logo-loader
viewAlpha FX Group PLC

FXPress Payment Services: Forex group eyes stock market listing

The company is bringing on board three heavy hitters as independent directors

Alpha FX Group PLC -

A fintech play backed by a trio of City heavy hitters is apparently on the hunt for an AIM cash shell to reverse into.

Forex specialist FXPress Payment Services, which caters for small and mid-sized businesses, is looking to list in the first quarter of next year with a price tag of up to £25 million.

Joining its board are former Interserve chairman Glyn Barker; Elliott Mannis, previously the chief financial officer of Anglian Water, and corporate lawyer, Gareth Edwards.

According to those in the know, the company is close to concluding a £1.2 million pre-IPO funding round that will be used to accelerate growth.

In November, FXPress handled £115mln in foreign exchange transactions, up strongly from six months ago when the business handled around a quarter of that figure.

Growing revenues 

The company generated revenues from currency trading of £1.15mln in the last quarter, which gives an annual run rate of £4.6mln.

FXPress has grown using a cloud-based technology that will allow it to roll up other businesses onto the platform. It is thought to be interested in acquiring 10-15 smaller firms, called client aggregators, that funnel business its way.

There may be other, more material opportunities to buy established forex firms pre-IPO, sources said, while joint ventures may offer opportunities to bolt on other payment services.

A look at the current list of publicly-quoted forex firms shows they have grown rapidly since IPO and perhaps gives some guide to the trajectory FXPress might find itself on.

For example, Alpha FX (LON:AFX) has gone from £64mln to £378mln in 30 months; while Argentex (LON:AGFX) has grown by 50% in value in less than six months.

While valuations of up to 10-times last reported revenues look fairly punchy, they help underline just what a hot market forex is at the moment, particularly when there is a fintech twist.

Acquisition currency 

In listing, FXPress is tapping into acquisition currency that is attractive to sellers of private businesses that currently might fetch two-times revenues in a private trade sale.

Talking about FXPress’ growth plans, one source said: “These guys have a scalable technology, a great business model and no end of opportunities to expand.”

These points probably haven’t gone unnoticed by the competition. “They have been a very well-kept secret so far, but not for long,” said another person close to the company.

“One of the big competitors has already taken a look. They [FXPress] didn’t allow the conversation to go far as the journey has just started.”

Quick facts: Alpha FX Group PLC

Price: 775 GBX

LSE:AFX
Market: LSE
Market Cap: £310.5 m
Follow

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: Ideanomics’ massive EV expo center in Qingdao, China is...

Ideanomics (NASDAQ: IDEX) CEO Alf Poor joined Steve Darling from Proactive with the news the company has finally opened the largest auto trading market in Qingdao at MEG's Qingdao EV hub. Poor discusses why they decided to build this superstore and also why this location is perfect to service...

39 minutes ago

3 min read