TIDMAFX
RNS Number : 2150T
Alpha FX Group PLC
21 July 2022
21 July 2022
Alpha FX Group plc
("Alpha", the "Company" or the "Group")
Trading Update
Alpha FX Group plc (AIM:AFX), a high-tech, high-touch provider
of FX risk management, accounts and payments solutions to
corporates and institutions internationally, today announces a
trading update for the six-month period ended 30 June 2022.
Key Highlights
-- H1 revenue increased by 35% to GBP46m (H1 2021: GBP34m),
including c. GBP1m of re-charged interest (1)
-- FX Risk Management revenues increased by over 30% against
H1 2021 to GBP32m
-- FX Risk Management client numbers (2) increased by 22%
against H1 2021 to 975 (H1 2021: 801, FY 2021: 881)
-- Alternative Banking revenues increased over 40% against
H1 2021 to GBP14m
-- Alternative Banking accounts (3) increased 239% against
H1 2021 to 3,061 (H1 2021: 904, FY 2021: 1,746)
-- Corporate Milan office, launched in March 2022, is already
profitable along with our other established divisions in
London, Toronto and Amsterdam
-- Continued significant investments into people and technology
to drive further expansion
-- Strong cash and liquidity position, with over GBP95m in
free cash
(1) Interest relates to the recharge of bank fees incurred by
the Group on Euro account balances which attract a negative
interest rate, with the cost being directly passed to the
client.
(2) Up until March 2022, client numbers were stated at Group
level and defined as 'clients that generated more than GBP10,000'.
Following the Group's decentralisation into FX Risk Management and
Alternative Banking, client numbers have been separated out and
redefined to provide a clearer picture of growth within each
division. For FX Risk Management - a client remains defined as a
company that generates more than GBP10,000 in revenue per annum for
the Group. For Alternative Banking - the Group reports on the
number of accounts that have been invoiced in the past 12
months.
(3) 'Account' refers to an account opened by clients to send,
hold and receive their funds (and that has been invoiced in the
past 12 months).
Overview
Trading across the Group has been strong into the first half,
with revenue increasing 35% to GBP46m on the same period last
year.
We have continued to grow both divisions alongside our planned
investments in headcount, technology and infrastructure. We added
74 new team members in the Front and Back Office primarily focused
on business development, client services and compliance. As a
result, overall headcount has increased from 214 to 288 in the
first half. Trading remains strong, and with a substantial
opportunity ahead, the Board expects to comfortably meet its
current expectations for the full year.
We look forward to providing a more comprehensive update on the
first half in the interim results statement, which the Group
expects to publish in September 2022.
Market Dynamics
Despite the inflationary pressures impacting businesses
worldwide, we continue to observe healthy markets, in line with
those of pre-Covid levels. Overall, our strong performance in the
period reflects our continued investment for long-term growth,
alongside the quality of our people, differentiated service
offering and, importantly, our highly diversified client base.
There continues to be no material impact experienced from the
Russia-Ukraine war or the macroeconomic volatility, nor does the
Group anticipate any material impact ahead.
FX Risk Management
Across our FX Management division our teams have performed very
strongly to grow the client base to 975 at 30 June 2022 (H1 2021:
801, FY 2021: 881) and deliver over 30% revenue growth against H1
2021 to GBP32m.
Our internal sales recruitment team also made excellent progress
during the period and contributed to 34 new Front Office hires.
Each new cohort ensures we continue to pave the way for long-term
sustainable growth, but in the medium term there is considerable
capacity for growth from within our existing team.
Our London office serves as the incubator for fostering our
strong culture and talent, enabling the establishment of further
expansion overseas. Our Milan office is testament to this: launched
in March 2022 by three well-proven Alpha individuals, the business
has grown quickly under their stewardship and has already become
profitable. We continue to focus on growing in new territories,
with offices in Luxembourg and Australia expected to be formally
established in due course following regulatory approval.
