Depending on who you ask, the financial technology market is valued at anything from £150billion to £250billion. 

The range speaks volumes. Statistics are unreliable, definitions vary and it is hard to put a value on an industry that is immature and accident prone. 

Even the most ardent fans would admit that fintech, as it is known, has seen some high-profile disasters, Silicon Valley Bank being a case in point. 

Bureau de all change: Equals started out providing tourists with travel money, but found more lucrative work serving smaller businesses too

And despite years of rapid growth, very few operators actually make a profit. Equals Group is different. 

The firm is making money, expanding fast and expects to start paying dividends by the end of this year. 

The shares are £1.16 and should rise materially, as chief executive Ian Strafford-Taylor develops the business, adds customers and moves into new parts of the world.

Founded more than 16 years ago as FairFX, the group initially focused on providing consumers with travel money via pre-paid cards. Rates were invariably better than bank or Post Office deals and the business prospered

Competition intensified, however, so Strafford-Taylor decided to add another string to his bow – offering foreign exchange rate services to businesses, particularly entrepreneurial firms with anything from 50 to 500 employees. 

The decision proved a good one. Companies of this size feel increasingly unloved by High Street banks and are keen to shift their custom elsewhere. 

Traditional banks are often bogged down with legacy systems too, so transferring and receiving money from one country to another through them can be cumbersome and costly. Strafford-Taylor had none of these issues and, from the start, was determined to offer top service and excellent value, with better exchange rates, swift payments and expert advice when needed. Providing all this has been no mean feat. 

The company, renamed Equals in 2019, has obtained licences and regulatory approval across the world. That means customers can now do business in more than 100 currencies, opening secure accounts and completing transactions in minutes.

Payment cards are available too, a boon for firms involved in e-commerce. These cards can carry limits to ensure staff do not overspend on overseas trips. 

About 150,000 consumers still use FairFX cards but the firm is seeing most growth on the business front, attracting more than 30,000 firms in every line of work, from fashion to health to film production. Larger companies are also seeing the value in Equals’ offer. 

About 150 big businesses have signed up for at least one service and the numbers are rising rapidly. Interim figures last week showed a 43 per cent surge in turnover to £45million for the six months to the end of June compared with the same period in 2022, with pre-tax profits soaring from £900,000 to £5.8million. Prospects are good, so much so that Strafford-Taylor plans to pay a 1.5p maiden dividend for 2023, rising steadily thereafter. 

Brokers expect annual profits of £19.5million, up 65 per cent year-on-year, and rising to £23million in 2024, with a 2p dividend. Growth so far has been organic and via acquisition, and more deals are likely, allowing Strafford-Taylor to offer customers more services in more places quickly and efficiently.

MIDAS VERDICT: Equals Group is that rare beast – a cutting-edge financial technology firm that is expanding, profitable and about to pay dividends. At £1.16, the shares should deliver long-term growth. 

Trainline shares soared on Tuesday after the group revealed a £50million share buyback following better-than-anticipated growth in the first half.

The digital railcard platform’s net ticket sales increased by 23 per cent to £2.65billion for the six months ending August, while turnover rose by nearly a fifth to £197million.

Ticket purchases jumped to over £1.7billion in the firm’s UK consumer division as more customers booked online and on the day of travel.

Travelling far: Trainline announced a £50million share buyback programme on Thursday

It further benefited from passenger volumes regularly nearing pre-pandemic levels amid an absence of Covid-related restrictions and commuters travelling with greater frequency to the office.

This was despite workers from the RMT and Aslef unions staging strikes on multiple days as part of a long-running dispute over pay and conditions, costing the group around £5million to £6million in lost sales per day.

Outside Britain, ticket demand soared by approximately a quarter to £559million on the back of solid performances in Spain and Italy.

In recent years, trading in Italy has been supported by new advertising campaigns, while the company’s expansion in Spain has been spearheaded by the liberalisation of the country’s high-speed rail system.

Digital sales slowed overseas partly due to higher competition in keyword auctions, although demand continued to rise significantly on the company’s mobile app.

Jody Ford, chief executive of Trainline, said: ‘Given our continued growth and the strength and maturity of our business, we are today launching a share buyback programme to begin returning capital to shareholders.’

Trainline has maintained its guidance for both net ticket sales and turnover to expand by 13 to 22 per cent for the 2024 financial year. 

Meanwhile, adjusted core earnings are expected to total between 2.15 per cent and 2.25 per cent of net ticket sales.

Following the update, Trainline shares jumped 12.4 per cent, or 30.6p, to £2.78 on Thursday morning, making them the biggest riser by far on the FTSE 250 Index.

