Shares in foreign exchange (FX) broker Argentex (AGFX:AIM) soared after it reported a 30% jump in revenue to £29m, around 3% higher than analysts’ expectations, in a trading statement for the year to 31 March.
The shares rose 17.5% to 117p, in part due to relief the firm didn’t report an increase in bad debts unlike fellow peer foreign exchange broker Alpha FX (AFX:AIM) which warned on Monday.
STRONG CLIENT GROWTH
The company continues to see very strong customer growth with 450 new corporate clients coming on-board over the year.
Customer trading activity also increased by 15%, and these two factors drove a 12% growth in FX volumes handled by the firm to £21.9bn.
Importantly, despite the growth in new business, rigorous operational procedures and risk controls resulted in no change to the ‘historically low levels of bad debt’ being reported.
Despite increased client demand, the number of currencies traded remained consistent with historical trends with 95% of trading done in the major FX crosses, including US dollar, Euro and Sterling.
CORONAVIRUS
Co-chief executives Harry Adams and Carl Jani commented, ‘While it is too early to ascertain the full ramifications of COVID-19 on markets and corporates alike, the group's high quality, credit worthy client base, risk framework and disciplined liquidity management positions the group well in pursuit of its long-term growth objectives.’
The firm has successfully implemented its business continuity plan with all employees working from home.
