Proactive Investors - Run By Investors For Investors
Why invest in FFX?
FairFX Group Plc: THE INVESTMENT CASE
INVESTMENT OVERVIEW

FairFX steams ahead as transaction values edge past £1bn in first half of 2018

A number of key acquisitions and new products have attracted a raft of new customers towards the firm's platform as it seeks to challenge established forex providers
International currencies in bundles
INVESTMENT OVERVIEW: FFX The Big Picture
The company offers travel money, international transfer, and digital banking services

FairFX Group Plc (LON:FFX), a travel money, international transfer and digital banking provider, has started to post some big numbers.

The AIM-listed group has reported that its turnover for the first half of its financial year (i.e. the gross value of currency transactions and bank deposits through its platforms) rose 146% at £1.1bn.

That was boosted substantially by the acquisition of City Forex but on a like-for-like (LFL) basis, turnover for the period was up 23% to £532.9mln while turnover for prepaid cards and international payments rose 9% to £182mln and 39% to £335mln respectively.

Much like other challenger banks such as Monzo and Atom Bank, FairFX is cutting out the traditional framework of branches and intermediaries in order to maintain competitive rates and increase convenience for its customers.

And the strategy seems to be paying off, with more than three-quarters of a million customers now signed up and growing by over 25,000 per quarter.

Like most payment companies, FairFX charges a fee for transactions made across its platforms which then feeds into its revenue stream.

FairFX’s house broker Cenkos Securities expects revenues for 2018 of £28.7mln, up from £15.5mln in 2017, while underlying earnings (EBITDA) are forecast to grow to £8.3mln from £1mln last year.

The strong performance has also been reflected in the share price, which has increased by around 81% since the start of the year to 142.5p.

City Forex acquisition starts to pay off

Underpinning this transformation has been a strong of acquisitions, the latest of which was international payments provider City Forex, bought in February.

International payments turnover rose by 28% as a consequence, with cross-selling opportunities between its retail card and travel money branches also getting a leg up.

In addition to the financial benefits, FairFX’s chairman John Pearson said City Forex was improving the efficiency after the platform was successfully migrated at the beginning of May.

Fair Everywhere targets global businesses

FairFX is also targeting the international business market with its Fair Everywhere account launched in June.

The account allows business customers to manage all day-to-day business banking and international money transfers in one place with balances in sterling, euros and US dollars, as well as 3.5% cashback rewards at selected UK retailers for account users.

More generally, the group’s international payments division has reported YOY growth of 28.3%, with its corporate card platform reporting YOY user growth of the same figure, with the firm saying the platform now forms a “key pillar” of its SME customer base.

The company has also started to issue its own Mastercard branded cards alongside its online business loan services, a move it says will reduce costs and enhance its product suite across the board.

A commercial finance facility is also being launched in collaboration with Alternative Business Funding, which connects customers with appropriate and properly regulated lenders.

FairFX’s head of banking, Adam Rigler, has said the facility is a direct response to requests from business customers as, for SMEs, obtaining funds from traditional lenders can be “difficult and time-consuming”.

View full FFX profile View Profile

FairFX Group Plc Timeline

Related Articles

APQ
November 20 2018
The dividend remains well covered by economic income in the portfolio.
cryptocurrency tokens
October 02 2018
Since launching its advisory service arm last year, the company has already helped raise over US$500mln in token sales
International currencies in bundles
September 04 2018
A number of key acquisitions and new products have attracted a raft of new customers towards the firm's platform as it seeks to challenge established forex providers

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use