Equita, the solid, diversified and highly-profitable investment bank
Equita praises a particular business model that invests in capital-light initiatives. This enables the Group to distribute significant portion of net profits and remunerate shareholders, keeping at any time its unique financial soundness, as demonstrated by the stong Total Capital Ratio (well above minimum capital requirements).
Historically, Equita always distributed 100% of net profits to its shareholders. Since 2017, following the admission to AIM Italia (and then the passage to the STAR segment of Borsa Italiana in 2018) has decided to retain each year a portion of net profits, pursuing a conservative approach aimed at promoting more stability to the dividends and finance potential extraordinary financial transactions.
A growth story, distinguished by sound dividends
Equita has not announced any dividend policy but, since listed, has always distributed a significant portion of net profits. This has been made possible by the Group's financial soundness, the focus on capital-light initiatives and the direct involvement of managers and employees in the share capital of the Company.
More in detail:
- Total Capital Ratio is significantly above the minimum regulatory requirements (28% on average in the last three years)
- Business model is focussed on capital-light initiatives and this enables the Company to distribute a significant component of its profits
- Management and employees are invested into the company and they benefit from the dividend distribution. Dividends are a significant portion of the variable remuneration of Equita's professionals who are invested with c. 50%+ of the share capital and receiving c. 70%+ of the dividends (thus excluding the treasury shares that do not receive any dividend)
- Management pursue a conservative and long-term oriented approach and every year retains part of the net profits; the aim here is to ensure more stability to the dividends in case of necessity. As of 2020, c. €7.0 million of net profits have been retained, representing €0.15 per share of potential extraordinary dividend or additional funds to finance potential extraordinary transactions
Guidelines on dividends
Create value for shareholders has always been a priority for Equita: the sustainable business makes such value creation possible and enables Equita to reach its objectives and remunerate adequately shareholders by distributing generous dividends. To date, Equita has not adopted any specific policy on the distribution of dividends.
The dividends distributed by Equita since the IPO
|Dividend Yield (DPS / Average yearly price)||8.3%||7.8%||7.8%||6.9%|
|Dividend Yield (DPS / Price the day before the ex-divided date)||n.d.||6.4%||6.8%||6.5%|
|Dividend per Share (DPS, €) (B/E)||0.20
(0.10 I tranche / 0.10 II tranche)
12 May 2021 (I tranche)
10 November 2021 (II tranche)
|10 June 2020||8 May 2019||9 May 2018|
10 May 2021 (I tranche)
8 November 2021 (II tranche)
|8 June 2020||6 May 2019||7 May 2018|
4 (I tranche)
5 (II tranche)
|Net Profits (€m) (A)||12.3||9.5||11.0||11.0|
|Total Dividend (€m) (B)||9.2||8.6||10.0||10.0|
|Payout ratio (%) (B/A)||75%||91%||91%||90%|
|N.o Total Shares (m) (C)||50.2||50.0||50.0||50.0|
|N.o Treasury Shares (m) (D)||4.1||4.5||4.5||4.5|
|N.ro Outstanding Shares (m) (E=C-D)||46.1||45,3||45.3||45.3|
|Retained earnings in the year (€) (A-B)||3.1||0.9||2.0*||1.0|
|Cumulated retained earnings (€m)||7.0||3.9*||3.0*||1.0|
|Retained earnings per share (€)||0.15||0.08||0.06||0.04|
* Including €1.0 million of Adjusted Net Profit 2018 to adjust the non recurring items linked to the IPO of Equita Group
Disclaimer: the Company has not announced any specific dividend policy. What stated above is a factual representation of what happened in the recent past and shows the ability of Equita to distribute dividends on a recurring basis.
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