Multicurrency payment company FairFX looked ahead to recording a net profit this year after announcing that its losses narrowed in 2016.
The company, which cuts out costly high street and airport currency middle men, reported strong revenue growth in the second half of the year with momentum continuing into the first quarter of 2017.
The company’s pre-tax loss for the year that ended 31 December narrowed to £1.4m compared to £3.4m in 2015 with its revenue exceeding £10m for the first time.
FairFX’s 26 per cent increase in year-on-year revenue was primarily driven by its International Payments division, which saw a 34.6 per cent increase to £3.8m, and its Currency Cards division, which experienced 29.1 per cent growth to £6m.
The company also saw the gross value of currency transactions sold rise by 27.4 per cent to £798.3m in 2016.
Why it’s interesting
FairFX’s 2016 results were ahead of market expectations and the company has seen its forex transaction volume growth accelerate post-Brexit. The company benefited from currency volatility in the week of the referendum, its transaction volume figures rising by around 50 per cent.
The company has carried its momentum into 2017 and is targeting a net profit this financial year. FairFX believes its strategy of heavily investing in marketing, which has seen the company sign deals with HolidayExtras, Leicester City F.C. and Sky Sports’ Formula 1 coverage, could help it become a “leading category brand”. The company is also planning to use its acquisition of Q Money as a “springboard to launch new products into the corporate space”.
What FairFX said
The company’s non-executive chairman John Pearson said: “In contrast to 2015, where we clearly stated our strategy of focusing on the retail card space and performing a customer land-grab, our 2016 strategy was two-pronged. Firstly, to carry on our growth in the retail space but secondly to increase focus on the corporate product.
Chief executive Ian Strafford-Taylor said:
We see great opportunity in the corporate space as the size of the market is greater nd there are less direct competitors. Also, because our corporate card product is free to use in the UK, our universe of potential customers is all UK corporate and not limited to those with overseas travel.
It is unclear what the long term impact of the vote on the macro economy will be but in the period since the referendum FX volumes have remained strong so we remain confident in our forecasts.
Revenue growth driven by marketing and a strong post-Brexit performance has cut the company’s losses with management hopeful of FairFX reporting a net profit this financial year.