Alpha FX Group PLC – Full Year results

Alpha FX (AIM: AFX), the UK-based foreign exchange service provider, is pleased to announce its audited Full Year Results for the year ended 31 December 2018.

Financial Highlights

• Revenue up 73% to £23.5m (2017 £13.5m)
• Underlying operating profit* up 48% to £10.0m (2017 £6.8m)
• Reported operating profit up 72% to £9.7m (2017 £5.6m)
• Underlying operating profit margin for the period of 43% (2017: 50%) and on a reported basis 41% (2017: 42%)
• Underlying basic earnings per share up 30% to 22.7p (2017: 17.5p) and on a reported basis 21.8p (2017: 14.2p)
• Final dividend of 4.6 pence per share, payable on 15 May 2019 to shareholders on the register as at 12 April 2019

Operational highlights

• 55% increase in client numbers, from 310 to 482
• Staff numbers increased from 51 to 82
• 51% of employees now Partners in the business***
• New headquarters secured at the Brunel Building in Paddington, which will be ready for occupation in Q3 2019
• Launch of institutional division, expanding our service offering to cover funds and institutions.
• New office opened in Toronto, focusing on the Canadian market
• Launch of international payments platform, Alpha Pay 

* Underlying excludes the impact of the one-off costs relating to the IPO and non-cash share-based payments.
** The Group exclude Training Accounts (those that have generated less than £10,000 in revenue since being onboarded) in order to provide a clearer picture of client retention for the purposes of these figures.
*** The Group defines a Partner as an employee who held an equity stake prior to the Company’s IPO; or is a participant in either the Group’s B or C growth share schemes; or owns shares directly in one of the Group’s trading subsidiaries. 

Outlook

Our strong performance to date demonstrates the appeal of our products and services in existing as well as new verticals and geographies.  We are presently barely scratching the surface of the Group’s potential, as our business volumes represent small proportions of every market in which we operate.  Our new verticals and geographies increase the potential size of our addressable market further still and we will continue to invest accordingly to take full advantage of our growing market opportunity.

Q1 has begun well and with the dedication and focus of the high-quality team in place, the Board looks forward to another year of continued progress in all areas of the business. 

Morgan Tillbrook, Chief Executive Officer of Alpha FX, commented:

“I’m very happy with the progress we have made during the year. As well as once again delivering strong revenue and profit growth, the impact of the investments made in the previous year highlight the strength of our strategy, and the returns that we are seeing give us great confidence for the future.”

Clive Kahn, Non-Executive Chairman of Alpha FX, added:

“Alpha’s success continues to be built on the passion, commitment and vision of its people, reinforced by the strength of its culture. On behalf of the Board, I would like to thank all our people for their contribution to Alpha’s success, and look forward to building on it in 2019.” 

Dividend

At the time of the IPO, the Board announced a target dividend policy of approximately 30% of the Group’s underlying profits after tax in each financial year. In line with this dividend policy and following the payment of the interim dividend of 1.9 pence per share in October 2018, the Board is pleased to declare a final dividend of 4.6 pence per share, equating to an annual payment of 6.5 pence per share (2017: 4.9p). Subject to shareholder approval, the final dividend will be payable to Shareholders on the register as at 12 April 2019 and will be paid on 15 May 2019.  The ex-dividend date is 11 April 2019.

Management believe there are numerous investment opportunities for the Group that will deliver significant and sustainable future return to shareholders. Accordingly, with effect from the start of the year ended 31 December 2019, the Group intends to adopt a progressive dividend policy, targeted at growing dividends each year, rather than basing a dividend paid on a fixed percentage of profits.