GCIFinseta sees revenue surge and profit rise in H1 amid strategic expansion
Delivering market share gains, strong organic growth, and rising profit margins are signs of a quality business.
This is the case for forex and international payments platform () who today posted record H1'24 numbers and in-line guidance, with adjusted EBITDA and EPS coming in at £0.8m (vs £0.2m H1'23) and 0.79p (0.06p) respectively on the back of a 40% YoY jump in turnover to £5.1m (£3.6m H1'23 & £6.0m H2'23), or 54% LFL if discontinued 'white label' activities are excluded.
In comparison, the global cross-border payments industry is projected by Juniper to rise at 5.6% CAGR between 2021-28 with challenger fintech providers like Finseta continuing to take share from the traditional money-centre banks.
What's more, net funds closed June at £0.6m (post £2.2m of 6.0% Jul'26 loan notes) after generating £0.8m (£0.1m) of cashflow in H1'24, thanks to greater economies of scale, higher gross margins (65.7% vs 61.0%) and prudent capital allocation.
You see, when you have a winning strategy, it's important to stick to it - combining just the right blend of offence and discipline.
Here Finseta has not only expanded its client base (+9% to 952 active accounts vs 874 H1'23), average transaction values (+29%), introducer network, geographical footprint (Canada), currency coverage (140 vs 58), commercial teams and product portfolio.
But also judiciously balanced this by investing in its bank-grade infrastructure, personalised customer service, regulatory checks, AI-powered monitoring, staff productivity and partners - to me a perfect mix of ambition and controlled expansion (c. >90% spot rates), which is both sustainable and self-financing.
So what does this all mean?
Well not surprisingly, Finseta remains firmly on track to hit its FY'24 expectations, with Shore Capital (target price 70p/share) forecasting £1.9m of adjusted EBITDA (+6%) on revenues up 20% to £11.5m, and ending Dec'24 with £1.4m of net funds.
Further out, the Board's ultimate goal is to build a £100m+ revenue group by adding more overseas jurisdictions (UAE and Hong Kong), new products and M&A. If I'm correct, then in 3-5 years 's valuation could be many multiples higher than the current £25m mrkcap (at 43p).
CEO James Hickman commenting "H1 has been a period of significant growth... expanding our introducer network and payments capabilities, while maintaining a high level of customer service. We have increased the number of active customers and average transaction value - signed an agreement with Mastercard to launch a corporate card scheme and received regulatory approval in Canada where we are in the process of launching a full-service office.
Looking ahead, the strong trading momentum that was experienced during H1’24 has been sustained into H2 and we are on track to report significant growth for FY’24, in line with the Board’s expectations. The Board continues to look to the future with great confidence."
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