TIDMAFX
RNS Number : 4823S
Alpha FX Group PLC
17 March 2021
17 March 2021
Alpha FX Group plc
("Alpha FX" or the "Group")
Full Year results
for the year ended 31 December 2020
Alpha FX Group plc (AIM: AFX), a provider of FX risk management
and alternative banking solutions to corporates and institutions
internationally, is pleased to announce its audited Full Year
results for the year ended 31 December 2020.
Financial Highlights
-- Group revenue up 31% to GBP46.2m (2019 GBP35.4m)
-- Underlying* profit before tax up 20% to GBP17.5m (2019 GBP14.6m)
-- Reported profit before tax up 27% to GBP17.1m (2019 GBP13.5m)
-- Underlying profit before tax margin of 38% (2019 41%)
-- Basic earnings per share up 15% to 31.7p (2019 27.7p) and on
an underlying basis 32.8p (2019: 30.1p)
-- Final dividend of 8.0 pence per share, payable on 14 May 2021
to shareholders on the register as at 16 April 2021
Operational highlights
-- 16% increase in client numbers, from 648 to 754**
-- Average revenue per client grew by 12%
-- 32% increase in average employee headcount, from 102 to 135
-- 44% of employees hold a long-term equity interest in the business***
-- Solid cash position and debt free with GBP91m net assets and GBP52m in free cash
-- Cash conversion of 100%, excluding the impact of our Norwegian client (2019 72%)
-- Canadian office launched in 2018 now profitable for the full year
-- Alpha Platform Solutions launched in 2018 now profitable and
grew year on year revenues by over 600%
* Underlying excludes the impact of exceptional property related
costs in the prior year and non-cash share-based payments.
** The Group exclude Training Accounts (those that have
generated less than GBP10,000 in revenue since being onboarded) in
order to provide a clearer picture of client retention for the
purposes of these figures.
*** The Group defines a 'long-term equity interest' as an equity
stake: held prior to the Company's IPO; or held in the Group's B, C
or E growth share scheme; or shares owned directly in one of the
Group's trading subsidiaries.
Outlook
The success of our investments to date has ensured that the
market opportunity for Alpha remains strong, and our business
resilient, even under the most testing conditions.
Whilst COVID-19 provides a continuing cause for caution across
the world, the Group has made an excellent start to the year.
Subsequently, the Board remains optimistic that, providing the
situation under COVID-19 does not deteriorate, the Group is on
track to deliver another strong year of growth.
Morgan Tillbrook, Chief Executive Officer of Alpha FX,
commented:
"For many companies across the world, 2020 has represented their
greatest challenge to date, and Alpha was no different. However,
what I witnessed last year was a team that grew more ambitious,
more determined and more connected with every challenge that was
thrown at them. The result that the market will see today was
another year of consecutive growth across all divisions, and I am
naturally delighted with this. However, I believe the long-term
benefits for our team and culture, having overcome this experience
together, will prove far more valuable still."
Enquiries:
Alpha FX Group plc via Alma PR
Morgan Tillbrook, Founder and CEO
Tim Kidd, CFO
Liberum Capital Limited (Nominated Adviser and Sole Broker) Tel:
+44 (0) 20 3100 2000
Neil Patel
Richard Bootle
Kane Collings
Alma PR (Financial Public Relations) Tel: 07780 901979
Josh Royston
Helena Bogle
Market Abuse Regulation
This announcement is released by Alpha FX Group plc and contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and
is disclosed in accordance with the Company's obligations under
Article 17 of MAR.
The person who arranged for the release of this announcement on
behalf of Alpha FX Group plc was Tim Kidd, Chief Financial
Officer.
Notes to Editors
Alpha provides FX risk management and alternative banking
solutions to corporates and institutions across the UK, Europe and
Canada. Combining leading expertise and technology, the Group
partners with a small number of high value clients to provide
enterprise-level solutions across four key areas: FX risk
management, international payments, accounts and collections. Since
it was incorporated in 2010, Alpha FX has been able to build and
retain a high-quality client base that includes a number of highly
respected brands.
Chief Executive's Statement
The financial results demonstrate another year of profitable
revenue growth, which is particularly impressive when set against
the backdrop against which they were delivered. When I wrote this
statement last year it was to celebrate Alpha's 10-year anniversary
and state that we were well placed to enjoy a long, profitable
future. At the time, it was impossible to foresee the challenges
that we would face in the year ahead. Our focus on culture has
always been of paramount importance and has enabled us to meet
these challenges head-on, navigate our path through them, and learn
from them. As a result, we have emerged an even stronger, more
balanced and more resilient group in order to drive growth for the
next decade and beyond. The increasingly diverse nature of our
Group has also added greater levels of resilience, justified our
investments to date, and has given us greater confidence in the
ambitious plans that we have for the future.
At the end of the first quarter, the acceleration of COVID-19,
coupled with the collapse of the oil price into negative territory,
led to unprecedented falls in the value of certain currencies,
resulting in many clients seeing the value of their forward
contracts deviate significantly. One client was left with
outstanding payment obligations of over GBP30m, when the Norwegian
Krone fell 15.9% against the US Dollar in a single week, having
already depreciated over 15% in the prior weeks, during which time
they continued to meet their margin obligations on time. This was
nearly three times its previous largest weekly fall of 6.4%
recorded during the 2008 financial crisis. Since agreeing a weekly
repayment plan with the client, all payments have been received on
time, which is testament to the client's strong financial standing
and the robustness of our credit underwriting. In retrospect, the
core issue was overconcentration in one client. The experience acts
as a further reminder to never underestimate how irrational markets
can be, and not to assess future volatility based off historical
records. We need to be prepared for the unexpected - and more. We
have therefore decided to introduce controls to ensure our client
concentration never reaches those sorts of levels again.
As highlighted at the time of our interim report, we have
carried out a thorough review of our internal processes and
completed additional steps to further enhance the business's
resilience and safeguard the interests of all our stakeholders.
This includes reducing our appetite for material client
concentrations (regardless of their credit standing) moving
forward. Additionally, in order to give our clients, suppliers and
investors improved visibility, we now bi-annually publish our
concentration of clients by sector, and top 20 clients as a
percentage of our forward book, the largest of which represents
less than 3% at the end of the full year - five times lower than it
was in 2019. The full breakdown can be viewed online at:
https://www.alphafx.co.uk/investors/financial-information/client-concentration/sector-concentration/
.
