.2 (25.7)

Dividends - - - - - - - (1.1) (1.1) Transactions with non-controlling

interests - - - - - - - (1.0) (1.0)

Transaction with owners

recognised directly in equity - - - - - - - (2.1) (2.1)

Balance at 30 June 2015 5.0 3.5 - (0.2) - - (306.8) 18.8 (279.7)


Share

capital Share

premium

Capital

contribu-tion

reserve Hedging reserve

Share-

based payments

reserve

Trans- lation

reserve

Accumu- lated

retained (losses)/

profits

Non-con -trolling interest

Total equity

£m £m £m £m £m £m £m £m £m

Balance at 1 January 2016 0.3 - 181.5 1.8 0.2 - 176.7 20.0 380.5

Comprehensive income Profit for the period per the statement of comprehensive

income - - - - - - 5.9 0.9 6.8

Other comprehensive income Changes in fair value of cash flow hedges - - - 5.8 - - - - 5.8

Net exchange gain/(loss) on translation of foreign operations - - - - - 0.1 - - 0.1

Total other comprehensive income - - - 5.8 - 0.1 - - 5.9

Total comprehensive income - - - 5.8 - 0.1 5.9 0.9 12.7

Dividends - - - - - - (2.0) (1.6) (3.6) Transactions with non-controlling interests - - - - - - - (0.7) (0.7)

Share-based payments expense - - - - 0.9 - - - 0.9

Transaction with owners recognised directly in equity - - - - 0.9 - (2.0) (2.3) (3.4)

Balance at 30 June 2016 0.3 - 181.5 7.6 1.1 0.1 180.6 18.6 389.8


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Note £m £m £m

Cash flows from operating activities

Cash generated from operations 16 15.6 33.4 72.2

Net cash inflow from operating activities 15.6 33.4 72.2

Cash flows from investing activities

Interest received 0.1 0.1 0.4

Dividends from investment - 0.3 0.3

Business acquisitions net of cash acquired (12.1) (17.6) (19.9)

Payment relating to prior year acquisition (0.4) (3.7) (3.9)

Acquisition of property, plant and equipment (2.1) (1.3) (2.9)

Acquisition of intangible assets (8.4) (7.2) (15.5)

Net cash outflow from investing activities (22.9) (29.4) (41.5)

Cash flows from financing activities

Proceeds from issue of share capital - - 495.0

Proceeds from new bank loans - - 250.0

(Decrease)/increase in RCF facility (6.0) 15.0 24.5

Repayment of loan notes - - (440.0)

Repayment of PIK loans - - (161.9)

Repayment of preference shares - - (105.0)

Payment of finance lease liabilities (0.3) (0.2) (0.3)

Interest paid (4.8) (16.7) (30.1)

Dividends paid (2.0) - -

Dividends paid to non-controlling interests (3.3) (2.3) (2.3)

Loan fees paid and other finance costs - (0.2) -

Refinancing fees paid - - (14.2)

Net cash (outflow)/inflow from financing activities (16.4) (4.4) 15.7

Net (decrease)/increase in cash and cash equivalents (23.7) (0.4) 46.4

Foreign exchange gains on retranslation of cash balances 0.1 - -

Cash and cash equivalents at 1 January 76.5 30.1 30.1

Cash and cash equivalents at 30 June/31 December 52.9 29.7 76.5


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED 30 JUNE 2016

1) General information

Equiniti Group plc is a public limited company which is listed on the London Stock Exchange, incorporated and domiciled in the United

Kingdom. The company and its subsidiaries (collectively, the “Group”) provide complex administration and payments services supported

by technology platforms to a wide range of organisations. The registered office address is Sutherland House, Russell Way, Crawley, West

Sussex, RH10 1UH.

The financial information in these condensed interim financial statements has been reviewed but not audited by the company’s auditor,

PricewaterhouseCoopers LLP.

These condensed interim financial statements do not comprise the statutory accounts within the meaning of section 434 of the Companies

Act 2006. The Annual Report and Accounts for the year ended 31 December 2015 were approved by the board of directors on 7 March

2016 and have been delivered to the Registrar of Companies. The external auditor has reported on the 2015 accounts and its report was

unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498 of the Companies

Act 2006.

