UK-based provider of foreign exchange services Argentex Group PLC issues a trading update for the first half of the financial year ending 30 September 2020.
The Group’s FCA regulated subsidiary, Argentex LLP, expects to report revenues for the six-month period of £11.8 million. There is a 14.7% fall in the revenue compared to the same period in 2019, largely driven by a reduction in client activity, as the continued macro-economic uncertainty and the effects of the COVID-19 pandemic led to some clients deferring their trading activity.
This delay in trading activity is expected to bring strong trading volumes in the second half of the financial year. The underlying business performed well during the period as the Group added a large number of new customers and continued to focus on increasing the quality and diversification of its client book, while also turning down trades that exceeded the its risk appetite in order to maintain the integrity of its exposure profile.
Argentex has registered an uptick in the rate of new client acquisition of 87% compared to the same period last year and further progressed its long-term growth strategy when it opened its new London headquarters in September. The group delivering on its commitments of investing in new talent across the business, including a 62% increase in sales staff.
The group has seen a strong momentum in customer growth in the first half of the year and expected uptick in trading from the existing client base that gives the Directors confidence that the results for the second half, traditionally the slightly stronger half, will deliver a material improvement on the first half results.
As the long-term impact of the COVID pandemic on global markets continues to be laid bare, it has never been more important to stand by our clients and ensure their growing FX trading needs are met. Despite frustrations over the drop in trading activity throughout the period I’m proud of how our people have adapted and delivered for our clients. Whilst clients delaying their trading activity has impacted our revenues, each of them has a commercial need to remove FX risk, so we expect a significant backlog of client volumes to be realised, the timing of which will likely depend on market and geopolitical events.
Carl Jani, Co-CEO said:
The strong underlying performance of the business – notably the marked elevation of new client acquisition – is testament to our focused, long-term approach. In the face of a surge of client interest, we have focused on the quality of revenue over trading volume, remaining true to our strict risk management processes. Due to strong business fundamentals we have confidence in our ability to weather the uncertain environment, supported by a new office, a growing and increasingly talented workforce and a business model with proven resilience.
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