Eqs Group AG (DE:EQSn) has produced strong Q117 figures, with revenues up 49% on the prior year, boosted by the consolidation of ARIVA, with organic growth at 13%. This performance is largely attributable to demand stimulated by regulatory changes, as built into our forecasts which are unchanged on these results. The mid-2016 introduction of the European Market Abuse Regulation greatly added to the compliance burden, while the impending PRIIP regulations for packaged products provide a fertile backdrop for ARIVA. Good share price performance (and underperformance by peers) has narrowed the discount to under 10%.
Germany driving
Having focused on the potential for expansion in international markets and cross-marketing, the thrust of growth in this reporting period came from the domestic German market, where revenues were 68% higher than the prior year. Part of this is the mechanistic inclusion of ARIVA (67.5%-owned), where revenues were up 41%. Also encouraging was the growth in sales of INSIDER MANAGER, which helped push underlying domestic sales up by around 14%, despite lower bond and equity issuance. Our forecasts for FY17 and FY18 are unchanged on the back of these figures, as is company guidance.
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