Foreign exchange service provider Alpha Group International plc (AIM: ALPH) today published a trading update for the six-month period ending June 30, 2024.
The group’s revenue surged by 16% to over £64 million, compared to £55 million in the first half of 2023. Corporate revenue increased by 12% to £30 million, while institutional revenue grew by 15% to £33 million. Additionally, Cobase revenue saw an impressive 80% rise to £1 million.
Average client balances rose by 16% to £2.07 billion. Net Treasury Income (NTI), including both client and own income, reached £42 million, up from £34 million in the same period last year. Total income increased by 19% to £107 million, compared to £90 million in H1 2023.
Alpha Group maintained a strong cash and liquidity position, with adjusted net cash of £180 million. The company was included in the FTSE 250 in June, following a successful listing on the Premium Segment of the Main Market in May. Two share buyback programs totaling up to £40 million have been launched, with over £20 million completed to date. Additionally, Dame Jayne-Anne Gadhia was appointed to the Board as Chair Designate in May 2024.
Historically, Alpha Group reported its performance through FX risk management and alternative banking. However, to better align with the current operating model, the group will now report through the corporate and institutional markets.
The Corporate division operates from its UK headquarter and six additional international sales offices. Despite a challenging business environment, corporate revenues increased by 12% to £30 million. Client numbers grew by 9% to 941, and average revenue per client increased marginally to £63,000. Six of the seven offices grew revenues compared to H1 last year, with the Munich office performing particularly well.
Despite a subdued business environment, institutional revenues grew by 15% to £33 million. FX Risk management client numbers increased by 19% to 271, and account numbers rose by 31% to 7,030. The division’s fund finance product, launched in May 2023, has also shown positive performance.
Cobase, a treasury-focused technology platform acquired in December 2023, reported £1 million in revenue for H1 2024. Client numbers increased to 169, representing growth of 80% in revenue and 55% in client numbers compared to H1 2023.
Meanwhile, interest rates are expected to decline over the medium to long term, which may present a headwind for net treasury income. However, falling interest rates are likely to boost the trading activity of corporate and institutional clients, providing more opportunities for account openings and larger balances.
Between January 30 and June 27, 2024, Alpha completed its £20 million share buyback program, repurchasing 1,006,428 shares at an average price of £19.87. Following this, the board launched a second buyback program of £20 million, which commenced on June 28. Since then, the company has purchased an additional 30,000 shares at an average price of £24.20, taking the total value of shares purchased to £20.7 million since January 30, 2024.