2) Basis of preparation

These condensed interim financial statements for the six months ended 30 June 2016 have been prepared in accordance with the

Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, ‘Interim financial reporting’, as adopted by the

European Union. These interim financial statements have been prepared on the basis of the accounting policies as set out in the previous

Annual Report and Accounts for the year ended 31 December 2015 which are available at www.equiniti.com, except for taxes on income

in interim periods are accrued using tax rates that are expected to be applicable for the full accounting year.

Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that effect the

application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from

these estimates.

In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group’s

accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements

for the year ended 31 December 2015.

Going concern

The Directors, after making enquiries and on the basis of current financial projections and the facilities available at the reporting date,

believe that the Group has adequate financial resources to continue in operation for the foreseeable future. For this reason, they continue

to adopt the going concern basis in preparing the condensed consolidated financial statements.

3) Operating segments

The Group's operating segments have been identified as Investment Solutions, Intelligent Solutions, Pension Solutions and Interest in

line with how the Group runs and structures its business. Central costs principally include corporate overheads. The EBITDA prior to

exceptional items of each segment is reported after charging certain central costs based on the business segments’ usage of central

facilities and services.

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Reported revenue £m £m £m



Pension Solutions 65.6 72.0 142.5

Interest 5.8 3.5 9.3

Total revenue 191.9 181.2 369.0


3) Operating segments (continued)

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

EBITDA prior to exceptional items £m £m £m



Pension Solutions 11.0 14.0 26.7

Interest 5.8 3.5 9.3

Total segments 47.7 43.4 94.3

Central costs (6.5) (4.9) (8.1)

EBITDA prior to exceptional items 41.2 38.5 86.2

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

£m £m £m

EBITDA prior to exceptional items 41.2 38.5 86.2

Exceptional items (2.4) (4.5) (32.8)

EBITDA 38.8 34.0 53.4

Depreciation of property, plant and equipment (2.5) (2.1) (4.4)

Amortisation of software (8.3) (8.8) (15.8)

Amortisation of acquisition related intangible assets (12.7) (10.8) (23.0)

Finance costs - net (6.5) (37.6) (81.9)

Profit/(loss) before tax 8.8 (25.3) (71.7)

4) Operating costs

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Expenses by nature: £m £m £m

Employee benefit expense 81.2 73.2 147.4

Direct costs 38.0 33.0 66.3

Bought in services 4.0 10.6 18.0

Premises costs 3.2 3.0 5.8

Operating lease costs 3.7 3.2 6.3

Other general business costs 20.6 19.7 39.0

Operating costs before exceptional costs, depreciation and amortisation 150.7 142.7 282.8

Exceptional items (note 5) 2.4 4.5 32.8

Depreciation of tangible assets and amortisation of software 10.8 10.9 20.2

Amortisation of acquisition related intangible assets 12.7 10.8 23.0

Total operating costs for continuing operations 176.6 168.9 358.8


5) Operating costs - Exceptional items

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Included in the profit for the period are the following: £m £m £m

Acquisition related expenses - 2.0 2.2

Change of control costs - - 22.5

Property costs (0.2) - -

Restructuring and other costs 2.6 2.5 8.1

Total exceptional items 2.4 4.5 32.8

Acquisition related expenses represent fees paid to third party advisors and transaction fees in respect of acquisitions completed in the

period, as well as costs incurred on further potential acquisitions and disposals not completed. This is presented net of any income

recognised on reversal of contingent consideration provisions.

Change of control costs relate to legal, advisory, banking and other fees in relation to the Group's change in ownership which resulted in

the Group's listing on the London Stock Exchange.

Property costs relate to the provision for rent and related expenses on onerous leases offset by the release of unused onerous lease

accruals.

Restructuring and other costs primarily relate to costs associated with building an offshore centre in Chennai and driving the Group’s

efficiency agenda.