However, their value has still fallen by about 24 per cent over the past year.

Russ Mould, investment director at AJ Bell, said: ‘There remain limited barriers to entry in this market, but Trainline’s brand is becoming increasingly entrenched, which should provide it with a measure of protection from any prospective rivals.

‘The company continues to focus on innovative features like flagging cost savings through splitting your journey into multiple tickets that cost less in total than one ticket for the whole route.’

Ambitious: M&G boss Andrea Rossi

How should investors choose which shares to buy? Some look primarily for growth, delivered by rising share prices. Some seek out income, delivered by generous dividends. Most cast about for a blend of the two. The search can be tricky, particularly now when many companies are struggling to grow and offer lower income than top-ranking savings products.

M&G is different. The shares are trading at £1.91 and it is forecast to pay a dividend of 20.1p this year, putting the stock on a yield of 10.5 per cent. In most cases, such a yield would set alarm bells ringing. City types like their dividends to be fair to middling, with high yields prompting fears that either the dividend or the share price is heading for a fall.

But M&G is a main constituent of the FTSE 100 index of Britain’s largest listed companies. It is valued at almost £4.5 billion and chief executive Andrea Rossi is committed to increasing the dividend and driving profits growth. Brokers believe he can do both. Half-Swedish, half-Italian, Rossi was educated in France and has spent his career working around the world, collecting contacts along the way. Having taken the helm last October, he is already making a mark on the business.

M&G is, at heart, a savings and investments business, building on decades of experience to help customers earn attractive, long-term returns on their money. Founded in 1900 to finance urban public transport, the Municipal and General Securities Company evolved into an investment firm, launching the UK’s first unit trust in 1931. In 1999, M&G was acquired by Prudential but four years ago, the group split into two. Prudential became an emerging markets-focused insurance firm. M&G was left as an international asset management business with a UK savings division and a life assurance arm.

The demerger was underwhelming. From a starting price of £2.20 in October 2019, M&G shares had more than halved by March 2020 and, even though they have since recovered some composure, remain below their original price.

That should change. Rossi is energetic, ambitious and determined to ensure that M&G capitalises on its heritage and investment talents. The company has more than £300 billion under management, spanning every type of asset, from international bonds and equities to African micro-loans to Northern Gritstone, formed by the Universities of Leeds, Manchester and Sheffield to turn clever ideas into commercial businesses.

Traditionally focused on working with large institutional investors, M&G is keen to develop its wealth division, which offers products to individual savers, via financial advisers. Rossi is investing in technology to make this business work better and the firm also benefits from an expertise in bonds, sustainable investments and multi-asset products, all of which are in vogue right now.

M&G owns a sizeable life assurance and annuity subsidiary too. This has been closed to new business for several years but is about to reopen its doors.

Brokers expect the group to deliver robust growth under Rossi’s stewardship, with operating profits rising from £616 million this year to £729 million by 2026. Dividends should increase to 21.2p over the same time frame.

Midas verdict: The FTSE 100 index of Britain’s largest listed companies is forecast to deliver annual income of 4.1 per cent this year. At £1.91, M&G shares offer a yield of more than 10 per cent and the prospect of long-term growth. Buy and hold.

Traded on: Main market Ticker: MNG Contact: mandg.com or 020 7626 4588

Watches of Switzerland Group shares tumbled on Friday following news that Rolex had bought luxury retailer Bucherer.

The announcement of the acquisition left investors worried that Rolex is planning a long-term shift away from using authorised partners for retail sales to instead sell directly to wealthy shoppers.

Such a deal could make a massive dent in Watches of Switzerland’s trade, although the London-based company insisted the deal would not see a change to Rolex’s ‘processes of product allocation or distribution developments.’

Slump: Watches of Switzerland Group shares plummeted on Friday after watchmaker Rolex revealed it had bought luxury retailer Bucherer

Bucherer is a watch and jewellery retailer with more than 100 outlets worldwide, including seven in prime UK shopping destinations, such as Selfridges on Oxford Street and the Royal Opera House in Covent Garden.

Its relationship with Rolex goes back almost a century when Ernst Bucherer, son of founder Carl Friedrich, struck an agreement with Rolex co-founder Hans Wilsdorf for the company to become a major retail partner for the watchmaker.

Apart from selling Rolex and Tudor timepieces, the Lausanne-headquartered firm provides an after-sales service centre and watch repair workshops.

Rolex said Jorg G. Bucherer, nephew of Ernst and grandson of Carl Friedrich, has decided to sell the business for an undisclosed amount in order to found a charitable foundation.