As a fast-paced, high-tempo business, the global slowdown in the
wake of the pandemic gave us a rare moment to pause and reflect on
what has made us successful to date and reassess our strategy from
an outside perspective. In doing so, we realised we had an
incredible platform for growth: an exceptional team, armed with a
highly diversified offering, standing before a marketplace we have
barely scratched the surface of. It is a privileged position to be
in, and we have worked hard to get here. However, as I said to the
team in a recent townhall, this is still only the beginning. To
ensure our growth continues, I believe we now need to set our
sights on upholding three strategic focuses. These are:
- cultural density - providing an exceptional community full of
opportunity, that inspires our team to expel discretionary energy
and go further than our peers;
- client-centricity - scaling a high-performing yet humble sales
team that puts our clients' needs first whilst seeking to better
understand them and;
- operational agility - reducing complexity and complacency as
we scale to provide a low friction and efficient experience for our
clients and employees.
As businesses scale, these are often the three areas they lose
touch with. Yet I believe they are also the most important to our
growth and we must therefore protect them with vigour. I
passionately believe that if we remain client-centric,
operationally agile, and protective of our culture at all costs,
this fantastic growth story will continue long into the future for
the benefit of the team, our clients and our shareholders.
Market Opportunity
The market opportunity for Alpha continues to grow, and our
ability to execute upon it strengthens. As we develop, we learn
where we get the most traction and where our biggest areas of
opportunity lie, driven by the understanding of the needs of our
growing client base and creating the optimal solutions to meet
them. It is important to remember that our Corporate team in London
has barely scratched the surface of the addressable market for FX
Risk Management and this opportunity has increased further with the
addition of our Institutional team, Canadian and Amsterdam offices.
Likewise, the Alternative Banking division is still at a nascent
stage.
Although we have proven the viability in each of these revenue
streams and already delivered tangible results, we have barely
begun our journey. Alpha is becoming a more diversified and more
resilient business, and that trend will continue. Furthermore,
increasing regulation within the UK, in addition to European
passporting rights no longer being accessible from the UK, means
competitors are now required to be dual regulated if they wish to
service both the EU and the UK. This will create additional
barriers to entry for new participants, whether in the form of
greater capital requirements, expertise, technology or risk
management processes.
FX Risk Management
Our FX Risk Management division focuses on supporting corporates
and institutions across the UK, Europe and Canada that trade
currency for commercial purposes, such as buying or selling goods
and services overseas or hedging the underlying value of an asset
or liability. We service this marketplace through our corporate and
institutional sales teams in London, Canada and Amsterdam. Revenue
for FX Risk Management was up 18% at GBP40.3m (2019: GBP34.2m).
The first half of the year saw revenue growth slow significantly
as clients delayed their trading activity as they adjusted to the
realities of the pandemic and assessed its impact on their
businesses. As the situation became clearer, patterns normalised
and the second half of the year saw much stronger growth. The
Canadian office posted a profit for the year, affirming our
investment and belief in the market opportunity, and we expect to
see continued growth in the current year. We have also been pleased
with the performance of our sales team in Amsterdam which was
launched late in the first quarter and which achieved consecutive
quarterly revenue growth.
Whilst we saw slightly tempered growth (compared to historical
standards) within our corporate and institutional risk management
teams in London, it is again important to consider these
performances against the backdrop from which they were delivered.
Like all teams, the continuing restrictions which have resulted
from COVID-19 have meant that our sales staff have had to work
remotely for large parts of the year, making it a very difficult
environment to hire and develop new salespeople. Furthermore, the
corporate sales team has been deprived of some of its
longer-standing and more experienced individuals as they have been
re-focused within the Group to spearhead our more nascent
operations. Ultimately, the sales team's continuing strong
performance in spite of these conditions reflects the quality of
the new cohorts introduced in recent years and the team's spirit
and competence, which has been enhanced through the appointment of
Alex Howorth as Group Managing Director of FX Risk Management in
April 2020. We are confident we will see strong growth moving
forward, and whilst we will continue to grow the team to support
the rate of client acquisition, we know there also remains
significant capacity within the existing team to support
considerable growth long into the future.
Alternative Banking
Our Alternative Banking division focuses on providing corporates
and institutions across the UK, Europe and Canada with a suite of
alternative banking solutions covering payments, collections and
accounts. Serviced primarily by a specialist team within Alpha
Platform Solutions (formerly named Alpha Payment Solutions), the
team also benefits the wider Group from cross-selling with our
corporate and institutional sales teams. Revenue was up 417% to
GBP6.0m (2019: GBP1.2m).
This division still remains very much in its infancy and its
performance to date has proven it has the ability to become a
significant part of the Group. By taking the time to clarify 'where
to play and how to win' over the course of the year, we have seen
increasing traction and stickiness with clients as our product
offering has evolved to better meet their requirements. Our focus
remains on researching our clients' needs and concentrating on
those areas and markets where we know that we can differentiate and
therefore grow sustainably. The strong progress made is testament
to Adam Dowling's impact since joining us to head up our payments
offering at the end of 2018. Indeed, as a result of the growing
potential of this division and Adam's importance within it, we were
pleased to appoint Adam to the position of Group Managing Director
of Alternative Banking in April 2020.
The FX Risk Management and Alternative Banking divisions are
symbiotic in nature and will continue to complement each other.
However, as our expertise within the alternative banking space
increases alongside our product's capabilities, it is becoming
increasingly apparent that each division would benefit greatly from
having their own dedicated and decentralised infrastructure,
operations and reporting lines. The Board has therefore decided
that investment will be made in this financial year, giving each
division the greatest level of operational agility and stronger
foundations to deepen our differentiation moving forward. The
decision taken earlier this year to bring all of our technology
competence in-house has already proved successful, and we believe
will be highly advantageous for our plans going forward. If we want
to be a sustainable long-term growth story, we must think long-term
too. Avoiding short-cuts now and being prepared to lean into the
path of most resistance will ensure we eliminate unnecessary
complexity and legacy technology, both of which can start to stifle
a business as it grows. Decentralisation of our two core offerings
will ensure we remain agile and focused as we scale and that we can
double down on what differentiates us in the FX risk management and
alternative banking spaces. The organisational changes required to
facilitate the decentralisation process have already been completed
and the response from the team has been incredibly positive. We are
already seeing the benefits of this change and I believe we will
look back on our decision to decentralise a decade from now and see
it as a pivotal moment.
People and Culture
We believe investment in the quality of our team is paramount to
delivering sustainable, long-term growth. Our ability to remain a
growth business in 2020, despite the impact of COVID-19, is a
testament to the fact that, when a company looks after its people,
they will look after their company. Indeed, it was because our team
dug deep and pulled together when it mattered that we were able to
continue paying full bonuses and commissions in 2020, whilst also
issuing salary increases as usual at the start of 2021.
Accordingly, the Group continued its investment in Back Office,
with headcount growing from 50 to 69 during the year to support the
ongoing technological development of our alternative banking
solutions, and the increase in support required across Compliance,
Risk, Settlements and Technology as the business scales.
