EQS Group (DE:EQSn) continues to add functionality to its cloud-based offering, growing its potential share of client spend across investor relations, compliance and corporate communications. H117 top-line growth was boosted by the consolidation of ARIVA (67.5% owned), with good momentum into H217 as clients prepare to meet further regulatory requirements. Operating profits, which dipped 3% y-o-y, were held back by spending on developing new services and on geographic expansion. With the IT and geographic platforms now in place, the EBITDA margin is set to expand over the medium term. The share price has performed strongly over the last year, yet the valuation remains at a discount to larger, more mature peers.
Platform in place
The group now has its core platform in place, both from an IT and a geographic perspective. It is equipped to handle all aspects of investor relations including regulatory requirements and corporate communications and increasingly extending into the legal aspects. There was good top-line progress in H117, particularly in Germany, both organic (revenues up 11%) and from consolidating ARIVA. The upcoming PRIIP regulations are stimulating demand for workflow solutions, while the Market Abuse Regulations are boosting numbers of corporate announcements. Regulatory requirements both within the EU and elsewhere constantly increase in number and complexity, giving a strong trading backdrop, particularly for Q417.
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