Another day, another impressive trading update from Argentex (AGFX), a specialist provider of foreign exchange and epayment services to corporates, asset managers and high new worth (HNW) individuals.
Today the company said that turnover for the 9 months ending December 22 had leapt 63% on a like-for-like basis to £41m thanks to a 12% increase in its customer base - it now boasts 1,595 clients - alongside “robust trading across all products and geographies”. That was driven by forex volatility, international growth in Amsterdam and Australia, optimisation of the product mix (including structured solutions) and strong online demand, where client numbers jumped 65%.
Indeed this is the first in a suite of technology-enabled products to be launched, providing improved efficiency and the "right tech, right touch" for institutions and corporates. Moreover, the Board will also continue investing in its “people and overseas expansion”.
Broker Singer has lifted its target price to 197p a share (from 160p previously) after similarly increasing 2023 sales, EBITDA & EPS forecasts to £60.0m, £17.5m and 9.0p, respectively, climbing to £74.0m, £22.8m and 12.0p 12 months later.
At the current price of 132p, this leaves the shares trading on undemanding 2023 EV/EBITDA, EV/EBIT and PE multiples of 7.1x, 9.0x & 14.7x, respectively. That represents a 40%-50% discount to the broader sector, undeserved given Argentex's projected 19% underlying top-line growth rate this year.
CEO Harry Adams commented: "I'm delighted to report a record year for Argentex, defined by a 63% increase in revenues and strong client growth. Our focused three pillared growth strategy is delivering results across all business units as we unlock long-term sustainable growth potential."
"There is clear momentum behind our business and we are pleased that the investments we have made over recent years have enabled us to again exceed market expectations. Our outlook and focus on sustainable, diversified growth remains unchanged and, whilst remaining vigilant of the current macroeconomic backdrop, we look forward to the year ahead with confidence."
FY22 results are due out in April.