Our Front Office team meanwhile saw a smaller increase in
headcount from 74 to 78. Although employee attrition rates remained
stable, this was due to new hiring being reduced, owing to the
challenge of inducting new salespeople remotely and at a time where
people were naturally more reluctant to move from known job
security. This was exacerbated by the fact that several of our key
recruitment partners were themselves furloughed, owing to the
difficult nature of the market. As talent identification remains so
important to Alpha, we have decided to take control of our own
destiny and are starting to build a team of internal recruitment
specialists. Sitting amongst our sales floor, the team lives and
breathes the Alpha culture, and we will now look to scale the
department to service the rest of the Group. I have wanted to build
an internal recruitment team for a long time; however, it should
not be underestimated how difficult it is to find the right people.
I am very excited about the team's prospects, and the impact they
are going to have in supporting our talent acquisition strategy in
the future.
Across the Group, we made four placements of note during the
year. The first of these has been Matt Knowles' transition from a
Non-Executive Director on the Board, to a more active role within
the Group as Strategic Advisor. Since joining the Board in 2018 I
have welcomed Matt's counsel and we are lucky to be able to draw on
the experience of somebody who has grown an exceptional business
within financial services. Matt's appointment came about after I
finished reading a book recommendation of his, 'The Trillion Dollar
Coach'. Within the book is a quote from Eric Schmidt (retired
Chairman & CEO of Google) which reads '"Hire a coach' is the
best advice I ever got"'. Whether Matt intended it as a hint or
not, this inspired me to do what Clive Kahn had also been
recommending for a while, and ask Matt to take on a more active
role as a Strategic Adviser. Coaching me is just a small part of
the value Matt is now adding; he has been instrumental in
developing and challenging our strategic thinking and is at the
forefront of our efforts to properly understand our clients as well
as our own unique capabilities and how they connect to current and
future opportunities.
In April, Alex Howorth was promoted to the role of Group
Managing Director of FX Risk Management. Alex joined Alpha in 2014
as a Portfolio Manager when we were a team of less than 20, and
therefore has an intricate understanding of the needs and feelings
of the Front Office. He harnesses the sense of "intrapreneurialism"
that has made our sales team so successful and which, like all
businesses that scale, we were in danger of diluting as we began to
rely too heavily on KPI's and processes. His impact has already
been significant, and the global sales team is thriving under his
stewardship. Whilst we are now a much larger business, the passion
and ambition amongst the sales floor once again feels like it was
when we were just a small team in Windsor, working towards our goal
of becoming a public company. It is an incredibly powerful position
to be in and I am very excited for the future of the team working
with Alex, and their opportunities to further participate in the
business's growth via remuneration and equity schemes as we
continue our exciting journey as a public company.
Adam Dowling's transition from MD of Payments to Group MD of
Alternative Banking is testament to how far this division has come
under his leadership: what began as a payments solution has quickly
grown into a highly compelling banking alternative. Adam's vision
and expertise are driving a culture of innovation and ensuring we
maintain an exciting roadmap for the future. He is also a
prodigious executer, and the work ethic he has cultivated has
ensured our growing potential is underpinned by tangible results. I
have been truly impressed with Adam's ability to focus on the
commercials as well as the importance of the operations, and have
great confidence that he and the Alternative Banking division will
go from strength to strength.
James Carey joined us in April last year from Betfair, where he
was Head of Technology for a platform that handled 3 billion
requests and 700 million transactions per day. James works closely
alongside Adam Dowling and has had an immediate impact, maturing
our tech team, refining our processes and creating a
high-performance technology culture. We are already seeing the
benefits of this, with product updates being rolled out faster than
ever before and at a higher quality. It is a privilege to have
someone of James' calibre with us, and it is exciting to see our
product offering and technology stack grow from
strength-to-strength under his and Adam's guidance.
As always, I would like to thank the Board and investors for
their support. However, this year, I would also like to give an
extra special thank you to the team for what has been a truly
heroic performance, under very difficult circumstances. This has
been our most difficult year to date, but it should also be our
proudest, and that is solely down to the passion and commitment
demonstrated by each and every one of you. Thank you.
Brexit
We had been preparing for the possibility of a no-deal Brexit
for a considerable length of time and therefore had processes
established to be able to continue servicing the vast majority of
our European clients when it occurred. However, the limited scope
covering financial services within the Free Trade Agreement meant
we have also since chosen to open a wholly-owned subsidiary
established in Malta, launched in early March. This has ensured
that we can continue to service all clients without disruption both
now and in the future.
We naturally explored several opportunities for servicing
European derivatives clients, including through our office in
Amsterdam. However, certain laws in the Netherlands would have
precluded us from remunerating our staff on the same basis that we
do in other territories, and as our cultural integrity is vital to
us, we felt this was far from ideal. We also identified Malta as a
potential new market and have already made strong progress towards
building a client base in the country. Finally, Maltese corporate
law is closely aligned to UK law, which offers a number of
operational efficiencies.
We continue to stay abreast of any developments but do not
anticipate any further material impact arising from the EU-UK Trade
and Cooperation Agreement.
Financial Review
2020 was another strong year of growth for the business, despite
the impact of COVID-19, with revenue for the year increasing by 31%
to GBP46.2m. In addition to the segmental analysis in note 4 of the
Financial Statements, the Group segments the revenue between FX
Risk Management and Alternative Banking to reflect the two main
drivers of growth.
The FX Risk Management division focuses on supporting corporates
and institutions that trade currency for commercial purposes
through the Group's sales teams located in London, Canada and
Amsterdam. Despite a slowing of growth in the first half of the
year as clients assessed the impact of the pandemic upon their
business needs, revenue for the division for the full year grew by
18%.
The Alternative Banking division focuses on providing corporates
and institutions with a suite of alternative banking solutions
covering payments, collections and accounts across the UK, Europe
and Canada. The service is primarily offered by Alpha Platform
Solutions (formerly Alpha Payment Solutions), a division of Alpha
FX Limited. In addition, Alpha Platform Solutions also services
some FX Risk Management clients benefiting from cross-selling
opportunities from the corporate and institutional sales teams. The
Alternative Banking division saw a GBP4.8m increase in revenue in
the year to GBP6.0m.
Year ended Year ended
31 Dec 2020 31 Dec 2019 Variance
GBP'000 GBP'000 %
FX Risk Management 40,267 34,228 18%
Alternative Banking 5,950 1,150 417%
Total 46,217 35,378 31%
--------------------- ---------------------------- ------------------- ----------
As shown in note 3 of the Financial Statements, total revenue
from hedging products (forwards and options), has increased
slightly in 2020 from GBP27.0m to GBP27.5m with a higher proportion
of revenue derived from option products. Spot and payments revenue
increased from GBP8.3m to GBP18.8m due to the growth of Alpha
Platform Solutions together with increased spot flow from the
Institutional business, where underlying activities mean that spot
transactions are more common. In aggregate 52% of revenue in the
year was derived from products where the revenue is converted into
cash within a few days of the trade date as opposed to 30% in 2019.
