Whether by design or chance, three foreign exchange and payment specialists reported their half-year results on Wednesday garnering very different responses.

Alpha International (ALPH:AIM) and Argentex (AGFX:AIM) saw their share prices drop 6% and 11% respectively while Cab Payments Holdings (CABP), which floated on the main market in July, got a better reception with the shares gaining 6% to 278.9p.

The divergent market moves reflect cautious comments in relation to corporate activity and full-year expectations from Alpha and Argentex while Cab Payments said industry dynamics continued to be supportive.

STRONG HALF BUT SIGNS OF SOFTNESS

Alpha International, the largest of the three firms by market cap, delivered revenue growth of 25% to £55 million and underlying pre-tax profit growth of 9% to £19.6 million in the six months to June reflecting increased investment in the cost base. Although their profit measure excluded £32 million of interest income.

The largest division, foreign exchange risk management, saw a 12% increase in client numbers and 6% growth in average revenue per client driving 21% growth in income to £39 million. 

The company said higher borrowing costs and macro uncertainty had caused corporates to take ‘a more short-term and conservative approach’, leading to reduced appetite for foreign exchange hedging.

Argentex delivered first half revenue growth of 28% to £25 million and adjusted operating profit growth of 13% to £5.4 million, also reflecting increased investment.

The number of clients grew 8% to 1,493, while average revenue per client was up 18%.

The company said while its core UK corporate currency management business remained resilient, the Institutional and European divisions had ‘recently experienced a greater season reduction in market activity.’

Looking forward, the company is focused on its strategy to develop an increasingly diversified business underpinned by new higher-margin products.

Chief executive Harry Adams commented: ‘Our focus remains to capitalise on the significant market opportunities to grow wallet share across an increasing international, high quality client base whilst prioritising a sustainable model that delivers for all of our stakeholders.’

STRONG DEBUT

Cab Payments is market leader in business-to-business cross-border payments and foreign exchange in hard-to-reach markets.

In its maiden set of results, the company reported revenue grew 94% to £71.8 million while pre-tax profit more than doubled to £23.8 million in the half to 30 June.

The company experienced significant growth across the business with foreign exchange and payments increasing 64%, while outside the Nigerian corridor revenue grew 62% to £33 million.

Chief executive Bhairav Trivedi said trading in the third quarter had improved and was returning to ‘more normal levels’ with the end of the fourth quarter traditionally being the busiest period.

Management therefore said it remained ‘confident both in the short-term outlook and the prospects for medium-term growth. ‘

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