FairFX (FFX) has progressed ahead of schedule on its plans to improve margins within its corporate card business by rationalising the supply chain – a strategy noted within January’s trading update. Thanks to better financial terms secured with its supply-chain partners, the e-banking and international payments group says it will garner a greater share of revenues in future.
The shares were marked up on this news. But they have fallen since last September’s interims – and more steeply since the start of this calendar year.
The aforementioned trading update revealed that turnover (denoting the gross value of currency transactions sold, plus gross value of deposits into bank accounts) soared by 111 per cent to £2.36bn in 2018. The group expects to report adjusted cash profits of around £7.5m, up from £1m.
We also learnt that management expects 2019 to be “another year of significant growth”, notwithstanding Brexit uncertainty weighing on the pound. House broker Cenkos perceived a “more cautious outlook” and opted to “rebase” its forecasts. It lowered its adjusted pre-tax profit estimates for 2019 from £16.2m to £11.1m, with EPS down from 9.1p to 7p. For 2020, it revised its forecasts from £23.4m to £16.9m and from 12.3p to 9p.