In May the planned launch of our upgraded client portal for FX
Risk Management went live. The portal benefits from an entirely new
client-facing suite, as well as several powerful enhancements. We
are excited about the value it adds to our offering and the
feedback from our client base has already been very positive. This
new launch is just the start of an ongoing roadmap of insight led
innovation; more new features are due to be released throughout the
year, each designed to deepen our differentiation, and add further
value to clients by improving the efficiency and effectiveness of
their currency management.
We continue to manage our growth in clients and revenue in a
measured way and remain focused on monitoring concentration risk
across an already well-diversified client base (full details of
which can be viewed on our website). Our strong cash and liquidity
position and robust credit control procedures enable us to
confidently grow our forward book in the current climate and
provide a competitive advantage over our peers.
Alternative Banking
Alternative Banking performed excellently in the first half,
with the Group experiencing significant demand for its global
accounts solution focused on the alternative investment sector.
Revenue grew over 40% against H1 to GBP14m, and the number of live
accounts invoiced grew to 3,061 by 30 June 2022 (H1 2021: 904, FY
2021: 1,746,) . Additionally, deferred revenue from account fees
which will be recognised over the next 12 months increased to
GBP4.0m as at 30 June 2022 (31 Dec 2021: GBP2.2m). (4) Following
significant ongoing investment into the Group's technology stack
and new hires within this division, the Group has further improved
its account onboarding times during the period in order to meet the
considerable demand seen so far this year for our purpose-built
solution, and we are pleased to report record account openings in
May and June as a result.
The decentralisation of the business, which was completed at the
start of 2021, has allowed the Alternative Banking division to
scale at the pace required. FX Risk Management and Alternative
Banking are two very different business models servicing two very
different needs, hence we built a custom-made solution for the
Alternative Investment industry with a proprietary technology
stack. Due to the complexity of the Alternative Investment
industry, it has been paramount that all of our systems are
front-to-back customised for the sector, and that this is supported
by dedicated teams in Compliance, Technology, Product, Client
Services and Sales. The significant investments made over the last
24 months have given us the right foundation from which to scale
and this investment will continue in response to the growing demand
for the product. As part of this, we have agreed a ten-year lease
on a new 20,000 sq ft office in Malta, which will allow us to
continue growing our Compliance, Client Services, and Technology
teams within the Alternative banking division. We are incredibly
excited by the quality of talent we have been able to hire since
launching inside the country at the start of 2021. The team in
Malta has already grown to 60 people by 30 June 2022, and based on
the current demand for the solution, is expected to grow to over
180 people over the next three years.
Morgan Tillbrook, Chief Executive Officer of Alpha FX said:
"I'm pleased to report on a strong period of trading for the
Group, with strong growth across both our divisions. Following the
decentralisation of our divisions, we have never been more
confident in their significant standalone potential. The enhanced
focus is enabling each division to better direct their resources
toward their distinct strategic priorities, in turn, creating more
value for all their stakeholders, and positioning them to build a
new era of innovation and growth."
(4) The Group typically receives most fees for its accounts
solution on set-up but recognises the revenues over a 12-month
period.
Enquiries:
Alpha FX Group plc via Alma PR
Morgan Tillbrook, Founder and CEO
Tim Kidd, CFO
Liberum Capital Limited Tel: +44 (0) 20
(Nominated Adviser and Sole Broker) 3100 2000
Neil Patel
Cameron Duncan
Kane Collings
Alma PR (Financial Public Relations) Tel: +44 (0) 20
3405 0205
Josh Royston
Andy Bryant
Kieran Breheny
Notes to Editors
Alpha is a high-tech, high-touch provider of enhanced financial
solutions dedicated to corporates and institutions operating
internationally. Working with over 900 clients across 50+
countries, we blend human capabilities with new technologies to
solve complex problems across three key areas: FX risk management,
global accounts and mass payments.
Key to our success is our team - over 200 people based across
five global offices, brought together by a high-performance culture
and a partnership structure that empowers them to act as owners of
our business.
Despite being an established business listed on the London Stock
Exchange, we remain relentlessly focused on maintaining the same
level of operational agility and client focus we had when we first
started in 2009. This dynamic, combined with the passion of our
people, have enabled us to make a substantial and enduring
difference to our clients, and deliver a growth story to match.
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END
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