Alpha FX revenue surges in first half

Currency risk management and alternative banking provider Alpha FX Group reported a 90% improvement in first half revenue on Wednesday, to £34.2m, supported by a “broad recovery” in client activity post-lockdown, and strong growth across all of its divisions.

The AIM-traded firm said underlying first half profit before tax was ahead 214% year-on-year to £15.4m for the six months ended 30 June, which it put down to the operational gearing of the business.

Reported profit before tax was up 225% at £15.3m, while its profit before tax margin improved to 45% from 27%, thanks to lower short-term travel, hiring and entertainment expenses.

Underlying basic earnings per share came in at 27.9p, compared to 9.5pa year earlier, with basic earnings per share rising to 27.6p from 8.9p.

The group said it was “well-capitalised” and debt free, with net assets of more than £98m, and £67m of own free cash on the balance sheet.

Cash conversion continued to be strong, supported by the growth of the alternative banking division.

The board proposed an interim dividend of 3.0p per share, up from the nil distribution it made for the first half of 2020.

On the operational front, Alpha FX said client numbers increased to 838 as at 30 June, from 754 at the end of December.

The company launched a new end-to-end platform to drive the scalability of its high-growth alternative banking offer, following “decentralisation” of its technology stack.

Its Milan office was set to open in the second half, subject to regulatory approval.

The board reported a “healthy outlook” as the economy emerged from the pandemic, with its market dynamics consistent with the pre-Covid environment, and with its addressable market opportunity expanding.

“Since our initial public offering in 2017, we have gone a long way to establish Alpha as a leading provider of FX risk management solutions, and our strategy to grow that reputation internationally continues to gain momentum,” said chief executive officer Morgan Tillbrook.

“Our movement into alternative banking in 2020 represented new, unchartered territory, and questions may therefore have been raised as to whether the success we have achieved as a high-quality, people-led FX consultancy could be replicated when it came to developing technology and products.

“Ultimately, I believe the results published today show that it can.”

Tillbrook said its decentralisation effort had played a “key part” in the firm’s progress, creating two “highly-focussed and agile” teams with defined strategies for growth.

“But when we take a step back, I believe our success to date comes down to a far simpler truth - whether it's providing a high-quality consultancy service or a high-quality technology offering, the common denominator is always the same - people.”

At 0851 BST, shares in Alpha FX Group were up 4.98% at 1,879.16p.