EQT Holdings Ltd [ASX: EQT] provides the following update on the impact of the COVID-19 pandemic on its business and earnings.
EQT has long term revenue streams and a strong balance sheet with low debt and high levels of liquidity. EQT is operating as usual with employees working both on-site and increasingly from home.
EQT has previously indicated that FY20 second half earnings growth was expected to improve as revenue from new business grew. It also acknowledged that market volatility would continue to influence outcomes.
As the majority of EQT revenues are linked to the level of funds under management, administration and supervision, the market downturn is having an adverse impact on earnings and therefore, the previous guidance is no longer appropriate. At this stage, it is not possible to precisely quantify the impact on earnings as markets remain highly volatile.
As previously communicated, the two primary drivers of market leverage on revenues are:
- for the Trustee and Wealth Services (TWS) business - approximately 50-60% leverage to the (daily) ASX200; and
- for the Corporate Trustee Services (CTS) business - approximately 50% leverage to the (daily) global MSCI.
Revenue is also leveraged to other asset classes.
The Group is positioned with low gearing, approximately $30 million of cash surplus to regulatory requirements, and $20 million of undrawn committed bank facilities. The Group’s debt facility was renewed in December 2019 and matures in December 2022.
EQT Managing Director, Mick O’Brien said, “The safety and wellbeing of our employees are a priority and we are taking action across the business to protect them. We are also taking steps to ensure we continue to support our clients, beneficiaries, investors, members and other stakeholders during this challenging time.”
EQT will continue to provide updates as appropriate.
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Mick O’Brien, Managing Director has authorised that this document be given to the ASX.
General Manager – Marketing & Communications
03 8623 5396 / 0403 172 024
Mick O’Brien Philip Gentry
Managing Director Chief Financial Officer and Chief Operating Officer
+61 3 8623 5202 +61 3 8623 5372
Equity Trustees was established in 1888 for the purpose of providing independent and impartial Trustee and Executor services to help families throughout Australia protect their wealth. As Australia’s leading specialist trustee company, we offer a diverse range of services to individuals, families and corporate clients including asset management, estate planning, philanthropic services and Responsible Entity (RE) services for external Fund Managers. Equity Trustees is the brand name of EQT Holdings Limited (ABN 22 607 797 615) and its subsidiary companies, publicly listed company on the Australian Securities Exchange (ASX: EQT) with offices in Melbourne, Bendigo, Sydney, Brisbane, Perth and London.