OFX Group (OFX) – formerly known as Ozforex – shares plunged yesterday after it joined the growing list of companies issuing surprise profit warnings. In its case the lower results are for the year to March 31.
Investors hammered shares in listed foreign exchange punter/provider OFX Group (OFX) yesterday after it confessed to having been caught up in the backwash of the surge in market volatility since the June 23 Brexit vote.
Dump of the day was OzForex (OFX) whose shares plunged 42% after the foreign exchange trading company revealed that the marriage bans with Western Union has ended – and, oh, there’s an earnings downgrade.
Newly listed OzForex Group (OFX) has hit the ground running. Brokers are attracted to the medium-term growth profile as well as a strong balance sheet. The company engages in online payment services and international money transfer. This is a market that is growing rapidly and the size of the payments are increasing because of increased trade, foreign investment and cross-border movement of individuals. Online commerce is becoming sophisticated, and companies and individuals are attracted to the ability to assess the competitiveness of the options they have – online.
FY16 earnings were in line with guidance. Deutsche Bank notes FY17 guidance is for strong revenue growth and earnings to be higher than FY16. Reduced margins are expected in the first half because of increased marketing investment, with margins expected to improve in the second half.