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• Revenue: GBP 23.9 million, 4% behind the prior year.

• Gross Margin: Consistent year-on-year at 72%.

• EBITDA: Dropped from GBP 7.2 million last year to GBP 0.7 million.

• Staff Costs: Headcount increased by 30% year-on-year.

• Investment in Australia and Dubai: GBP 1.3 million versus GBP 400,000 last year.

• Free Cash Flow: GBP 2.2 million.

• Equity Raise: GBP 3 million in May.

• Closing Net Cash: GBP 23.5 million.

• Segregated Client Funds: GBP 24.7 million.

• Required Cash by Regulation: Just over GBP 16 million.

• Warning! GuruFocus has detected 7 Warning Signs with AGXTF.

Release Date: September 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Argentex Group PLC (AGXTF) is making significant progress in product diversification, geographic expansion, and operational excellence.

• The company is ahead of schedule in Dubai and on track to start operations in Australia soon.

• Despite a weak Q1, the company saw improved momentum in Q2 and expects this to continue.

• Argentex Group PLC (AGXTF) has maintained a strong balance sheet with a net cash position of GBP23.5 million.

• The company is focused on rigorous cost control and investing only in areas that can drive sustainable and reliable profitability.

Negative Points

• Revenues for the first half of the year were GBP23.9 million, 4% behind the prior year.

• The company experienced a significant drop in reported EBITDA from GBP7.2 million last year to GBP0.7 million.

• There were GBP1.4 million in one-off restructuring charges impacting the first half of the year.

• Increased headcount by 30% year-on-year has led to higher staff costs.

• The mix of spots and forwards has changed, impacting revenue as spots generate less money than forwards.

Q & A Highlights

Q: How does Argentex Group PLC's revenue growth compare to competitors like Equals? A: Guy Rudolph, CFO: It's challenging to make a direct comparison. Equals has diversified significantly beyond FX, growing their other banking product services, which contributed to their 33% growth. Argentex is on a similar path, aiming to diversify and enhance our product suite to achieve competitive growth.

Q: How do you plan to increase the stickiness of your customer base? A: Jim Ormonde, CEO: By providing exceptional customer service and a broader range of products beyond FX, we aim to attract more wallet share. Guy Rudolph, CFO: We are also leveraging Salesforce as a CRM platform to better understand and serve our customers, focusing on customer lifetime value.

Q: What are the anticipated benefits of the Argentex Global platform in terms of revenues and costs? A: Jim Ormonde, CEO: The new platform focuses on automation and scalability, allowing us to offer a seamless customer experience and deploy a wider array of products efficiently. This will enable us to scale without significantly increasing human resources.