This has had a positive impact on the Group's cashflow.
The revenue from forward transactions represents the difference
between the rate charged to clients and the rate paid to banking
counterparties. There were no structural changes in forward
commission rates in the year in comparison to the prior year.
During the year the Group entered into a settlement agreement
with a Norwegian client whereby weekly repayments are due until
June 2022 in respect of their obligations for unpaid margin
totalling GBP30.2m. Throughout the year the client has continued to
meet their settlement agreement cash repayment obligations on time
with a gross balance of GBP20.2m outstanding at 31 December 2020.
Accounting standards require the Group to book two accounting
provisions that have no cash impact. The first provision of GBP0.3m
at 31 December 2020 is based on an estimated probability of
default, with the charge included in operating expenses. The second
net provision of GBP0.6m at 31 December 2020 represents the
difference between the nominal value of future payments and their
net present value. The initial provision of GBP1.3m is included in
operating expenses whilst the reversal of the provision during the
year of GBP0.7m is included within finance income. All of these
provisions should reverse in full as cash repayments are received
in the period to June 2022.
Despite the unprecedented macro-economic impact of COVID-19, the
bad debt provision created in respect of all other clients during
the year amounted to only GBP1.0m (2019: GBPnil).
During the year the Group continued to invest, with average
headcount increasing by 33 to 135 and the establishment of a sales
office in The Netherlands. Costs also included the impact of
Brexit-planning and the full-year impact of the move to the new
Head Office in Paddington. Despite this, profit before tax in the
year grew by 27% to GBP17.1m. Underlying profit is presented in the
income statement to allow a better understanding of the Group's
financial performance on a comparable basis from year to year. The
underlying profit excludes the impact of share-based payments, and
in the year ended 31 December 2019 also excludes one-off
property-related costs. On this basis, the underlying profit before
tax in the year increased by 20% to GBP17.5m.
The underlying profit before tax margin fell to 38% (2019: 41%).
If the provisions relating to the client on a repayment plan are
added back to underlying profit before tax, the margin for the year
would be 40%. With recent investments driving future scalability,
particularly for the Alternative Banking division, and the impact
of COVID-19 subsiding, we expect margins to broadly return to more
normal levels.
Underlying basic earnings per share increased from 30.1p in 2019
to 32.8p in 2020. Basic earnings per share in the year increased
from 27.7p to 31.7p.
In April 2020 the Group announced that it had completed a share
placing by the issue of 2,941,177 new shares raising GBP19.2m after
expenses. The proceeds have been used to continue investment in new
products and markets including Alpha Platform Solutions, Canada and
The Netherlands, as well as provide the capital base to acquire new
clients.
Overall net assets of the Group increased in the year by
GBP33.1m to GBP90.6m.
Cash flow
On a statutory basis, net cash and cash equivalents increased by
GBP9.0m to GBP83.0m. The Group's cash position can fluctuate
significantly from period to period due to the impact of changes in
the collateral received from clients, early settlement of trades,
or the unrealised mark to market profit or loss from client swaps,
resulting in an increase or decrease in cash with a corresponding
change in other payables and trade receivables. Therefore, in
addition to the statutory cash flow, the Group presents an adjusted
net cash summary below which excludes the above items.
In the year ended 31 December 2020 adjusted net cash on this
basis has increased by GBP13.7m. This represents the net impact of
the funds raised from the placing, and cash conversion from the
trading in the year offset by the cash outflow from the client
subject to a repayment plan.
31 Dec 20 31 Dec 19
GBP'000 GBP'000
Net cash and cash equivalents 82,972 73,960
Variation margin paid to banking
counterparties 17,734 1,127
---------------------------------- ---------- ----------
100,706 75,087
Margin received from clients and
client held funds* (50,767) (41,862)
Net MTM timing loss from client
drawdowns and extensions within
trade receivables 2,332 5,364
Adjusted net cash** 52,271 38,589
---------------------------------- ---------- ----------
* Included in 'other payables' within 'trade and other
payables'
** Excluding collateral received from clients, early settlements
and the unrealised mark to market profit or loss from client
swaps
The method used to calculate the Group's cash conversion in
previous reports (cash from operations before tax and after capital
expenditure as a % of underlying operating profit) is substantially
impacted by the client on the repayment plan. On a consistent basis
the conversion would be -8% compared to 72% for FY 2019. If the
cash impact of the client on the repayment plan is excluded, the
conversion would be exactly 100%, largely due to the higher
proportion of revenue being derived from products where cash is
received within a few days of the trade date as described
above.
Alpha remains profitable, debt-free and extremely well
capitalised, with GBP52m in free cash immediately available on its
balance sheet, alongside over GBP90m in net assets. At a time when
many within our industry are adopting more defensive strategies,
our strong cash position has provided us with the financial
flexibility to continue acquiring new clients, whilst maintaining
our key strategic investments in new products and markets.
Dividend
Following the strong results for the year, the Board is pleased
to declare a final dividend of 8.0 pence per share. Subject to
shareholder approval, the final dividend will be payable to
Shareholders on the register at 16 April 2021 and will be paid on
14 May 2021.
B Share Growth Scheme
The Group has previously implemented the B Share Growth Scheme
pursuant to which B Shares were issued to certain full-time
employees of the Group. The B Share Growth Scheme is administered
and managed by the Board. The B Shares contain a put option, such
that, when and to the extent vested, they can be converted into
ordinary shares in the Company. The B Shares vest in five equal
tranches, occurring annually, starting on 31 December 2017 until 31
December 2021. The requirement for revenue growth of Alpha FX
Limited in the first three years was 30% per annum, whilst vesting
in years four and five requires 20% annual revenue growth.
Following the outbreak of COVID-19, the Group announced on 30
March 2020 that it was deferring the admission of 535,300 ordinary
shares that had vested under the B Share Growth Scheme for the year
ending 2019. These shares will now be issued to employees under the
B Share Scheme and are expected to be admitted to trading on 23
March 2021.
Since Alpha FX Limited achieved revenue growth in excess of 20%
in the year ended 31 December 2020, the fourth tranche of B Shares
has vested. Following careful consultation with employees, the
Company has chosen to defer the issuance of these shares to
employees under the B Share Growth by circa 12 months. The total
number of shares due to be issued in March 2022 is 648,921.
