Following an earlier trading update, FX risk management and international payments and collections company Alpha FX (LON:AFX) has released its Unaudited Interim Report for the six months ended 30 June 2022.

Financial Highlights

• Group H1 revenue up 35% to £46.1m including £1.4m of recharged interest (H1 2021: £34.2m including £0.2m recharged interest).
• FX Risk Management revenues up 31% to £32.3m (H1 2021: £24.7m).
• Alternative Banking Solutions revenues up 47% to £13.9m (H1 2021: £9.5m).
• Underlying H1 profit before tax up 16% to £18.0m (H1 2021: £15.4m).
• Reported H1 profit before tax up 16% to £17.8m (H1 2021: £15.3m).
• H1 profit before tax margin of 39% (FY 2021: 43%), reflecting increased investment in people and technology to capture the market opportunity.
• Deferred revenue from account fees, which will be recognised over the next 12 months, increased from £2.2m as at 31 Dec 2021 to £4.0m as at 30 June 2022.
• Basic earnings per share up 21% to 33.3p (H1 2021: 27.6p).
• Cash conversion remains strong, with adjusted net cash up 10% to £97.5m (FY 21: £88.2m).
• Proposed interim dividend of 3.4 pence per share (H1 2021: 3.0p).

Operational Highlights

• FX Risk Management client numbers increased 11% from 881 at 31 December 2021 to 975 at 30 June 2022.
• Alternative Banking Solutions accounts increased 75% from 1,746 at 31 December 2021 to 3,061 at 30 June 2022.
• 74 new heads were added during the period, taking total headcount to 288. This compared to 67 heads added in the whole year in 2021.
• Launch of a brand-new FX Risk Management client platform, marking the completion of a decentralisation programme.
• Corporate Milan office, launched in March 2022, is already profitable alongside other established divisions in London, Toronto and Amsterdam.
• Luxembourg and Australia offices progressing closer towards their official launches, with significant investment already made to set up regulatory licenses and office space.
• Proportionate step-change in an investment in people, infrastructure and technology reflecting a strong and growing market opportunity.
• Launch of new employee growth share schemes, taking the total number of employees with a long-term equity interest in the business to over 110.

Outlook

Alpha FX said it delivered H1 earnings in line with expectations, including unprecedented levels of investment focused on extending its long-term growth runway. As we enter the second half, trading remains strong across both FX Risk Management and Alternative Banking Solutions. The Board therefore intends to continue investing for growth in H2, and expects to comfortably meet management expectations on revenue and profit for FY22.

Morgan Tillbrook, Chief Executive Officer of Alpha FX commented:

“It is a privilege to report on another strong set of results, and I would like to thank our team for all their hard work in delivering this performance. Although much of the world is moving into a challenging macro environment, I have never felt more confident about the potential of the business and our long-term growth prospects. Our highly decentralised structure has helped us to evolve our business model and strategy in a way that is delivering significant competitive advantage and momentum whilst giving us the clarity and confidence to increase the rate at which we are investing for long-term growth. I am therefore confident we are in a strong position to sustain our company’s growth and returns in the long term, whilst continuing to deliver strong performance in the short term.”