Shares in foreign exchange risk management and alternative banking solutions provider Alpha FX (AFX:AIM) gained 3% to £16.10 after the firm said full year earnings would exceed market expectations.
Today’s upgrade follows an increase in guidance issued just over a month ago as trading remained strong through June.
Since that update, analysts have raised their earnings estimates by around 12% according to Refinitiv, with earnings per share now seen at 41.77p, an increase of 38% on 2020.
STRONG FIRST HALF
For the six months to 30 June, revenues increased by 89% year-on-year to £34 million as the number of clients jumped 11% to 838 with all divisions said to be profitable.
While acknowledging that uncertainties remain, the firm said the normalisation of international activity had continued into the first half of the year.
Consequently, the company believes the market opportunity and dynamics remain consistent with the environment pre-pandemic, with the exception of tourism and hospitality, which has been more than offset by other sectors.
INVESTING FOR GROWTH
After the successful opening of new offices in the Netherlands and Canada in the last year, the firm is sufficiently confident to make its next growth investment with the launch of a base in Milan later this year, subject to regulatory approval.
The alternative banking division launched a new technology platform in April, after which it achieved a ‘record-breaking’ month in both volumes of payments and subscriptions.
Growing revenues streams from alternative banking have increased the level of cash conversion and should help support future investments.