It added the takeover was ‘the best solution not only for its own brands but also for all the watch and jewellery partner brands, as well as for all the employees of the Bucherer Group.’

According to Watches of Switzerland, Rolex bosses confirmed they were not making a ‘strategic move into retail’ and would have no ‘operational involvement’ in the Bucherer business.

But despite this reassurance, Watches of Switzerland Group shares plunged 20 per cent, or 140p, to 553.5p just before 3pm on Friday.

Russ Mould, investment director at AJ Bell, said: ‘There has been a trend among various product manufacturers, including the big trainer companies, to sell direct to the consumer.

‘In doing so, they learn more about customer preferences and make more margin as they can cut out the middleman for these direct sales.

‘Imagine that happening with Rolex. Theoretically, it could use Bucherer as its channel to sell and not have to bother with other authorised dealers such as Watches of Switzerland.’

The revelation of the Bucherer takeover comes about a fortnight after Watches of Switzerland reported a slight dip in summer sales following a weaker performance in the UK, where trade was impacted by the timing of product deliveries.

Chief executive Brian Duffy has also blamed the Government’s abolition of VAT-free shopping for driving away international tourists from Britain to other prominent European cities.

He has joined hundreds of other leading British business leaders in supporting the Daily Mail’s campaign for the ‘tourist tax’ to be overturned.

Shares in US chipmaker Nvidia hit an all-time high last night as it cashed in on the artificial intelligence (AI) boom taking Wall Street by storm.

The stock surged after it revealed a blockbuster second quarter – smashing expectations and showing that the AI craze was here to stay.

Nvidia has been one of the winners of the explosion of AI, with its chips playing a vital role in ChatGPT, which has shifted the tech from fringe topic to a household name.

In a bumper set of results on Wednesday night, Nvidia said revenues more than doubled to £10.6billion in the three months to the end of June, and would climb to £13billion in the current quarter, a rise of around 170 per cent compared to the same time last year.

The business also posted an 843 per cent jump in its quarterly profits to £4.9billion.

The figures sent the shares soaring more than 6 per cent in New York yesterday to over $500 apiece for the first time.

Although the gains eased throughout the day’s trading, the shares have more than tripled this year alone, adding £700billion to Nvidia’s value.

That is around the same as the six biggest companies on the FTSE 100 are worth combined – from AstraZeneca and HSBC to Shell and BP as well as Diageo and Unilever.

The meteoric growth has handed a windfall to Nvidia’s founder and chief executive Jensen Huang, whose own wealth has ballooned by as much as £25billion so far this year. He owns a 3.5 per cent stake, worth £33billion.

Founded in 1993, the story of the world’s most valuable chip maker started at a Silicon Valley diner, with Huang and two other engineers, Chris Malachowsky and Curtis Priem. Uncertain exactly what their business would look like, their initial strategy was to place early bets on markets that barely existed at the time, starting out with PC gaming and graphics processing.

This proved a major success, with their graphics processing unit now essential in the world of gaming in popular titles such as Call of Duty.

It also enjoyed some hype during the launch of the ‘metaverse’, the virtual reality pushed by Facebook founder Mark Zuckerberg when he rebranded the company as Meta in 2021.

But its most recent bet in the world of AI has proved its most lucrative, making it the first semiconductor company to rack up a $1trillion market valuation in May.

It now means Nvidia, whose market cap is around $1.2trillion (£950m), is now a firm member of the ‘Magnificent Seven’ alongside fellow American corporate giants Alphabet, Amazon, Apple, Meta, Microsoft and Tesla.

And analysts are confident that its spot in this elite club will not be short-lived.

Dan Ives, tech analyst at Wedbush Securities, said: ‘Nvidia’s guidance was a ‘drop the mic’ moment as investors now recognise this AI demand story is as real as any tech trend we have seen in the last 30 years. It is only comparable to the internet in 1995 and Apple’s iPhone launch in 2007.’

Danni Hewson, head of financial analysis at AJ Bell, said: ‘Confidence is a funny thing. Without it markets limp along as investors shun risk and double down on perceived safe havens. With it sectors soar, and that’s exactly what happened after Nvidia proved the AI phenomena is no flash in the pan.’

But it’s not just analysts who are bullish about Nvidia.

Windfall: Nvidia’s founder and chief executive Jensen Huang

‘A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,’ said Huang, who is known for his black leather jackets and a tattoo that looks like the Nvidia logo.

‘We have excellent visibility through the year and into next year,’ he added. ‘I think this is not a near-term thing, this is a long-term industry transition.’

And to truly underline this point, the company has said that it would buy back another £20billion of its shares, a move most firms make when leadership thinks the company is undervalued.