C Share Growth Scheme
The Group has previously implemented the C Share Growth Scheme
pursuant to which C shares were issued to certain full-time
employees of the Group. The C Shares contain a put option, such
that, when and to the extent vested, they can be converted into
ordinary shares in the Company.
The C Shares vest in five tranches, occurring annually on 31
December 2018, 31 December 2019, 31 December 2021, 31 December 2022
and 31 December 2023. The first and second tranches that have
vested were equal to 10% and 22.5% of the participant's C Share
entitlement and all remaining tranches are equal to 22.5% of the
participant's C Share entitlement. The requirement for revenue
growth is 25% in 2021, 20% in 2022 and 20% in 2023 in order for
vesting to occur. There was no revenue growth requirement for the
shares in respect of 2018 and 2019. From 2021, the gain that a C
Shareholder can receive is also capped through placing a ceiling on
the maximum market capitalisation of Alpha of GBP650m. The result
of doing so is that the C Shares will be entitled to a pro rata
share of the gain in market capitalisation of Alpha between the
hurdle price at the time of allotment and the market capitalisation
ceiling of GBP650m.
Following the outbreak of COVID-19, the Group announced on 30
March 2020 that it was deferring the admission of 287,573 ordinary
shares that had vested under the C Share Growth Scheme for the year
ending 2018 and 2019. These shares will now be issued to employees
under the C Share Scheme and are expected to be admitted to trading
on 23 March 2021.
Save As You Earn (SAYE) Scheme
The Group has received an exercise notice from an employee to
exercise options in respect of 2,403 shares pursuant to the
Company's Save As You Earn share scheme.
Based on the issue of shares pursuant to the B Share Growth
Scheme, C Share Growth Scheme and the SAYE Scheme, application has
been made for the 825,276 new ordinary shares of GBP0.002 each in
the Company (the "New Ordinary Shares") to be admitted to trading
on AIM. The new ordinary shares will rank pari passu in all
respects with the existing ordinary shares of the Company and will
be admitted to trading on or about 23 March 2021.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
Note GBP'000 GBP'000
Revenue 46,217 35,378
Operating expenses (29,457) (21,698)
Underlying operating profit 17,149 14,735
Exceptional property related costs - (558)
Share-based payments (389) (497)
Operating profit 4 16,760 13,680
Finance income 5 747 81
Finance expenses 5 (370) (216)
Profit before taxation 17,137 13,545
Taxation (3,333) (2,525)
Profit for the year 13,804 11,020
----------------------------------------- ----- ------------- -------------
Attributable to:
Equity holders of the parent 12,469 10,260
Non-controlling interests 1,335 760
----------------------------------------- ----- ------------- -------------
Profit for the year 13,804 11,020
----------------------------------------- ----- ------------- -------------
Other comprehensive income/(loss)
:
Exchange gains /(losses) arising
on translation of foreign operations 17 (3)
----------------------------------------- ----- ------------- -------------
Total comprehensive income for the
year 13,821 11,017
----------------------------------------- ----- ------------- -------------
Attributable to:
Equity owners of the parent 12,486 10,257
Non-controlling interests 1,335 760
----------------------------------------- ----- ------------- -------------
Total comprehensive income for the
year 13,821 11,017
----------------------------------------- ----- ------------- -------------
Earnings per share attributable
to equity owners of the parent (pence
per share)
- basic 6 31.7p 27.7p
- diluted 6 30.5p 26.9p
- underlying basic 6 32.8p 30.1p
- underlying diluted 6 31.6p 29.2p
Consolidated Statement of Financial Position
As at 31 December 2020
Company number: 07262416 As at As at
31 December 31 December
2020 2019
Note GBP'000 GBP'000
Non-current assets
Intangible assets 2,074 1,182
Property, plant and equipment 2,251 2,279
Right-of-use assets 8 6,945 7,750
Trade and other receivables 9 5,832 -
--------------------------------------- ----- ------------ ------------
Total non-current assets 17,102 11,211
--------------------------------------- ----- ------------ --------------
Current assets
Trade and other receivables 9 70,476 45,453
Cash and cash equivalents 10 82,972 73,960
Other cash balances 10 4,025 3,867
--------------------------------------- ----- ------------ --------------
Total current assets 157,473 123,280
--------------------------------------- ----- ------------ --------------
Total assets 174,575 134,491
--------------------------------------- ----- ------------ --------------
Equity
Share capital 11 80 74
Share premium account 50,582 31,388
Capital redemption reserve 4 4
Merger reserve 667 667
Retained earnings 35,631 22,932
Translation reserve 24 7
--------------------------------------- ----- ------------ --------------
Equity attributable to equity holders
of the parent 86,988 55,072
Non-controlling interests 3,653 2,499
--------------------------------------- ----- ------------ --------------
Total equity 90,641 57,571
--------------------------------------- ----- ------------ --------------
Current liabilities
Trade and other payables 12 74,310 68,056
Current tax liability 1,808 837
Provisions - 95
--------------------------------------- ----- ------------ --------------
Total current liabilities 76,118 68,988
--------------------------------------- ----- ------------ --------------
Non-current liabilities
Deferred tax liability 626 294
Lease liability 8 7,190 7,638
Total non-current liabilities 7,816 7,932
--------------------------------------- ----- ------------ --------------
Total equity and liabilities 174,575 134,491
--------------------------------------- ----- ------------ --------------
Consolidated Statement of Cash Flows
For the year ended 31 December 2020
Year ended Year ended
31 December 31 December
2020 2019
Note GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 17,137 13,545
Net finance (income)/expense (377) 135
Amortisation of intangible assets 496 248
Impairment of intangible assets 278 -
Depreciation of property, plant and
equipment 449 204
Depreciation of right-of-use assets 805 485
Initial recognition of discount relating 1,275 -
to the Norwegian client
Loss on disposal of fixed assets 1 47
Share-based payment expense 389 442
Provision utilised in year (95) (104)
(Increase)/decrease in other receivables (1,117) 236
Increase in other payables 10,972 32,146
(Increase) in derivative financial
assets (11,453) (9,815)
(Increase) in financial assets at (18,199) -
amortised cost
(Decrease)/increase in derivative
financial liabilities (4,691) 9,565
(Increase) in other cash balances (158) (1,304)
--------------------------------------------- ----- -------------------- ---------------
Cash (outflows)/inflows from operating
activities (4,288) 45,830
Tax paid (2,029) (2,468)
--------------------------------------------- ----- -------------------- ---------------
Net cash (outflows)/inflows from operating
activities (6,317) 43,362
--------------------------------------------- ----- -------------------- ---------------
Cash flows from investing activities
Payments to acquire property, plant
and equipment (425) (2,366)
Payments to acquire right-of-use assets - (165)
Proceeds from the sale of property,
plant and equipment 3 8
Expenditure on internally developed
intangible assets (1,666) (993)
Net cash outflows from investing activities (2,088) (3,516)
