Alpha Group launches £20 million share buyback

Foreign exchange service provider Alpha Group International plc (AIM: ALPH) today announced it plans to launch a share buyback program of £20 million, which will be held in its treasury.

The UK-listed broker released a statement that it has entered into non-discretionary instructions with Liberum Capital Limited to conduct the transaction. The maximum price per ordinary share is set to 105% of the average trailing 5-day mid-market closing price, which is in line with the authority granted at the company’s annual general meeting.

The buyback program takes effect from today and will remain active until the date of the company’s next AGM, unless the maximum aggregate consideration of £20 million is reached before then.

“A buy-back of Ordinary Shares on any trading day may represent a significant proportion of the daily trading volume and may exceed 25 per cent. of the average daily trading volume. Accordingly, the Company will not benefit from the exemption contained in Article 5(1) of the UK version of the Market Abuse Regulation (Regulation (EU) No 596/2014) as incorporated into UK domestic law by virtue of the European Union (Withdrawal) Act 2018,” the statement reads.

Earlier this month, Alpha Group published its results for the financial year ending December 31, 2023, which showed solid performance in terms of revenue and earnings growth. The company was able to amass a total revenue of £110 million. This figure was up 27% over the twelve months through December 2020, which was reported at £98.3 million the previous year.

Profit before tax saw a substantial increase of over 140%, reaching £115 million, up from £47.2 million in FY 2022. The underlying profit before tax also grew by 10% to about £42 million. Despite various market challenges, the company maintained a consistent underlying profit margin of 39%.

Another noteworthy aspect of Alpha Group’s financial performance was its other operating income from interest on client balances, which exceeded £73 million, well above the £9.3 million reported in FY 2022. Additionally, the company’s balance sheet and liquidity position remained very strong, with adjusted net cash increasing by over £60 million to more than £177 million.

During the year, the company launched a new Fund Finance division and opened new Corporate FXRM offices in Madrid and Munich.

Earlier in December, Alpha Group finalized its acquisition of Financial Transaction Services, operating as Cobase. The acquisition, initially announced in September, involves Alpha purchasing an 85% stake in Cobase for €9.4 million in cash, a transaction that was subject to approval by De Nederlandsche Bank, the central bank of the Netherlands.

The deal also includes provisions for Alpha to acquire the remaining 15% stake through a performance-based earn-out scheduled between 2025 and 2028.