OFX marks growth in turnover, but net profit drops in FY19

Maria Nikolova

The company incurred non-operating expenses of $4.3 million related to corporate action costs from discussions with Currencies Direct.

Provider of online payment services OFX Group Ltd (ASX:OFX) has earlier today posted its full year results for the period ending March 31, 2019. 

Turnover during FY19 amounted to $23.7 billion, up 11.9% on FY18.

Fee and trading income marked an 8.2% year-on-year growth to $128.7 million, with corporate growth of over 10% in all regions. Net Operating Income rose 8% to $118.7 million at stable margins.

Underlying EBITDA (excluding corporate action costs) increased 8.1% to $32.2 million, delivering annual positive operating leverage.

Statutory NPAT (net profit after tax) decreased 5.8% to $17.6 million, due to previously disclosed corporate action costs of $4.3 million, with R&D benefits and lower offshore taxes reducing the effective tax rate to 20%. The Company incurred non-operating expenses of $4.3 million related to corporate action costs from discussions with Currencies Direct.

In an announcement filed with the ASX on November 13, 2018, OFX Group noted media speculation and commented that it continually reviews potential opportunities and holds discussions with various parties, including Currencies Direct. OFX also stressed that it is in compliance with its continuous disclosure obligations and will keep the market informed in accordance with those obligations. A week later, OFX said that discussions with Currencies Direct were no longer continuing.

Commenting on the results for FY19, OFX’s Chief Executive Officer and Managing Director, Skander Malcolm, said:

“We saw revenue growth in all our regions with Australia and New Zealand up 5%, North America and Asia up 20% and 19% respectively, and Europe up 12%. We also had strong growth in our Corporate book with all regions growing revenue by more than 10%, further diversifying our revenue base”.

Mr Malcolm, however, conceded that “Given the softer markets in the second half, and particularly in the final quarter, we pulled back on promotional spend where markets were quiet, but continued to spend where customer activity and economic returns made sense. As a result, our revenue growth rate slowed and we did not see an increase in active clients, as anticipated.”

In terms of outlook, in FY20 OFX will look to further diversify its revenues by accelerating growth in its Corporate business, through further investment in the client experience, introducing its CRM program and shifting its marketing mix. The company is also aiming to grow across its regions globally and is targeting Enterprise partnership opportunities. 

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