Ask any great investor and they’ll almost certainly say their best returns have been generated from being patient. Holding on to winners that benefit from secular trends, especially if they're unfortunately caught up in short term macro noise.
Here, the two key questions to ask are: 1) Is the market opportunity still substantial? And 2) Is the company well placed to take advantage?
For me, the answer remains a resounding yes for international payments platform Finseta - who this morning released robust H1 top line growth with sales rising 16% LFL to £5.9m (£5.1m LY) on the back of investments in new products, higher customer count and overseas expansion.
Nonetheless since President Trump’s Liberation day tariffs were introduced on 2nd April, the associated uncertainty has delayed some overseas purchases (of say property) by #FIN’s clients (HNWIs 42% of revs). Thus impacting H1 product mix and gross margins (down 3% to 62.7%), alongside EBITDA (£0.3m vs £0.8m LY) and H2 guidance. With FY25 turnover now anticipated to come in at £12.6m (or up 11%) against Shore Capital Markets’ previous forecast of £15.0m. Representing H2’25 turnover of £6.75m (+7%) compared to £6.3m in H2’24.
Importantly though, this ‘bump in the road’ does not affect #FIN’s long term trajectory. Indeed once business and investment confidence returns, then I’d expect growth rates to re-accelerate strongly. Driven not only by new customer acquisition (H1’25 up +15.6% YoY to 1,101, and +4.0% since Dec’24), product launches (eg agency banking cards, solutions, mass payments, etc) and expansion abroad (Canada & Dubai). But also from those recently onboarded clients who have yet to transact (re deferred purchases). Plus at 22p, the stock trades on a modest 1.2x EV/sales multiple, which looks far too cheap for a rapidly expanding fintech business with a scalable & proprietary forex platform.
CEO James Hickman commenting: “This has been another period of significant strategic delivery for Finseta. We have invested in several initiatives that are diversifying our revenue streams and position us for sustainable growth. We are already experiencing the benefits of this strategy, which is set to accelerate our sales and increase our profit in the medium term. While our revenue growth has been constrained by global macroeconomic factors, it is pleasing to see more positive momentum as we progress through H2, albeit to a lesser extent than initially expected. In addition, we are particularly excited about the prospects for our Dubai operation, which is performing ahead of our expectations and will make an important contribution to our expected revenue growth for the full year. Accordingly, with the foundations of our business having been further enhanced, we remain confident in our ability to deliver sustained value for our shareholders.”
Lastly net cash closed Jun'25 at £0.4m vs £0.6m Dec’24.