The company said it to ramp up production of its hardware into next year, appearing to silence doubts about whether this diner coffee-fuelled, start-up turned chip giant will keep growing.

Scientists have devised a list of risk factors for dementia and developed a tool which can ‘strongly predict’ whether a person will develop the condition in the next 14 years.

Experts from the University of Oxford devised a list of 11 factors that were found to assess with good accuracy whether or not middle-aged people would go on the develop the condition.

They examined data on more than 200,000 people aged 50 to 73 taking part in two major long-term British studies.

Researchers compiled a list of 28 known factors linked to dementia risk and then whittled them down to the strongest 11 predictors.

The factors include age, education, a history of diabetes, a history of depression, a history of stroke, parental history of dementia, levels of deprivation, high blood pressure, high cholesterol, living alone and being male.

Scientists have devised a list of risk factors for developing  dementia later in life and one of them is living alone (stock photo)

The team also examined these risk factors alongside whether or not people carried a specific gene – the APOE gene – which is also linked to dementia.

Combined, these were used to develop the UK Biobank Dementia Risk Score (UKBDRS) – APOE tool.

They discovered the tool produced the highest predictive score for people who went on to develop dementia over the 14-year course of the study.

For example an older male with a history of diabetes, who lives alone, has high blood pressure and the APOE gene, would have a higher risk score compared to a younger woman with none of the other risk factors listed.

The authors said the assessment ‘significantly outperforms’ similar other risk assessment tools currently available.

As well as identifying those at risk, these tools can also highlight preventative measures people can take while it is still possible.

The academics point out previous work which suggests that up to 40 per cent of dementia cases could be prevented through modifying certain lifestyle factors including stopping smoking, reducing high blood pressure, losing weight and reducing alcohol intake.

They suggest that the new tool could, in the future, be used as an initial screening tool for dementia to put people in ‘risk groups’.

Those who come back with a high probability of developing dementia, according to the risk score, could be prioritised for further tests including cognitive assessments, brain scans and blood tests.

Associate professor Sana Suri, co-lead author from the University of Oxford, said: ‘It’s important to remember that this risk score only tells us about our chances of developing dementia; it doesn’t represent a definitive outcome.

‘The importance of each risk factor varies and given that some of the factors included in the score can be modified or treated, there are things we can all do to help reduce our risk of dementia.

‘While older age – 60 and above – and APOE confer the greatest risk, modifiable factors, such as diabetes, depression, and high blood pressure also have a key role.

‘For example, the estimated risk for a person with all of these will be approximately three times higher than that of a person of the same age who doesn’t have any.’

The Rimac Nevera is the fastest electric car in the world, capable of reaching 258mph with a 0-60 record of just 1.74 seconds. Exceptionally exclusive, production is limited to just 150 models, each of which costs around £2.4 million.

Rimac is based in Croatia, shareholders include Porsche and Hyundai and the group is known throughout the world for its electrical vehicle expertise. But a key component of the Rimac Nevera comes from Equipmake, an engineering firm based in Snetterton, Norfolk.

Equipmake was founded in 1997 by former Formula One engineer Ian Foley. Initially a consultancy, the company began delving into the world of hybrid and electric vehi-cles more than 15 years ago and has been honing its expertise ever since.

Fast mover: Equipmake builds electric motors for buses, emergency vehicles and the fastest electric car, the Rimac Nevera, at its factory in Norfolk

From the start, Foley realised that a small business like Equipmake could not compete in the high-volume electric car market. Instead, he chose to focus on more specialist areas, such as buses, emergency vehicles and the occasional motor for millionaires and speed freaks.

The decision paid off. Today, Equipmake supplies two of the UK’s biggest bus groups, First Bus, which has a fleet of almost 6,500 vehicles, and Go Ahead, which operates nearly a quarter of London’s bus routes. 

Foley also works with leading fire and rescue firm Emergency One and Wisconsin-based REV Group, a top fire engine maker in America.

Equipmake is also involved in developing the first commercial electric aeroplane, scheduled to be on sale from 2025 and already attracting significant interest from airlines.

The company listed on the Aquis Exchange in July 2022, the shares are 9.5p and should accelerate as Foley pursues his plans for growth.

Making the parts that power an electric vehicle is complicated and many firms focus on one or two elements. Equipmake is different. Not only can the group supply individual components but it can also design and make everything that allows an electric vehicle to operate, from chassis to motors to chargers.

Some customers want the lot. Others pick and mix. In every case, however, Foley and his team aim to combine high-performance with affordability. Progress was slow in the early days, as traditional manufacturers wrestled with the idea of moving from combustion engines to electric power.

