Finseta reports 26% revenue growth and strategic milestones in FY24 update
Investing in powerful secular themes is a marvellous way of making money - such as within generative AI, GPL-1 anti-obesity drugs, cloud software, cyber security, and fintech. The latter in particular is disrupting the traditional banking model as new challengers gain market share.
Here leading the cross-border payments charge are the likes of PayPal and Wise in consumer, and AlphaFX and Equals for corporates.
Indeed, for investors it's critical to distinguish between these two approaches. The B2C space is far more price-conscious, focusing on lower value, money transfers and simple purchases; whereas the business community tends to require more complex, higher value and customised solutions, often involving specialist 'white glove' services. In fact, it's not too dissimilar to having one's own outsourced treasury function.
Alongside ALPA (trading on 10.6x EBITDA) and EQLS (11.2x EBITDA), another equally fast growing, yet much cheaper UK-listed stock operating in international payments is
( ) , offering tailored forex solutions (>90% spot rates) to both SMEs (41% revenues) and sophisticated HNWIs (59%).Today, it reported record numbers and in-line guidance with adjusted FY'24 EBITDA and net cash coming in at £2.0m (vs £1.7 LY) and £0.6m (£0.2m) respectively, thanks to improved gross margins (65.5% vs 63.4%) and a 19% YoY jump in turnover to £11.4m (£5.1m H1 vs £6.3m H2), or 26% LFL if discontinued 'white label' activities are excluded.
Here has not only expanded its client base (+16.8% to 1,059 active accounts), average transaction values, introducer network, geographical footprint (eg Canada), commercial teams, and product portfolio (re mass payments, solutions and cards) - but also balanced organic growth by investing in its bank-grade infrastructure, regulatory checks, AI-powered monitoring, staff productivity, and partners.
Looking ahead, Shore Capital (target price 70p/share) is forecasting FY'25 £3.2m of adjusted EBITDA (+60%) on revenues, up 26% LFL to £14.1m. Moreover, I understand
has enjoyed an 'outstanding start' to January after experiencing a quieter Q4, possibly reflecting client caution due to the Autumn Budget.Further out, the Board's ultimate goal is to create a £100m+ revenue group by adding more overseas jurisdictions (Dubai and Hong Kong), new products and M&A. If achieved,
's valuation could eventually be many multiples higher than the current £25m mrkcap, equivalent to a modest FY'25 EV/EBITDA of 7.6x.CEO James Hickman commenting: "2024 has been a milestone year as we undertook several significant strategic initiatives while continuing to deliver strong growth. We have expanded our offering, our sales team and our introducer network resulting in an increased number of customers. This has enabled us to achieve growth in all key financial metrics. Accordingly, we have entered 2025 with confidence and we look forward to reporting on further progress."
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