Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Alpha Group describes strong 2023 performance
(Sharecast News) - Alpha Group International reported a strong financial performance 2023 in a trading update on Thursday. The AIM-traded firm's unaudited figures showed a 12% increase in revenue to £110m, with profit before tax soaring more than 140% to £115m.
Underlying profit before tax grew 10% to around £42 million, as the company maintained a consistent profit margin of 39%.
Its balance sheet strengthened, with adjusted net cash rising by over £60m to more than £177m.
Alpha Group highlighted its diversification strategy's success, yielding resilient revenue and robust profit growth.
It also emphasised a disciplined credit and risk approach, resulting in its lowest client default levels in five years.
Strategic investments led to operational efficiencies, and hiring focused primarily on the front office, the board explained.
Key initiatives in 2023 included the launch of a fund finance division in May, the establishment of new corporate FXRM offices in Madrid and Munich, and the acquisition of Cobase in December.
The company acknowledged challenges from the interest rate environment and macroeconomic uncertainties throughout the year.
While the third quarter presented difficulties, Alpha said it ended the year positively with record revenue in the fourth quarter.
Despite potential macroeconomic challenges in 2024, the firm said it was confident in its strategy.
In the FX risk management (FXRM) sector, conservative client hedging and credit appetite amid uncertain economic conditions posed challenges.
However, diversification efforts, including growth in institutional FXRM and overseas offices, mitigated issues in the UK corporate business.
Alpha Group said it expected growth prospects in FXRM for 2024, with investments positioning the division for success.
In alternative banking, reduced deal activity affected account growth, but revenue increased 18% to £34m.
The division generated over £73m in other operating income from interest on client balances, indicating optimism for future prospects.
Alpha Group's fund finance offering, launched in May, had a successful start, with plans to leverage cross-selling opportunities.
The acquisition of Cobase in December expanded the company's product portfolio and client base, particularly among medium to large corporates.
Alpha said it was aiming to maximise synergies between the two businesses in the long term.
"Despite a challenging trading environment in 2023, our team has continued to work hard to deliver profitable revenue growth, whilst also making excellent progress on our long-term growth strategy," said chief executive officer Morgan Tillbrook.
"At the same time, our previous diversification into alternative banking has enabled us to benefit from exceptional levels of interest income.
"Whilst we have opted to exclude these numbers from our underlying profit for transparency, the fact remains that this is very much a by-product of our diversified business model and is providing us with transformative levels of capital from which we can significantly enhance our long-term growth prospects."
Tillbrook said the company had already started to show that in 2023 with the acquisition of Cobase, the launch of its new fund finance division, and new offices in Spain and Germany.
"The higher interest rate environment has created economic headwinds which have impacted our underlying revenue momentum.
"However, the additional operating income of over £73m that we have generated as a result of this same environment has more than compensated for this, and highlights the resilience of our diversified business model.
"In simple terms, 2023 showed that in a higher interest rate environment, underlying growth becomes more challenging, but the cash and statutory profit from interest income becomes exceptional - a trade-off that, in reality, creates significant opportunities for Alpha's long-term growth prospects."
At 1420 GMT, shares in Alpha Group International were down 3.55% at 1,630p.
Reporting by Josh White for Sharecast.com.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.