In recent years, however, momentum has gathered pace, with firms from across the world calling on Equipmake for its experience and expertise.

At home, bus makers are asking Foley to produce new electric motors and retrofit older models with more environmentally friendly alternatives. Fire engines are being converted to electric motors with Equipmake’s help. And aircraft groups are tasking the firm with developing efficient take-off and landing systems.

Overseas, US firms are looking at REV Group’s progress and thinking of following suit, especially given government subsidies for green technology.

Equipmake has a customer in India too, Sona Comstar, which specialises in electric components and works for vehicle makers across the world. Demand is such that the Norfolk group recently opened a second plant, quadrupling capacity to more than 65,000 square feet, a move that will allow Foley to increase production severalfold over the next couple of years.

Brokers expect swift progress too. Revenues of £5.1 million are forecast for the year to May 31 2023, rising to £13.4 million in the current year and £24 million in 2024/25. Equipmake is loss-making at the moment, as all spare cash is ploughed back into the business but profits are expected from 2026, rising steadily from that year.

Environmental agendas are pervasive, with governments across the globe committed to achieving net zero carbon by 2050. None of those commitments will be possible without eco-friendly transport and Equipmake is at the centre of these endeavours.

Over time, therefore, the firm should become materially larger and more profitable.

The group is already a leading player on the Aquis Exchange, where shares can be traded in a similar way to the main market or AIM. Foley has no imminent plans to move to the London Stock Exchange but he runs Equipmake as if he were already listed on one of the larger markets.

Midas verdict: Equipmake is a ground-breaking business in a fast-moving industry. The shares are 9.5p and should go far. Buy and watch this British pioneer motor.

Traded on: Aquis Ticker: EQUIP Contact: equipmake.co.uk or 01953 661200

Watching brief: H&T is the largest pawnbroker in the UK

In 1897, Walter Harvey and Charles Thompson opened a pawnbroking store in Vauxhall, South-West London. Today, H&T is the largest pawnbroker in the UK, with 273 outlets and a thriving jewellery business too.

Last week, chief executive Chris Gillespie unveiled a 31 per cent increase in pre-tax profits to £8.8 million for the six months to June 30 and expressed confidence in the future, with a 30 per cent rise in the interim dividend to 6.5p.

Pawnbroking was once considered a rather shady business, with ill-lit shops charging exorbitant rates to hapless customers. H&T strives to suppress that kind of image. Stores are bright, staff are friendly and interest rates range from 2 per cent to 10 per cent a month.

Most loans are for around £200 and repaid within three months, with customers ranging from individuals to small business owners.

Customer numbers are rising.Many households are struggling to make ends meet, few firms are willing to lend small sums of money to hard-pressed consumers and some people actively prefer to use pawnbrokers for their borrowing needs.A growing number of businesses also turn to H&T for short-term loans when cashflow is an issue and bills need to be paid.

Contracts are for up to six months and the vast majority of customers – 85 per cent – repay their loans early and retrieve their belongings, generally gold jewellery or watches. H&T makes an effort with customers in trouble but some do end up parting with their items for ever. Others are keen to sell from the start and H&T can be a willing buyer if products meet the group’s specifications. These goods are then displayed for sale, alongside brand-new jewellery and watches. Once, most self-respecting consumers would not dream of rummaging in pawn shops for coveted gold wares.

Today, the tide is turning, as eco-conscious millennials actively opt for ‘pre-loved’ goods because their carbon footprint is lower. This has prompted a surge in demand for H&T second-hand jewellery and watches, which now account for more than 80 per cent of retail sales, almost £19 million in the first six months of 2023 alone.

With small loans in limited supply and demand for old jewellery on the rise, H&T prospects are bright. Midas recommended the company in 2017, when there were 181 stores and the shares were £2.70. Today, store numbers are up by almost 50 per cent and the shares have surged to £4.15, with most brokers expecting further progress ahead.

Profits of £29.5 million are forecast for 2023, a 55 per cent increase over last year. A dividend of 21.5p has been pencilled in for the current year, rising to 28p in 2024. Gillespie is also hoping to maintain an energetic store-opening programme, taking the group to 350 sites in the next few years.

Midas verdict: H&T has delivered impressive growth and the shares have responded, rising 54 per cent since 2017. Existing shareholders may choose to bank some profits at current levels but they should not sell out completely. Pawnbroking is in growth mode and H&T is not just the biggest operator in the country but also one of the best. A strong long-term bet.

Traded on: AIM Ticker: HAT Contact: handt.co.uk or 0800 838 973