Corporate currency hedging provider Alpha FX (AFX) is carving a niche within the industry. Rather than speculatively playing market movements to ramp up a client’s profits, Alpha FX focuses on achieving a balance between over- and under-hedging cash flows based on their business needs, says chief executive Morgan Tillbrook. The group only listed on Aim in April, raising £13m to give the group additional liquidity to back a growing forward book of currency trades.
Judging by this maiden set of results, Alpha FX is appealing to companies seeking to hedge their currency exposure. It secured 46 new clients during the period, taking its total to 269. Underlying operating profit also rose 84 per cent to £3.2m, helped by a subdued first-half last year as clients were reluctant to hedge prior to the referendum.
The average commission per trade also increased to 0.61 per cent, from 0.36 per cent during the same period in 2016. That was thanks to a higher proportion of forward trades – which attract a higher commission rate – as well as larger trades and a more favourable mix in the currencies traded.
Analysts at house broker Liberum expect pre-tax profit of £6.2m during the 12 months to the end of December 2017, giving EPS of 15.2p (from £4.3m and 10.5p in 2016).
| ALPHA FX (AFX) | ||||
| ORD PRICE: | 535p | MARKET VALUE: | £175m | |
| TOUCH: | 520-550p | 12-MONTH HIGH: | 570p | LOW: 217p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 60p | NET CASH: | £12m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016* | 3.31 | 1.72 | 5.1 | nil |
| 2017 | 6.29 | 2.38 | 6.3 | 1.5 |
| % change | +90 | +38 | +24 | - |
| Ex-div: | 14 Sep | |||
| Payment: | 13 Oct | |||
| *Pre-IPO figures | ||||