--------------------------------------------- ----- -------------------- -------------
Cash flows from financing activities
Dividends paid to equity owners of
the Parent Company - (2,524)
Dividends paid to non-controlling
interests (1,020) (1,088)
Issue of ordinary shares by Parent 19,281 -
Company
Share issue costs (81) -
Issue of ordinary shares by subsidiary 1 -
Payment of lease liabilities (775) (356)
Net interest (paid)/received (6) 83
Purchase of non-controlling interest
for cash - (394)
--------------------------------------------- ----- --------------------
Net cash inflows/(outflows) from financing
activities 17,400 (4,279)
--------------------------------------------- ----- -------------------- -------------
Increase in net cash and cash equivalents
in the year 8,995 35,567
Net cash and cash equivalents at beginning
of year 73,960 38,396
Net exchange gains / (loss) 17 (3)
--------------------------------------------- ----- -------------------- ---------------
Net cash and cash equivalents at end
of year 10 82,972 73,960
--------------------------------------------- ----- -------------------- ---------------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Attributable to the owners of the parent
Share Capital
Share premium redemption Merger Retained Translation Non-controlling
capital account reserve reserve earnings reserve Total interests Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2019 73 31,388 4 667 15,003 10 47,145 1,562 48,707
----------------- --------- -------- ----------- --------- ---------- ------------- -------- ---------------- --------
Profit for the
year - - - - 10,260 - 10,260 760 11,020
Other
comprehensive
loss - - - - - (3) (3) - (3)
Transactions
with owners
Shares issued
on vesting of
share option
scheme 1 - - - (1) - - - -
Issue of shares
to
non-controlling
interests in
subsidiary
undertakings - - - - - - - 1,426 1,426
Shares
repurchased
from
non-controlling
interests - - - - (248) - (248) (146) (394)
Forfeiture of
shares in
subsidiary - - - - - - - (15) (15)
Share-based
payments - - - - 442 - 442 - 442
Dividends paid - - - - (2,524) - (2,524) (1,088) (3,612)
----------------- --------- -------- ----------- --------- ---------- ------------- -------- ---------------- --------
Balance at 31
December 2019 74 31,388 4 667 22,932 7 55,072 2,499 57,571
----------------- --------- -------- ----------- --------- ---------- ------------- -------- ---------------- --------
Profit for the
year - - - - 12,469 - 12,469 1,335 13,804
Other
comprehensive
income - - - - - 17 17 - 17
Transactions
with owners
Issue of shares
to
non-controlling
interests in
subsidiary
undertakings - - - - - - - 1,089 1,089
Shares
repurchased
from
non-controlling
interests - - - - (185) - (185) (192) (377)
Shares issued
on vesting of
share option
scheme - 5 - - - - 5 - 5
Forfeiture of
shares in
subsidiary - - - - - - - (58) (58)
Shares issued
on placing 6 19,994 - - - - 20,000 - 20,000
Cost of shares
issued on
placing - (805) - - - - (805) - (805)
Share-based
payments - - - - 415 - 415 - 415
Dividends paid - - - - - - - (1,020) (1,020)
----------------- --------- -------- ----------- --------- ---------- ------------- -------- ---------------- --------
Balance at 31
December 2020 80 50,582 4 667 35,631 24 86,988 3,653 90,641
----------------- --------- -------- ----------- --------- ---------- ------------- -------- ---------------- --------
Notes to the Consolidated Financial Statements
For the year ended 31 December 2020
1 . General information
Alpha FX Group plc, (the 'Company') is a public limited company
having listed its shares on AIM, a market operated by The London
Stock Exchange, on 7 April 2017. The Company is incorporated and
domiciled in the UK (registered number 07262416) and its registered
office is Brunel Building, Canalside Walk, London, W2 1DG. The
consolidated financial statements incorporate the results of the
Company and its subsidiary undertakings, Alpha FX Limited, Alpha FX
Institutional Limited, Alpha Foreign Exchange (Canada) Limited,
Alpha FX Netherlands Limited and Alpha FX Europe Limited.
Statutory accounts for the year ended 31 December 2019 have been
delivered to the Registrar of Companies. The statutory accounts for
the year ended 31 December 2020 will be delivered to the Registrar
of Companies following the Group's Annual General Meeting.
The auditors' reports on the financial statements for 31
December 2020 and 31 December 2019 were unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
Basis of preparation
The consolidated financial statements have been prepared in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006.
The financial information set out above does not constitute
statutory accounts for the purposes of section 435 of the Companies
Act 2006, for the years ended 31 December 2020 and 31 December
2019, but is derived from those accounts.
The Directors have assessed the Group's projected business
activities and available financial resources together with detailed
forecasts for cash flow and relevant sensitivity analysis. The
directors believe that the Group remains well placed to manage its
business risks successfully. After making appropriate enquiries the
directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, the directors continue to adopt the going
concern basis in preparing the statutory accounts for the year
ended 31 December 2020.
The preparation of consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies
and reported amounts of assets, liabilities, income and expenses.
The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making judgements about the carrying value of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Accounting policies
The accounting policies adopted in these financial statements
are identical to those adopted in the Group's most recent annual
financial statements for the year ended 31 December 2019 except as
described below.
New standards that have been adopted in the annual financial
statements for the year ended 31 December 2020, but have not had a
significant effect on the Group are:
-- IAS 1 Presentation of Financial Statements and IAS 8
Accounting policies, Changes in Accounting Estimates and Error
(Amendment- definition of material); and
-- Revised Conceptual Framework for Financial Reporting.
Segment reporting
The revenue for the Group is generated through the sale of
forward currency contracts, foreign exchange spot transactions,
payments & collections and option contracts. The Group has four
reportable segments based on the individually reportable
subsidiaries and divisions.
In 2020, 38% of the Group's revenue derived from within the UK.
Details of segmental reporting are shown in note 3.
3. Segmental reporting
During the year the Group generated revenue from the sale of
forward currency contracts, option contracts, foreign exchange spot
transactions and fees received from payments, collections and
currency accounts.
The Group has four reportable segments under the provisions of
IFRS 8, based on the individually reportable
subsidiaries and divisions. These four segments are:
-- Corporate London represents revenue generated by Alpha FX
Limited's Corporate clients serviced from the London head office.
It also includes Alpha FX Netherlands Limited, which has been
trading since April 2020 and services Corporate clients from
Amsterdam, The Netherlands.
-- Institutional represents revenue from Alpha FX Institutional
Limited, which primarily services funds.
-- Corporate Toronto represents revenue generated by Alpha
Foreign Exchange (Canada) Limited, serviced from Toronto,
Canada.
