In today’s parlance, the technology-powered hedging fixes Alpha FX (AFX) provides probably make the Aim-listed group a ‘fintech’. But the key driver of growth is resolutely old-fashioned: how many corporates can the group’s sales team win from the bank-dominated incumbent providers.
On this front, the half-year to June was weaker than usual. Client numbers – defined as customers who have generated at least £10,000 in revenue to date – ticked up 23 to 671, having risen by 83 in the first six months of 2019.
Inevitably, you-know-what contributed to the general slow-down, as the pandemic forced corporate treasuries to put off hedging decisions in the second quarter. And though all staff transitioned to remote working, chief executive Morgan Tillbrook told us this affected his fast-expanding and relatively junior sales team more than most staff.
Expecting this group to develop from afar would have been “like teaching a lion cub to hunt by watching TV” added Mr Tilbrook, which perhaps explains why they were reportedly keen to return to the office as soon as they could. Recent evidence – a record current quarter for client volumes after just two months – suggests a face-to-face workplace might well have been the missing ingredient.
Analysts at Liberum forecast adjusted earnings of 26.4p per share this year, rising to 32.6p in FY2021.
| ALPHA FX (AFX) | ||||
| ORD PRICE: | 928p | MARKET VALUE: | £372m | |
| TOUCH: | 910-930p | 12-MONTH HIGH: | 1,370p | LOW: 465p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 39 | |
| NET ASSET VALUE: | 194p | NET CASH: | £113m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 15.6 | 6.28 | 12.9 | 2.2 |
| 2020 | 18.0 | 4.71 | 8.9 | nil |
| % change | +16 | -25 | -31 | - |
| Ex-div: | n/a | |||
| Payment: | n/a |
