Alpha Financial Markets Consulting PLC (AIM:AFM)’s share price was boosted on Wednesday by well-received interim results which prompted German bank Berenberg to increase profit forecasts and lift its price target to 530p.
Alpha's first-half numbers showed a remarkable acceleration in growth across all divisions and geographies, the bank's analysts said.
In the first six months of the year, Alpha's net fee income grew by 56.5%, with 45% organic growth, a 3% benefit from the annualisation of last year’s Lionpoint acquisition, and an 8% forex benefit exceeding both the bank’s and company’s previous forecasts.
“This is evidence of a business performing exceptionally well, proving both the strength of its structural drivers as well as our views on Alpha’s competitive advantage versus its larger competitors” the Beerenberg analysts said in a note to clients.
The star performer in the period was North America, they noted. Here, Alpha saw net fee income grow by 135% year-on-year, with 107% organic growth and 67% headcount growth compared with the prior year period.
Further down the P&L, adjusted EPS growth was up 43% year-on-year to 14.1p, already at the level the business achieved in the whole of full year 2020.
The only disappointment in the first half was on cash, with the group’s net cash position reducing from £63.5mln to £40.3mln, the analysts noted.
Full-year 2023 forecasts were raised by 10%. “This assumes 11.6% growth for the full year – a clearly conservative assumption given the group’s current momentum," the analysts said.
Berenberg repeated a 'buy' rating on Alpha shares which were trading 0.78% higher at 473.6p in afternoon trading.