6) Earnings per share

Basic and diluted earnings per share:

6 months

ended June 2016

6 months ended

June 2015

Year ended December

2015

£m £m £m

Profit/(loss) from continuing operations attributable to owners of the parent 5.9 (28.1) (50.4)

Weighted average number of ordinary shares in issue (thousands) 300,000 5,000 54,301

Employee share options 399 - -

Weighted average number of ordinary shares in issue adjusted for the effect of dilution (thousands)

300,399 5,000 54,301

Basic profit/(loss) per share (in £) 0.02 (5.62) (0.93)

Diluted profit/(loss) per share (in £) 0.02 (5.62) (0.93)

As the Group was loss making in the prior year, the issue of share options did not have a dilutive effect on earnings per share.


7) Dividends

Amounts recognised as distributions to equity holders of the parent in the period/year:

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

£m £m £m

Final dividend for year ended 31 December 2015 2.0 - -

2.0 - -

The recommended dividend payable in respect of the period ended 30 June 2016 is £4.9m or 1.64p per ordinary share (year ended 31

December 2015: £2.0m). This is in line with the Group’s stated policy of a pay-out ratio of around 30% of adjusted normalised profit

after cash tax. This proposed dividend was not accrued as a liability at 30 June 2016.

The dividend of £2.0m paid in the period ended 30 June 2016 and disclosed in the Statement of Changes in Equity represents the final

ordinary dividend for the year ended 31 December 2015 of £0.68p per share which was calculated on a pro-forma basis for our period

of public ownership in 2015. Pro-rated for a full year of public ownership in 2015, this figure would be 4.08p per share.

8) Acquisitions of businesses

KYCnet BV

On 8 March 2016, the Group purchased the entire issued share capital of KYCnet BV and its subsidiaries (“KYCnet”) for £17.2m, consisting

of £8.4m cash on completion, £2.0m deferred consideration, of which £0.4m is payable in September 2016 and £1.6m payable in March

2018, and up to £7.5m of contingent consideration, discounted to £6.8m, payable in March 2019. The business had net assets on that

date of £4.4m including a cash balance of £0.1m. KYCnet is based in the Netherlands and offers services and software to major financial

institutions with a focus on client onboarding and customer due diligence processes.

The Group took control of KYCnet as of 1 January 2016 and the results of the business have been consolidated since that date. KYCnet

contributed £2.2m of revenue and £0.4m of net profit to the Group results since the date of control.

On acquisition intangible assets have been recognised relating to software and to customer contracts and related relationships with a

combined attributable value of £5.0m. The amounts relating to the intangible assets and goodwill are provisional and subject to further

evaluation and adjustment, in accordance with accounting standards. The value of goodwill reflects amounts in relation to the expected

benefit of the ability to generate new streams of revenue and expected synergies of combining the operations of KYCnet and the Group.

Recognised amounts of identifiable assets acquired and liabilities assumed £m

Property, plant and equipment 0.1

Software 2.6

Customer intangibles 3.3

Trade and other receivables 0.7

Cash 0.1

Trade and other payables (1.3)

Loans to shareholder (0.2)

Deferred tax liability (0.9)

Net identifiable assets and liabilities 4.4

Goodwill on acquisition 12.8

Total consideration 17.2

Cash acquired (0.1)

Deferred consideration (2.0)

Contingent consideration (6.8)

Net cash outflow in the period 8.3

As at 30 June 2016, the minimum amount of contingent consideration payable is £nil and the maximum amount is £7.5m. The final

amount to be paid will be determined based on the acquiree's financial performance over the qualifying period and is only payable if the

business grows in line with its business plan.


8) Acquisitions of businesses (continued)

Riskfactor Solutions Limited

On 4 March 2016, the Group purchased the entire issued share capital of Information Software Solutions Limited and its subsidiaries

("Riskfactor Group") for £9.9m, consisting of £5.2m cash on completion, £2.0m of deferred consideration, payable in March 2018, and

up to £3.0m of contingent consideration, discounted to £2.7m, payable in March 2019. The business had net assets on that date of

£4.3m including a cash balance of £1.5m. Riskfactor provides software based risk management solutions to the commercial finance

sector, which incorporate functionality such as potential fraud detection and workflow management.

