TIDMFFX
RNS Number : 4614F
FAIRFX Group PLC
21 February 2018
21 February 2018
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF
AMERICA, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, NEW
ZEALAND, JAPAN, THE REPUBLIC OF IRELAND, OR ANY JURISDICTION WHERE
TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
FairFX Group plc
("FairFX" or "the Group" or "the Company")
Acquisition of City Forex Limited
FairFX, the low-cost multicurrency payments and banking service,
is pleased to announce that it has acquired the entire issued
ordinary share capital of City Forex Limited ("City Forex") for a
consideration of GBP6 million payable in cash ("Acquisition").
The Acquisition is a further milestone in the evolution of
FairFX and is expected to be immediately earnings enhancing.
Furthermore, it fits with FairFX's stated core growth themes,
namely extracting increasing economies of scale whilst adding
product innovation.
City Forex's service offering is primarily focused on two key
products, International Payments and Travel Currency, which is
accessible to both business and consumer segments through its
proprietary platform and its three central London based branches
respectively.
Its high-quality customer base includes business customers that
range from City-based businesses to SMEs around the UK. The City
Forex International Payments division services approximately 2,000
business and 8,000 private client customers.
Within its Travel Currency division, City Forex fulfils almost
200,000 currency orders per annum across a number of supply
verticals, including walk-in retail trade, the servicing of
employee discount schemes, corporate accounts and supply
partnerships such as that undertaken with FairFX.
City Forex has been a partner of FairFX since 2007 and provides
the operations for FairFX's Travel Currency service - which is a
key component of attracting and then retaining customers for
FairFX. One of the benefits of combining the two companies is that
the enlarged Group will control the entire supply chain for the
Travel Currency service. In addition, City Forex's large and
growing International Payments business is expected to provide
economies of scale from banking partners when combined with
existing FairFX volumes.
City Forex has built an innovative proprietary system that
processes both the Travel Currency and International Payments
businesses with a high degree of automation. The system will be
combined with FairFX's existing platform to yield further
efficiencies for the Group as well as increased capacity for
growth. Furthermore, the City Forex platform has a customer-facing
portal offering "self-serve" international payments to corporates
at bespoke spreads (approximately 40% of City Forex business is
conducted this way), which is a capability that FairFX was planning
to add in 2018. The end-to-end nature of the platform, covering
customer interface all the way through to automated settlement,
represents a significant jump forward in functionality and
efficiency for the Group.
The opportunities for revenue enhancement for the Group from
cross-selling FairFX products to City Forex customers are
considerable, particularly for the FairFX Corporate Expense Card
and Platform. In addition, it is FairFX's intention to utilise its
existing infrastructure and marketing methodology to engage with
the City Forex customer base.
For the 12 months ended 31 October 2017, City Forex made revenue
of GBP4.4 million from turnover of GBP570 million which generated
an EBITDA (pre-exceptional items) of GBP0.7 million, a PBT of
GBP0.3 million and had assets, excluding client cash and grossed up
debtors and creditors, of GBP4.1 million.
The consideration of GBP6 million (which is subject to
adjustments for cash and working capital and is on a cash-free,
debt-free basis) will be paid from existing FairFX cash resources.
The initial consideration for the Acquisition is GBP5.25 million
with the remaining consideration of GBP0.75 million paid nine
months after completion.
The Company has received Financial Conduct Authority approval
for the change of control of City Forex Limited.
Ian Strafford-Taylor, Chief Executive Officer, commented: "The
acquisition of City Forex is a key milestone in the evolution of
FairFX and will immediately enhance the Group's earnings. City
Forex is a long-standing partner of FairFX, we know the Company and
its people well and we are delighted to welcome them into the
FairFX Group. This transaction fits perfectly with our stated
strategy as it increases our scale, rationalises our supply chain
and brings their innovative system within the Group."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
ENDS
FairFX Group plc
Ian Strafford-Taylor,
CEO +44 (0) 20 7778 9308
Cenkos Securities plc
Max Hartley/Callum Davidson +44 (0) 20 7397 8900
Yellow Jersey PR
Charles Goodwin +44 (0) 7747 788 221
About FairFX
FairFX is a leading challenger brand in banking and payments
that disintermediates the incumbent banks with a superior user
experience and low cost operating model. This enables personal and
business customers to make easy, low-cost multi-currency payments
in a broad range of currencies and across a range of FX products
all via one integrated system. The FairFX platform facilitates
payments either direct to Bank Accounts or at 30 million merchants
and over 1 million ATM's in a broad range of countries globally via
Mobile apps, the Internet, SMS, wire transfer and MasterCard/VISA
debit cards.
FairFX provides banking and payment services to both personal
and business customers through four channels: Currency Cards,
Physical Currency, International Payments and Bank Accounts. The
Currency Card and Physical Currency offerings facilitate multiple
overseas payments at points of sale and ATM's whereas the
International Payments channel supports wire transfer foreign
exchange transactions direct to Bank Accounts. For Corporates,
FairFX has a market-leading business-expenses solution based around
its corporate prepaid platform and card that can yield significant
savings on a Corporate's procurement through better controls and
improved transparency and also streamline the procurement process
thus saving administrative costs. Through the recent acquisition of
CardOne, FairFX now has the capability to offer retail and business
Bank Accounts with all the functionality you would expect from a
Bank, namely faster payments, BACs, direct debits, international
payments and a debit card.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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