-- Alpha Platform Solutions (formerly Alpha Payment Solutions)
is a division of Alpha FX Limited which services clients who have
the requirement to send, hold or receive money from overseas, in
the form of international payments, collections and currency
accounts.
The chief operating decision makers, being the Group's Chief
Executive Officer and the Chief Financial Officer, monitor the
operating results of the business segments separately each month.
Key measures used to evaluate performance are revenue and profit
before taxation. Management believe that these measures are the
most relevant in evaluating the performance of the segment and for
making resource allocation decisions.
2020 Corporate Institutional Corporate Alpha Total
London Toronto Platform
Solutions
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ----------- --------------- ----------- ----------- --------
FX hedging* 21,392 4,277 1,788 - 27,457
Spot and payments transactions** 6,694 4,497 343 7,226 18,760
---------------------------------- ----------- --------------- ----------- ----------- --------
Total revenue 28,086 8,774 2,131 7,226 46,217
---------------------------------- ----------- --------------- ----------- ----------- --------
Underlying operating profit 9,409 4,612 181 2,947 17,149
---------------------------------- ----------- --------------- ----------- ----------- --------
Share-based payments (383) (6) - - (389)
Finance costs (276) (52) - (42) (370)
Finance income 747 - - - 747
---------------------------------- ----------- --------------- ----------- ----------- --------
Profit before taxation 9,497 4,554 181 2,905 17,137
---------------------------------- ----------- --------------- ----------- ----------- --------
2019 Corporate Institutional Corporate Alpha Platform Total
London Toronto Solutions
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ----------- --------------- ----------- --------------- --------
FX hedging* 21,422 4,829 795 - 27,046
Spot and payment transactions** 5,795 1,457 60 1,020 8,332
------------------------------------ ----------- --------------- ----------- --------------- --------
Total revenue 27,217 6,286 855 1,020 35,378
------------------------------------ ----------- --------------- ----------- --------------- --------
Underlying operating profit/(loss) 12,624 3,635 (664) (860) 14,735
------------------------------------ ----------- --------------- ----------- --------------- --------
Share-based payments (466) (31) - - (497)
Finance costs (193) (15) - (8) (216)
Finance income 81 - - - 81
Exceptional property related
costs*** (555) (3) - - (558)
------------------------------------ ----------- --------------- ----------- --------------- --------
Profit/(loss) before taxation 11,491 3,586 (664) (868) 13,545
------------------------------------ ----------- --------------- ----------- --------------- --------
*FX hedging represents revenue derived from clients hedging
cashflows for a commercial purpose using both foreign exchange
forward transactions and option contracts.
** Spot and payments transactions relate to foreign exchange
spot transactions and fees received from payments, collections and
currency accounts.
***Exceptional items in the prior year relate to initial double
running and move related costs following the signing of a lease for
new premises for the Group's Head Office.
4. Operating profit
Operating profit is stated after charging:
31 December 31 December
2020 2019
GBP'000 GBP'000
------------------------------------------ ------------ ------------
Depreciation of owned property, plant
and equipment 449 204
Amortisation of internally generated
intangible assets 496 248
Depreciation of right-of-use assets 805 485
Rental costs for short term leases 286 587
Loss on disposal of fixed assets 1 47
Staff costs 16,175 12,804
Estimated probability of default in
relation to Norwegian client 270 -
Initial recognition of discount relating
to the Norwegian client* 1,275 -
Net foreign exchange losses 711 38
Exceptional property related costs - 558
Audit fees
Audit fees in respect of the Group
and Company financial statements 110 78
Audit fees in respect of the subsidiary
accounts 71 65
Non-Audit fees
Other assurance services - 3
*The provision of GBP1,275,066 (2019: GBPnil) represents the
initial recognition of the difference between the nominal value of
future payments from the Norwegian client and their net present
value. As the provision unwinds, the reversal is recorded within
finance income, GBP712,639 (2019: GBPnil) was reversed in the year,
as a result, the net impact in the consolidated statement of
comprehensive income in the year was a charge of GBP562,427 (2019:
GBPnil). This balance will reverse in full in finance income as the
remaining repayments are received in the period to June 2022.
5. Finance income and expenses
31 December 31 December
2020 2019
GBP'000 GBP'000
----------------------------------------- ------------ ------------
Finance income
Interest on bank deposits - 62
Other interest receivable 34 19
Finance income to reverse the -discount
relating to the Norwegian client
(note 4) 713 -
----------------------------------------- ------------ ------------
Total 747 81
----------------------------------------- ------------ ------------
Finance costs
Interest on bank deposits (43) -
Finance cost on lease liabilities
(note 8) (327) (216)
Total (370) (216)
----------------------------------------- ------------ ------------
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
for the year attributable to equity holders of the parent, by the
weighted average number of ordinary shares in issue during the
financial year. Diluted earnings per share additionally includes in
the calculation, the weighted average number of ordinary shares
that would be issued on conversion of any dilutive potential
ordinary shares. The dilutive effect is calculated on the full
exercise of all potentially dilutive Ordinary share options granted
by the Group.
The Group additionally discloses an underlying earnings per
share calculation that excludes the impact of share-based payments,
non-recurring costs and their tax effect, which better enables
comparison of financial performance in the current year with
comparative years.
31 December 31 December
2020 2019
pence pence
---------------------------- ------------ ------------
Basic earnings per share 31.7p 27.7p
Diluted earnings per share 30.5p 26.9p
Underlying - basic 32.8p 30.1p
Underlying - diluted 31.6p 29.2p
The calculation of basic and diluted earnings per share is based
on the following number of shares:
31 December 31 December
2020 2019
No. No.
--------------------------------- ------------ ------------
Basic weighted average shares 39,286,578 36,990,813
Contingently issuable shares 1,541,006 1,093,530
--------------------------------- ------------ ------------
Diluted weighted average shares 40,827,584 38,084,343
--------------------------------- ------------ ------------
The earnings used in the calculation of basic, diluted and
underlying earnings per share are set out below:
31 December 31 December
2020 2019
GBP'000 GBP'000
----------------------------------------- ------------ ------------
Profit after tax for the year 13,804 11,020
Non-controlling interests (1,335) (760)
----------------------------------------- ------------ ------------
Earnings - basic and diluted 12,469 10,260
Exceptional property related costs - 558
Tax effect - (96)
Share-based payments 389 497
Taxation impact on share-based payments 136 (81)
----------------------------------------- ------------ ------------
Earnings - underlying 12,994 11,138
----------------------------------------- ------------ ------------
7. Dividends
31 December 31 December
2020 2019
GBP'000 GBP'000
-------------------------------------- ------------------------ ------------
Final dividend for the year ended 31
December 2018 of
4.6p per share - 1,708
Interim dividend for the year ended
31 December 2019 of
2.2p per share - 816
-------------------------------------- ------------------------ ------------
- 2,524
--------------------------------------------------------------- ------------
All dividends paid are in respect of the ordinary shares of
GBP0.002 each.