The Group took control of Riskfactor Group as of 1 February 2016 and the results of the business have been consolidated since that date.

Riskfactor Group contributed £1.0m of revenue and £0.3m of net profit to the Group results since the date of control. If the business had

been acquired on 1 January 2016 it would have contributed an additional £0.3m of revenue and £0.1m of net profit to the Group's results

for the period ended 30 June 2016.

On acquisition intangible assets have been recognised relating to software and customer contracts and related relationships with a

combined attributable value of £4.5m. The amounts relating to the intangible assets and goodwill are provisional and subject to further

evaluation and adjustment, in accordance with accounting standards. The value of goodwill reflects expected synergies from combining

the operations and expertise of Riskfactor and the Group and to enable future market development.

Recognised amounts of identifiable assets acquired and liabilities assumed £m

Property, plant and equipment 0.1

Software 1.8


Trade and other receivables 0.8

Cash 1.5

Trade and other payables (1.8)

Deferred tax liability (0.8)

Net identifiable assets and liabilities 4.3


Total consideration 9.9

Cash acquired (1.5)

Deferred consideration (2.0)

Contingent consideration (2.7)


As at 30 June 2016, the minimum amount of contingent consideration payable is £nil and the maximum amount is £3.0m. The final

amount to be paid will be determined based on the acquiree's financial performance over the qualifying period and is only payable if the

business grows in line with its business plan.

Prior year acquisitions

At 31 December 2015, the fair value adjustments made against net assets acquired during 2015 were provisional. The accounting in

respect of these acquisitions has since been finalised. The adjustments to net assets acquired and goodwill of all acquisitions made during

2015 are as follows:

Fair value of 2015 acquisitions £m

Software (0.9)


Cash (0.1)

Deferred tax asset 0.1

Net identifiable assets and liabilities (0.5)


Total consideration -

Cash acquired 0.1



9) Finance income and costs

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Finance income £m £m £m

Interest income (on own balance) 0.1 0.1 0.4

Dividend income - 0.3 0.3

Total finance income 0.1 0.4 0.7

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Finance costs - ordinary £m £m £m

Interest cost on senior secured loan notes - 14.8 24.9

Interest on senior secured borrowings 3.1 - 1.2

Interest cost on revolving credit facility 1.3 1.2 2.3

Interest cost on payment in kind ("PIK") loan - 8.5 10.8

Interest on preference shares classified as liabilities - 8.2 12.2

Interest cost on loans from related parties - 2.8 5.0

Amortised fees 0.6 1.6 2.8

Net finance cost relating to pension scheme 0.3 0.3 0.6

Unwinding of discounted amount in provisions 0.4 0.1 0.4

Cost of interest rate swap against financial liabilities 0.8 0.3 0.5

Other fees and interest 0.1 0.2 0.7

Total finance costs - ordinary 6.6 38.0 61.4

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Finance costs - exceptional £m £m £m

Write off of unamortised fees of previous finance arrangement - - 12.3

Early termination of bond notes - - 8.9

Total finance costs - exceptional - - 21.2

Exceptional finance costs relate to costs incurred by putting new financing arrangements into place during 2015. These costs include the

write off of unamortised arrangement fees that related to the refinancing exercise that took place in 2013 and the break costs for the

early termination of the Group’s senior secured notes.

10) Net debt

As at

30 June 2016

As at 30

June 2015

As at 31 December

2015

Net debt £m £m £m

Senior secured loans 250.0 440.0 250.0

Revolving credit facility ("RCF") 64.0 60.5 70.0

Other 0.6 0.4 0.9

Cash and cash equivalents (52.9) (29.6) (76.5)

Total net debt 261.7 471.3 244.4


11) Income tax charge/(credit)

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015

Recognised in the statement of comprehensive income: £m £m £m

Current tax charge 0.4 1.4 2.4

Deferred tax charge/(credit) 1.6 (1.8) (28.3)

Total income tax charge/(credit) 2.0 (0.4) (25.9)

The standard rate of corporation tax in the UK is 20% with effect from 1 April 2015 and accordingly the profits for the half year ended

30 June 2016 are taxed at 20%. The taxation charge for the six months ended 30 June 2016 is based on an estimated full year underlying

effective tax rate of 22%.

