When asked to explain Alpha FX’s (AFX) economic moats, chief operating officer Henry Lisney says the group possesses “the technology of a fintech, and the sales team of a broker”. Whether the platforms Alpha provides to help corporates manage their currency risk constitute true proprietary technology is hard to say, although half-year figures suggest Mr Lisney’s sales team appears to be pushing on an open door.
That may be of little surprise. So far in 2019, the pound has whipsawed with the cacophony of events from Westminster, while the dollar, renminbi and euro have all proved volatile ships on the waves of geopolitics and global recession fears. But the 17 per cent rise in client numbers to 565 is nonetheless striking, particularly when you consider the growth in Alpha's London-based staff numbers was held back ahead of last month’s move to permanent headquarters.
Despite this investment, a new office in Canada and the launch of remittance service Alpha Pay, the operating margin held firm at 43 per cent, as revenue per client picked up.
Liberum, whose forecasts finance director Tim Kidd described as “always very conservative”, expects earnings of 26.1p a share this year, rising to 31.4p in 2020.
| ALPHA FX (AFX) | ||||
| ORD PRICE: | 780p | MARKET VALUE: | £290m | |
| TOUCH: | 760-800p | 12-MONTH HIGH: | 850p | LOW: 492p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 136p | NET CASH: | £62.5m* | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 9.7 | 3.9 | 9.2 | 1.9 |
| 2019 | 15.6 | 6.3 | 12.9 | 2.2 |
| % change | +60 | +63 | +40 | +16 |
| Ex-div: | 12 Sep | |||
| Payment: | 11 Oct | |||
| *Excludes lease liabilities of £7.8m | ||||
