Shares in foreign currency specialist Argentex (AGFX:AIM) gained 1.4% to 130p after it said in a full-year trading update to 31 March that revenues are expected to be £28.1 million, in line with expectations, as client trading surges back to pre-pandemic levels amid a more upbeat economic environment.
A significant improvement in second half trading means that revenues are expected to grow by around 8% to £16.4 million resulting in a slight fall for the full year, a credible performance given the 15% fall at the halfway mark.
Chief executive Harry Adams said, ‘We are seeing a resurgence in client trading to pre-pandemic levels following the deferral of client activity during the first half and we expect that trend to continue with the arrival of a more positive macro-economic environment.’
Crucially the firm said that bad debts levels remained at historically low levels, demonstrating a prudent approach to risk management and an increasingly diverse client base.
INVESTING FOR GROWTH
Over the year the company acquired a record 665 new corporate clients, an acceleration of the 449 added in 2019 while also investing in front and back office staff and moving to larger Covid-secure offices, providing ‘ample capacity’ to meet its growth targets.
Prior to the pandemic Argentex had targeted revenue growth in the 30%-to 35% with mid 30’s percentage operating margins. The highly experienced sales staff provide a client-led service and execution.
In a nod to Argentex’s future growth potential analyst James Hamilton at Numis said, ‘Its model is sales driven and the revenue progression of its new sales staff becomes increasingly strong over a five-to seven-year period.’
