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Argentex builds client base amid market turmoil

The FX broker has delivered pleasing maiden full-year returns
August 3, 2020

It is probably not a bad time to be nipping at the heels of the banks.

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Maiden full-year figures for Argentex (AGFX) revealed that revenues increased by almost a third to £28.9m in 2019, on a 12 per cent rise in foreign exchange (FX) turnover – this was based on a rough 50:50 split between spot and forward trades.

Operating profits increased by 28 per cent to £12.5m once listing costs and pre-IPO related LLP equity-based remuneration are taken into consideration.

More importantly, the FX broker has continued to attract active institutional clients, up 12 per cent to 1,212, while benefiting from a high proportion of recurring revenues.

Administration costs as a proportion of revenues ratcheted up slightly through the year, and we anticipate additional costs linked to a change of business premises and increased headcount. But central costs are far from burdensome. Business operations have been self-funding right from the off.

Turmoil in financial markets in the early part of the year had limited effect beyond effectively bringing some hedging positions forward, as institutional clients scrambled to shore up their currency exposure.    

Looking ahead, Argentex is set to gradually Increase its FX options beyond its primary portfolio composition of dollar, sterling, or euro trades, conceivably resulting in a more diversified revenue stream. Staff numbers are on the rise, facilitated by the move into new premises, though it is worth mentioning that the company achieved a 24-hour turnaround when lockdown was implemented.