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

Market: LSE
Market Cap: £310.5 m


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