Alpha FX posts solid revenue, earnings growth

(Sharecast News) - Currency risk management and alternative banking provider Alpha FX reported a 31% rise in group revenue in its full-year results on Wednesday, to £46.2m.
The AIM-traded firm said its underlying profit before tax grew by 20% in the year ended 31 December, to £17.5m, while its reported profit before tax improved 27% to £17.1m.

It said its underlying profit before tax margin was 38% in 2020, down from 41% in 2019.

Basic earnings per share were 15% higher at 31.7p, and on an underlying basis they came in at 32.8p per share.

The board declared a final dividend of 8p per share, payable on 14 May to shareholders on the register as at 16 April.

On the operational front, Alpha FX reported a 16% increase in client numbers to 754, as average revenue per client grew by 12%.

Its average employee headcount was up 32% during the year, to 135 at year-end, with 44% of employees holding a long-term equity interest in the business.

Alpha FX said it was in a "solid" cash position, and was debt-free, with £91m in net assets and £52m in free cash.

Cash conversion was 100%, excluding the impact of the company's Norwegian client, rising from 72% in 2019.

The company's Canadian office, established in 2018, was now profitable for the full year, while Alpha Platform Solutions, also launched in 2018, was now profitable, with year-on-year revenue growth of over 600%.

Looking ahead, Alpha FX's board said the success of the company's investments to date had ensured that its market opportunity remained "strong" and its business resilient, even under the "most testing" conditions.

It said that, while the Covid-19 pandemic provided a continuing cause for caution globally, the group had made an "excellent" start to the year.

As a result, the board said it remained optimistic that, provided the Covid-19 situation did not deteriorate, the company was on track to deliver another strong year of growth.

"For many companies across the world, 2020 has represented their greatest challenge to date, and Alpha was no different," said chief executive officer Morgan Tillbrook.

"However, what I witnessed last year was a team that grew more ambitious, more determined and more connected with every challenge that was thrown at them."

Tillbrook said the result was another year of consecutive growth across all divisions.

"However, I believe the long-term benefits for our team and culture, having overcome this experience together, will prove far more valuable still."

At 0830 GMT, shares in Alpha FX Group were down 0.93% at 1,382p.