12 April 2022

Argentex Group PLC

Trading Update

Argentex Group PLC, ("Argentex" or "the Group"), the provider of foreign exchange services to institutions, corporates and high net worth private individuals, today issues a trading update for the 12 months to 31 March 2022.

Highlights:

• Strong growth in Group revenue of 23% to £34.5m (2021: £28.1m) with expected underlying* operating profit margins broadly in line with prior year (2021: 30.9%)
• Continued strong client demand with 528 newly traded corporates (2021:499) and the total number of corporates trading in the year reached 1,624 (2021: 1,385)
• Netherlands office delivered half on half revenue growth since inception and the Australian operation set to launch in the current financial year
• New technology-enabled trading and client service platform launched, the first in a suite of upcoming developments underpinned by a new technology strategy
• David Christie appointed as Chief Operating Officer and David Winney as Global Chief Compliance and Risk Officer
• Group remains well capitalised, debt free and cash generative
• Singer Capital Markets appointed sole Nominated Adviser and sole Broker

*underlying operating profit margin excludes one off costs in relation to any restructure and set up of overseas offices in addition to non operational costs such as finance charges and share option expense

Argentex expects to report revenues of £34.5 million for the 12 months to 31 March 2022, representing growth of 23% year-on-year (2021: £28.1 million). This growth was driven by the Group's targeted investment in strengthening its team, broadening its geographic reach and taking more market share. In addition, the Group has invested to evolve its technology proposition in order to drive efficiencies and meet the growing demand from new and existing clients for its growing list of products and services. Corporate clients trading in the year totalled 1,624 (2021: 1,385) with 528 new corporate clients trading over the period (2021:499). 

Against an uncertain and volatile geopolitical backdrop, the Group continued to maintain its prudent approach to risk management, focusing on the quality and diversification of its book, remaining debt free, cash generative and profitable. Our portfolio is matched with blue-chip institutional counterparties and remains heavily weighted to major currencies, with over 83% allocated to GBP, EUR and USD. The Group has no direct currency exposure to the Russian Rouble and continues to closely monitor the wider potential impacts of the Russia / Ukraine crisis.

Future growth drivers

Shaping the growth strategy and building on the existing foundations laid since IPO, the Group has continued to invest to ensure it develops to meet its client needs and drive shareholder value. The coming financial year represents an exciting chapter in Argentex' growth journey. Of particular note:

i)          International Growth

The Group's newly formed Dutch office, which is the European hub of Argentex, continues to progress in line with expectations, delivering positive half on half revenue growth during the period, helped by a doubling of front-office headcount, which underpins its growing strategic importance.

Furthermore, the Company's planned entry into the Australian market through a Sydney office in the current financial year to 31 March 2023 is at an advanced stage and remains a key objective in maximising growth opportunities outside its core UK market. 

ii)         Technology

As part of its commitment to continually deliver the best outcomes and experience for clients, Argentex has launched a new technology-enabled trading and client service platform as part of a new technology strategy.

Further enhancing the in-person service-led approach which the Group has championed, the client platform has been significantly optimised to improve the usability and customer experience online.  It will enable our clients to tailor the service levels they require as well as increasing functionality and driving real time engagement. This optimised platform will be supported by a mobile responsive interface, providing further flexibility to the Group's client base and enable the Group to take a greater share of client wallet. It will seek to capture new customers, drive basket size and gain further international reach. The platform has been rolled out to a subset of existing Argentex customers, with positive feedback and results.  In the current financial year, the new trading and client service platform will be made available to all customers.

After our recent phase of investment, this is the first in a planned suite of proprietary tech-enabled products and a step forward in the Company's journey towards becoming a technology-led financial services provider, with improved client accessibility, experience and scope to broaden our product offer. The continued digitisation of the platform will support the Group's aims to create a more efficient and scalable platform with diversified revenues to help drive profitable growth.

iii)        Investment in People

The Group is pleased to announce the appointment of two new executive (non-Board) leadership team members. David Christie joins as Chief Operating Officer and David Winney joins as Global Chief Compliance and Risk Officer.

David Christie joins Argentex with over 25 years' experience in technology in financial services, with over 15 years' experience in the FX and international payments space where he was formerly COO of XE and Ria Financial, one of the largest non-bank financial institutions cross border companies globally. He joins Argentex with an extensive experience and track record of successful "full stack" digital transformation, product delivery and strategic program execution including acquisitions and scaling business through effective use of technology.  

David Winney's career spans 30 years in financial services including managing global teams at financial institutions such as HSBC, Citigroup and Bank of America as well as in leading foreign exchange and payment services firms such as AFEX and Monex Europe. David has served as a board member of payment and investment firms in several jurisdictions as well as leading successful operations, risk and control functions in addition to his extensive compliance experience. David is a Fellow of the International Compliance Association and a Chartered Member of the CISI.  

Both David Christie and David Winney will be based in our global headquarters in London.

In addition, Argentex continues to invest in talent across the Group, having made 31 hires in the reported period bringing total current Group headcount to 100. In addition to 19 front office hires, it has increased bench strength across the support functions in order to enable the business to scale efficiently and maintain a robust approach to risk management.

Change of Nominated Adviser and Broker

The Board of Directors today announces the appointment of Singer Capital Markets as the Company's Nominated Adviser and Sole Broker, effective immediately.

Harry Adams, CEO, commented:

"In FY 2022, we reset the business, evolved the strategy and invigorated the growth potential of the Group. The momentum behind those long-term initiatives is starting to bear fruit, as reflected in our robust financial performance.

"Our executive leadership team has been further bolstered by the appointments of both David Christie and David Winney.  David Christie joins as Chief Operating Officer who is well positioned to further the strong progress made during the period in building out our technology-led proposition. The expertise brought by David Winney to the Global Chief Compliance and Risk Officer role will be critical to our success as we expand our product offering and geographic footprint moving forward."

"As we embark on the next and exciting stage of our growth journey the business has never been in better shape and I look forward to FY 2023 and the significant market opportunities that lie ahead with confidence."

-ENDS-

For further information please contact:

Harry Adams - CEO

Jo Stent - CFO

(Via FTI Consulting)

FTI Consulting (Financial PR)

Ed Berry, Ambrose Fullalove

Telephone: 07703 330 199

argentex@fticonsulting.com

Singer Capital Markets (Nominated Adviser and Broker)

Tom Salvesen, James Maxwell, Justin McKeegan

Telephone: 020 7496 3000

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014, AS AMENDED (AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018).