Alpha FX reports revenue up 31% in 2020 to £46.2M
FX risk management and payment solutions company Alpha FX Group plc (LON:AFX) has announced its audited Full Year results for the year ended 31 December 2020.
Financial Highlights
· Group revenue up 31% to £46.2m (2019 £35.4m)
· Underlying profit before tax up 20% to £17.5m (2019 £14.6m)
· Reported profit before tax up 27% to £17.1m (2019 £13.5m)
· Underlying profit before tax margin of 38% (2019 41%)
· Basic earnings per share up 15% to 31.7p (2019 27.7p) and on an underlying basis 32.8p (2019: 30.1p)
· Final dividend of 8.0 pence per share, payable on 14 May 2021 to shareholders on the register as at 16 April 2021
Operational highlights
· 16% increase in client numbers, from 648 to 754
· Average revenue per client grew by 12%
· 32% increase in average employee headcount, from 102 to 135
· 44% of employees hold a long-term equity interest in the business
· Solid cash position and debt free with £91m net assets and £52m in free cash
· Cash conversion of 100%, excluding the impact of our Norwegian client (2019 72%)
· Canadian office launched in 2018 now profitable for the full year
· Alpha Platform Solutions launched in 2018 now profitable and grew year on year revenues by over 600%
Regarding the outlook for 2021, Alpha FX stated that the success of its investments to date has ensured that the market opportunity for Alpha remains strong, with its business resilient, even under the most testing conditions.
Whilst COVID-19 provides a continuing cause for caution across the world, the Group said it has made an excellent start to the year. Subsequently, the Board remains optimistic that, providing the situation under COVID-19 does not deteriorate, the Group is on track to deliver another strong year of growth.
Morgan Tillbrook, Chief Executive Officer of Alpha FX, commented:
“For many companies across the world, 2020 has represented their greatest challenge to date, and Alpha was no different. However, what I witnessed last year was a team that grew more ambitious, more determined and more connected with every challenge that was thrown at them. The result that the market will see today was another year of consecutive growth across all divisions, and I am naturally delighted with this. However, I believe the long-term benefits for our team and culture, having overcome this experience together, will prove far more valuable still.”
ALpha FX stated that 2020 was another strong year of growth for the business, despite the impact of COVID-19, with revenue for the year increasing by 31% to £46.2m.
The FX Risk Management division of Alpha FX focuses on supporting corporates and institutions that trade currency for commercial purposes through the Group’s sales teams located in London, Canada and Amsterdam. Despite a slowing of growth in the first half of the year as clients assessed the impact of the pandemic upon their business needs, revenue for the division for the full year grew by 18%.
The Alternative Banking division focuses on providing corporates and institutions with a suite of alternative banking solutions covering payments, collections and accounts across the UK, Europe and Canada. The service is primarily offered by Alpha Platform Solutions (formerly Alpha Payment Solutions), a division of Alpha FX Limited. In addition, Alpha Platform Solutions also services some FX Risk Management clients benefiting from cross-selling opportunities from the corporate and institutional sales teams. The Alternative Banking division saw a £4.8m increase in revenue in the year to £6.0m.
During the year the Group continued to invest, with average headcount increasing by 33 to 135 and the establishment of a sales office in The Netherlands. Costs also included the impact of Brexit-planning and the full-year impact of the move to the new Head Office in Paddington. Despite this, profit before tax in the year grew by 27% to £17.1m. Underlying profit is presented in the income statement to allow a better understanding of the Group’s financial performance on a comparable basis from year to year. The underlying profit excludes the impact of share-based payments, and in the year ended 31 December 2019 also excludes one-off property-related costs. On this basis, the underlying profit before tax in the year increased by 20% to £17.5m.
In April 2020 the Group announced that it had completed a share placing by the issue of 2,941,177 new shares raising £19.2m after expenses. The proceeds have been used to continue investment in new products and markets including Alpha Platform Solutions, Canada and The Netherlands, as well as provide the capital base to acquire new clients.