12) Employee benefits

Defined benefit pension plans

The Group operates three funded defined benefit pension plans in the UK; Equiniti ICS Limited, Paymaster (1836) Limited and MyCSP Limited. The defined benefit obligation as at 30 June 2016 is calculated on a year-to-date basis using the latest actuarial valuation as at 31 December 2015 and has not been updated for the half year statement in line with Group policy. This will be updated as part of our normal year end processes on 31 December 2016.

13) Financial risk management

The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate risk, foreign

exchange rate risk and equity price risk). The condensed interim financial statements do not include all the financial risk management

information and disclosures required in the annual financial statements and they should be read in conjunction with the Annual Report

and Accounts 2015. There have been no changes in the risk management department or in any risk management policies since the year

end.

14) Financial instruments fair value disclosures

There are no material differences between the carrying value of assets and liabilities and their fair value. The only financial instrument

measured at fair value is the interest rate swap.

The following table presents the Group’s financial assets and liabilities that are measured at fair value:

As at 30

June 2016

As at 30

June 2015

As at 31 December

2015

Level £m £m

Financial assets

Derivative financial instruments 2 12.0 0.2 1.8

Financial liabilities

Derivative financial instruments 2 4.4 0.4 -

There were no transfers between levels during the period. Valuation techniques used to value these financial instruments are consistent

with those used for the year ended 31 December 2015 as disclosed in note 6.11 of the Annual Report and Accounts 2015.


15) Related party transactions

Transactions with key management personnel

The compensation of key management personnel (including the directors) is as follows:

6 months ended

June 2016

6 months ended

June 2015

Year ended December

2015 £m £m £m

Key management emoluments including social security costs 2.1 1.7 4.3

Company contributions to money purchase pension plans - - 0.1

Compensation for loss of office - 0.2 -

Share based payments 0.3 - 0.1

Total 2.4 1.9 4.5

Key management are the directors of the Group (includes non-executives), as well as the senior non-statutory director of each of the

major subsidiaries, who have authority and responsibility to control, direct or plan the major activities within the Group.

As part of the IPO process, shares were issued to certain employees of the group as a result of an incentive agreement with the then

controlling shareholder, Advent. The shares were treated as an income tax event for the receiving individuals and are subject to lock up

arrangements, as disclosed in the prospectus. As a consequence, the group lent those individuals who received the shares monies to

cover their PAYE and NI liabilities. These loans were all subject to relevant approvals through the IPO process and are treated as a

benefit in kind to the receiving individuals if not settled within nine months of issuance; all benefiting individuals have entered into a loan

agreement with the group. These loans must be repaid no later than October 2018. The total value of loans made to key management

personnel at 30 June 2016 was £2.7m (31 December 2015: £2.7m).

16) Reconciliation of profit to cash generated from operations

6 months ended June

2016

6 months ended

June 2015

Year ended December

2015 Continuing operations £m £m £m

Profit/(loss) before income tax 8.8 (25.3) (71.7)

Adjustments for:

Depreciation and amortisation of software 10.8 10.9 20.2

Amortisation of acquisition related intangibles 12.7 10.8 23.0

Finance income (0.1) (0.4) (0.7)

Finance costs 6.6 38.0 82.6

Share-based payments expense 0.9 - 0.2

Changes in working capital:

Increase in trade and other receivables (4.9) (1.7) (1.9)

(Decrease)/increase in trade and other payables (17.0) 3.0 24.2

Decrease in provisions (1.0) (1.0) (2.2)

Tax paid (1.2) (0.9) (1.5)

Total cash generated from operations 15.6 33.4 72.2

Documents

29 July 2016 EQUINITI GROUP PLC RESULTS FOR THE 6 …/media/Files/E/... · Equiniti Group plc - Results for the six months ended 30 June 2016 Page 2 of 25 Analyst and Investor presentation