Alpha FX Group plc (AIM: AFX), a foreign exchange and payments specialist working for corporates and institutions internationally, today announces a trading update for the year ended 31 December 2019.
Following the last trading update on 17 October 2019, trading has continued to be strong, with revenues for the FY expected to exceed £35m and pre-tax profit margin also slightly ahead of expectations despite continued investments made throughout the year.
These results come off the back of another strong performance from our core corporate and institutional divisions, across both UK and European markets (serviced from our London office). Client numbers[1] subsequently increased during the year by 34% from 482 to 648, whilst the number of countries in which Alpha services clients also grew, further extending the Group’s runway for growth and validating the investment in recruiting bi-lingual speakers over the past two years.
Heightened levels of uncertainty around the 2019 General Election and Brexit have naturally made foreign exchange an increased topic of conversation, however we do not believe this has had a material impact on our performance. Fundamentally, this is because we remain focused on promoting a structured and formalised approach to currency risk management – one where clients buy currency in line with a pre-agreed strategy, rather than in response to isolated macro conditions.
Pleasingly, both Alpha FX Canada (launched in October 2018) and Alpha Payment Solutions (launched in December 2018) also continue to build momentum. Alpha FX Canada grew revenues consecutively in each quarter during the year and is well placed to contribute to the Group’s profit in 2020. Alpha Payment Solutions performed in line with expectations and, whilst it still remains in the early stages of growth, with a clear strategy and strong leadership team established, we are confident it is on track to become a meaningful contributor of earnings in the medium-term.
As previously highlighted, the Group has maintained strong profitability despite ongoing investments, both in the core business and its more recently established divisions. Investment in 2019 included our move to new permanent headquarters in Paddington, which as expected, has enabled us to accelerate recruitment in the latter half of the year by providing us the space to attract more high-calibre individuals who share our cultural values. Consequently, Front Office headcount grew from 51 to 74, whilst Back Office grew from 31 to 50.
Whilst the increase in Front Office headcount will support further client acquisition in the medium to long-term, as expected, the contributions from new hires has been minimal as they remain in the early stages of their learning curve[2]. The results in 2019 are therefore testament to the quality of our more mature hires and their ability to develop further along the learning curve. Equally, with further strong hires during the year, we are excited about the growth potential this cohort can bring to the business in 2020 and beyond, as they also mature.
In Back Office, the acceleration in hires (versus prior years) was coordinated to support the development of Alpha Payment Solutions and further enhance the Group’s overall technology stack. Importantly, the technology being built by Alpha Payment Solutions provides benefits to the wider group as a whole, in the form of greater automation, resilience and scalability, all of which should support the Group in retaining its highly efficient operating model long into the future.
Ultimately, Alpha’s growth and investments to date are once again the by-product of our desire to build a company with a sustainable and long-term growth story – one that our investors, employees and clients will benefit from long into the future. We thank all of our stakeholders for their continued support and now look forward to publishing final results for the year ended 31 December 2019, in March 2020.
alpha-fx-group