Alpha Group: fintech reports growth as it eyes premium listing in 2024

UK fintech Alpha Group has reported strong profit and revenue growth as it eyes a move to the premium segment of the market.

Alpha said pre-tax profit surged 148 per cent to £116m during its full financial year 2023 while underlying profit before tax grew 11 per cent to £43m. Additionally, revenue climbed 12 per cent to £110.4m, up from £98.3m in 2022.

The ‘financial solutions’ provider also recorded operating income from interest on client balances of over £73m, up from just over £9m in 2022. This helped Alpha fatten its coffers, with net cash more than doubling from £64m to £179m.

AIM-listed Alpha said it expects to complete a move to a listing on the premium segment of the main market in 2024. It describes itself as “half fintech, half consultancy”.

The stock jumped over five per cent at the opening bell on Wednesday as investors cheered the earnings update.

Liberum has rated Alpha a ‘buy’. Analysts at the investment bank said: “The market continues to underestimate the strength of Alpha’s business model and the cash generation that results.

“A distinct strategy and culture and a strong balance sheet will allow Alpha to exploit the unbundling of the banking value chain, sustaining growth and margins.”

Morgan Tillbrook, founder and chief executive, said he was delighted with the group’s performance, but, “at the same time, the interest rate tailwinds that generated such exceptional bottom line growth proved frustrating for our underlying business, stymying its pace of growth”.

“The growth of our FX Risk Management (FXRM) division reduced somewhat at our own discretion, particularly where our considered credit appetite and high selling standards saw us walk away from a number of revenue opportunities,” Tillbrook added.

Alpha’s average revenue per FXRM client grew seven per cent although client numbers only increased by two per cent amid “a difficult macro-economic environment”.

“Our reputation has been built on high-quality, sustainable growth, and we will not compromise that for short-term gains, even when the business environment is more challenging,” he said.