On 30 March 2020 the Company announced that the Board had
decided to cancel payment of the final dividend for the year ended
31 December 2019 that was due to be paid on 13 May 2020.
The Directors propose that a final dividend in respect of the
year ended 31 December 2020 of 8.0p per share amounting to
GBP3,209,885 14 May 2021 to all shareholders on the register of
members on 16 April 2021. This dividend is subject to approval by
shareholders at the AGM and has not been included as a liability in
these Financial Statements in accordance with IAS 10 'Events after
the reporting period'.
8. Right-of-use assets and lease liabilities
In May 2019, the Group signed a ten-year lease for the Head
Office Premises in London expiring in May 2029. The rent is subject
to a rent review after five years and the lease does not contain
any break clause. The incremental borrowing rate used to discount
lease liabilities at initial inception is based on the assessment
of management of 4.5%.
Right-of-use assets
31 December 31 December
2020 2019
GBP'000 GBP'000
---------------------------------- ------------ ------------
At 1 January 7,750 -
Additions - 8,235
Depreciation charge for the year (805) (485)
---------------------------------- ------------ ------------
At 31 December 6,945 7,750
---------------------------------- ------------ ------------
Lease liabilities
31 December 31 December
2020 2019
GBP'000 GBP'000
---------------------- ------------ ------------
At 1 January 7,931 -
Additions - 8,071
Finance cost 327 216
Payments in the year (775) (356)
---------------------- ------------ ------------
At 31 December 7,483 7,931
---------------------- ------------ ------------
Analysis:
Current (note 12) 293 293
Non-current 7,190 7,638
------------------------- ------ ------
Total lease liabilities 7,483 7,931
------------------------- ------ ------
9. Trade and other receivables
31 December 31 December
2020 2019
Current: GBP'000 GBP'000
----------------------------------------- ------------ ------------
Trade receivables (derivative financial
assets) 53,992 42,539
Financial assets at amortised cost 11,804 -
Other receivables 3,335 2,434
Prepayments 1,345 480
----------------------------------------- ------------ ------------
70,476 45,453
Non-current:
Financial assets at amortised cost 5,832 -
----------------------------------------- ------------ ------------
Total trade
and other
receivables 76,308 45,453
----------------------------------------- ------------ ------------
Trade receivables represent the fair value of derivative
financial assets arising as a result of matched principal
transactions. At 31 December 2020 and 31 December 2019, the
receivables are shown net of the Credit Value Adjustment.
10. Cash
Cash and cash equivalents comprise cash balances and deposits
held at call with banks.
Other cash balances comprise cash held as collateral with
banking counterparties for which the Group does not have immediate
access.
31 December 31 December
2020 2019
GBP'000 GBP'000
-------------------------------------------- ------------ ------------
Cash and cash equivalents 82,972 73,960
Variation margin called by counterparties* 17,734 1,127
Other cash balances 4,025 3,867
-------------------------------------------- ------------ ------------
Total cash 104,731 78,954
-------------------------------------------- ------------ ------------
Cash balances included within derivative financial assets relate
to the variation margin called against out of the money trades with
banking counterparties.
*Included within trade receivables and trade payables
11. Share Capital
At 31 December At 31 December
2020 2019
No. GBP'000 No. GBP'000
----------------------------- ----------- -------- ----------- --------
Authorised, issued and
fully paid
Ordinary shares of GBP0.002
each 40,123,568 80 37,123,956 74
----------------------------- ----------- -------- ----------- --------
Number of shares Ordinary
shares
-------------------------------------------------- -----------
At 1 January 2019 36,545,968
Shares issued on vesting of share option schemes 577,988
-------------------------------------------------- -----------
At 31 December 2019 37,123,956
-------------------------------------------------- -----------
Shares issued on vesting of share option schemes 58,435
Shares issued on placing 2,941,177
-------------------------------------------------- -----------
At 31 December 2020 40,123,568
-------------------------------------------------- -----------
The following movements of share capital occurred during the
year ended 31 December 2020:
On 9 April 2020, the Company issued 2,941,177 new shares
following a placing.
On 18 August 2020, the Company issued 1,038 new shares in
respect of shares issued following the early exercise by an
employee of the SAYE share scheme.
On 17 September 2020, the Company issued 57,397 new shares
following the exercise of the unapproved share option scheme.
The following movements of share capital occurred during the
year ended 31 December 2019:
On 26 March 2019, the Company issued 576,442 new shares
following the vesting of shares under the B Growth Share
Scheme.
On 25 April 2019, the Company issued 1,546 new shares in respect
of shares exercised following the initial vesting of shares under
the C Growth Share Scheme for the year ended 31 December 2018.
12. Trade and other payables
31 December 31 December
2020 2019
GBP'000 GBP'000
-------------------------------------- ------------ ------------
Trade payables (derivative financial
liabilities) 17,591 22,282
Other payables 51,621 41,873
Other taxation and social security 974 1,084
Lease liability (note 8) 293 293
Accruals 3,831 2,524
-------------------------------------- ------------ ------------
74,310 68,056
-------------------------------------- ------------ ------------
Trade payables represent the fair value of derivative financial
liabilities arising as a result of matched principal
transactions.
Other payables consist of margin received from clients and
client held funds. The carrying value of trade and other payables
classified as financial liabilities measured at amortised cost,
approximates fair value.
13. Events after the reporting period
On 17 March 2020, the Company determined that following the
vesting of shares under the Growth Share Scheme for the year ended
31 December 2019, it would be issuing 822,873 shares on or around
31 March 2020. Due to the impact of COVID-19, the issuing of these
shares was deferred and will now be issued on or around 22 March
2021.
Following the vesting of the B Growth Share Scheme for the year
ended 31 December 2020, the Company will be issuing 648,921 shares
in March 2022.
As part of a settlement agreement to a former employee of Alpha
Institutional Limited, the Company will be issuing circa 12,800
shares, the number will be finalised once the audit of Alpha FX
Institutional Limited has been completed and the shares will be
issued shortly thereafter.
Additionally, as part of the SAYE scheme, 2,403 shares will be
issued to a former employee on or around 22 March 2021.
14. Availability of Annual Financial Report
The Group notes that the Annual Report & Accounts for the
year ended 31 December 2020 will be posted to Alpha FX shareholders
in the second week of April 2021. The document will also be
available on the Group's website at www.alphafx.co.uk and in hard
copy at Brunel Building, 2 Canalside Walk, London, W2 1DG.
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