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FairFX surges as it declares maiden half-year profit

It was a strong performance, especially considering the weakness of sterling and with the CardOne acquisition bedding down well

Pound coins sterling
The board remains confident about the trading outlook for the business for the full year - and sterling's recent rally should help

Shares in e-banking and international payments group FairFX Group Plc (LON:FFX) opened sharply higher after the firm announced a maiden half-year profit.

The shares opened at 71.42p, up 6.6%, as the company reported a strong growth in turnover, revenue and gross profit in the first half of 2017– not forgetting the maiden profit of £150,392, versus a loss of £887,818 the previous year.

WATCH: CardOne acquisition 'a key move' for FairFX into the digital banking space

Turnover – i.e. money processed on the FairFX platform – rose 26% to £434.0mln from £344.3mln the year before.

FairFX receives a take from each transaction, and the increased turnover fed through to a 33% rise in revenue to £6.1mln from £4.6mln the year before.

Corporate card turnover growth shot up 95% to £59.0mln from £30.3mln the year before, underscoring the success of the company’s strategic decision to focus on this market.

Gross profit increased by 37% to £4.8mln from £3.5mln the previous year, while the gross profit margin improved to 1.12% of turnover from 1.03%.

FairFX said it now has 623,602 retail customers, up 35,410 year-on-year.

Good start to second half

The group said it had made a strong start to the second half of the year, with turnover in July and August up 12% year-on-year, or up 27% if you strip out the lower margin business for Leicester City FC. FairFX is the official foreign exchange partner of the former Premiership champions.

“Top line turnover growth has continued, and with the group operationally geared, revenue is increasingly flowing through to profit. This trend is expected to continue in the second half of the year as we continue to grow and rationalise the supply chain," said Ian Stafford-Taylor, chief executive officer of FairFX.

“Achieving this performance against a backdrop of weak sterling, which is historically a headwind for the business, is a great testament to the strides we have taken in recent years to broaden the product mix,” he added.

 "The outlook for the group is further enhanced by our acquisition of CardOne. In the short time since the deal was completed, we have already made significant progress in combining our two businesses into one and we are starting to extract cost synergies with more to come. I am particularly delighted with how the businesses complement each other and how the two locations are already working together as a unified team," Strafford-Taylor said.

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