Brexit effects take toll on OFX Group’s revenues

Maria Nikolova

Total fee and commission income for FY2017 is set to be $3 million below expectations.

Brexit effects are starting to bite income of some businesses, with a piece of proof provided earlier today by international provider of online payment services OFX Group Ltd (ASX:OFX).

Today, the company published a trading update for the quarter to December 31, 2016, with the numbers painting a rather dull picture. During the three-month period, the company saw further drop in average transaction values from transactions originating from individual customers in the UK.

The company explained that the devaluation of the GBP in connection to “Brexit” has led to fewer big value discretionary transactions and a 35% fall in revenues per transaction. This decline, in turn, is set to result in OFX’s total fee and commission income for FY2017 being $3 million lower than initially forecast.

OFX Chairman Steven Sargent also noted the “softer market conditions in the UK as a result of Brexit” and called the trading update “disappointing”.

Adding to the gloom, OFX said that clients additions in Australia in the third quarter failed to meet expectations – that was attributed to the ongoing extension and refinement of company’s performance-based marketing program.

The company now expects statutory EBTDA for FY2017 to be in the range $27.5 million – $28.5 million.

At ASX close today, one share in OFX traded at AUD 1.27, down 23.95%.

Today’s share price dive is worse than the one registered after OFX reported its financial results for the first half of FY2017 but is not so bad as the drop of more than 40% after the company ended acquisition talks with Western Union in February 2016.

In November 2015, Western Union submitted an indicative conditional proposal for all of OFX’s (back then OFX was still widely known as OzForex) issued share capital. Under the proposal, Western Union would have purchased 100% of the shares of OzForex for an all cash consideration of between $3.50 to $3.70 per OzForex share.

In February 2016, OFX said Western Union had not submitted a binding proposal. As a result, the Board of OFX has terminated talks with Western Union.

Read this next

Retail FX

Interactive Brokers adds 680k accounts, daily trades hit two-year high

Interactive Brokers LLC (NASDAQ: IBKR) recorded 2.44 million daily average revenue trades (DARTs) in February 2024, marking a notable increase from the 2.2 million transactions observed in the previous month. This figure represents the highest DARTs reported in two years, indicating an 11 percent monthly surge and a 15 percent year-on-year rise.

Retail FX

Financial Commission adds Ultima Markets to membership roster

Multi-asset brokerage firm Ultima Markets, operating under the trading name Ultima Markets Ltd, has been granted membership of the Financial Commission, marking the most recent inclusion into the ranks of the self-regulatory organization.

Digital Assets

Bitcoin hits fresh record high amid massive short squeeze

Bitcoin has surged to record highs against both the euro and the pound, hitting €60,447 and £51,736 respectively on Coinbase. The primary cryptocurrency has seen an almost 7% increase in the past 24 hours.

Digital Assets

US court rules crypto trades as securities in Coinbase case

A US court ruled that trading crypto assets on platforms like Coinbase constitutes securities transactions.

Market News

Weekly Data: Oil and Gold: Brief Review before the NFP

This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the main market drivers for the near short-term outlook.

Institutional FX

FXSpotStream reports lower volumes for February 2024

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for February 2024, which moved lower on a monthly basis.

Fundamental Analysis

Global FX Market Summary: EUR, USD, Gold March 4th,2024

US Dollar Weakness: The US Dollar (USD) is currently struggling to gain strength due to a combination of factors.

Technical Analysis

Bitcoin Technical Analysis Report 4 March, 2024

Bitcoin cryptocurrency can be expected to rise further toward the next resistance level 69000.00 (former multiyear high from January)

Opinion

Finding Opportunity in Challenge: Why New Regulations Offer a Chance For Business to Get on Top of Data Management

The combination of CESOP, PSD3 and the PSR, has put businesses under new pressures. In this engaging article, André Casterman, Senior Advisor at Intix provides invaluable guidance on how companies can stay ahead of the curve.

<