12th Jan 2021 11:56
(Alliance News) - Alpha FX Group PLC expects its profit in 2020 to top expectations, the company said on Tuesday, and the currency management firm added that it predicts a "minimal" revenue impact while it wraps up establishing a unit in Malta following the UK's post-Brexit transition period with the EU ending.
Revenue for 2020 is expected to come in at GBP46 million, up 30% from GBP35.4 million a year earlier. Alpha FX added that underlying operating profit will be "slightly ahead of most recent expectations". Underlying operating profit in 2019 was GBP14.7 million.
"Growth for the year came from both our FX risk management and alternative banking divisions, despite the former seeing a significant impact in the first half from businesses delaying their trading activity because of the slowdown in global trade as a result of Covid-19," Alpha FX said.
"Despite the backdrop, client numbers increased by 16% during the year from 648 to 754."
Alpha FX said that due to the "limited scope covering financial services" in the UK's post-Brexit trade deal with the EU, it will conclude the final set up of a unit in Malta. The unit is predicted to be operational by the end of the first quarter of the year.
"Until this time, the business will service European derivative clients through reverse solicitation and operating on an execution only basis," Alpha FX added.
Reverse solicitation is not uniformly implemented among EU member states, meaning that the company can only offer is derivative services to European clients when requested.
As a result, the Alpha FX said it will "not be servicing derivative clients in certain EU member states".
"A small number of existing clients representing less than 1% of the group's revenue will not be able to place new derivative trades with us until Malta is operational," the firm added.
Alpha FX shares were 3.9% lower at 1,365.00 pence each in London shortly before midday on Tuesday.
By Eric Cunha; [email protected]
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