Increasing sales headcount to expand internationally and investing in new technology may have helped push up sales by more than 50 per cent for Alpha FX (AFX) during the first half of 2018, but it was not without drawbacks. The underlying operating profit margin declined to 42 per cent, from 50 per cent at the same time last year. However, chief executive and founder Morgan Tillbrook insists the group is not “overstretching” itself and that management is focusing on longer-term growth rather “short-term earnings”.
Still, there is no doubt the company remains in growth mode. After relocating the head office to London in December, management continued to hire more multi-lingual sales staff as part of a push into Europe. The group – which provides currency hedging services to corporates and institutions – now operates in 10 European countries and is considering opening an office in Canada.
Analysts at house broker Liberum expect adjusted pre-tax profits of £8.3m, giving EPS of 20.9p (up from £6.7m and 17.5p in 2017).
| ALPHA FX (AFX) | ||||
| ORD PRICE: | 510p | MARKET VALUE: | £170m | |
| TOUCH: | 500-520p | 12-MONTH HIGH: | 595p | LOW: 415p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 72p | NET CASH: | £17.5m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 6.3 | 2.4 | 6.3 | 1.5 |
| 2018 | 9.7 | 3.9 | 9.2 | 1.9 |
| % change | +54 | +62 | +46 | +27 |
| Ex-div: | 13 Sep | |||
| Payment: | 12 Oct |
