Alpha FX has posted its 2020 annual results. The annual report was an unusually meandering document for a public company, covering micro and macro trends, staff call-outs, favourite books and a plug for executive coaching.
We asked Morgan (Alpha’s CEO) to walk us through the results; he said Alpha prefers to be discreet. A slightly curious statement for a public company, so we’ve dug into the results and annual report regardless.
Alpha’s group revenue increased by 31% to £46.2m compared to £35.4m in 2019, and profits increased by 16.8% to £17.1m in 2020. Unsurprisingly, during the first half of 2020 revenue growth slowed significantly but picked up in H2, and over the whole year client numbers increased 16% to 754, up from 648.
Over the past five years, Alpha’s profit margins have gradually decreased from 51% to 37%, however revenue per customer almost doubled from £36,400 to £61,300 over the same period. Pause a moment – over £60k revenue per customer is no mean feat (see the links at the end of this letter for previous analysis on B2B customer values in the industry).
In April 2020, Alpha raised £19.2m to continue investment in new products and markets, including Alpha Platform Solutions, Canada and The Netherlands. Alpha was also likely lucky as early 2020 currency volatility and over-concentration in one hedging client nearly ended very badly (Cambridge took a $90m hit and EncoreFX collapsed from similar experiences). Alpha now publishes its forward book exposure for its top clients and will be doing business a little differently.
Looking to the future, the company sees the big opportunity as FX risk management for the mid-market and above claiming the team has “barely scratched the surface of the addressable market”. Its Alternative Banking division, which Alpha Platform Solutions is part of, is still at an early stage and provides further growth opportunities.