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OzForex Shares Fall Despite Strong Profits

OzForex Shares Fall Despite Strong Profits
May 26, 2015 By Simon Herrmann

Online financial company OzForex Group (ASX:OFX) has reported a significant increase to full year profits on Tuesday. For the full-year period ending on the 31 March 2015, net profit came to $24.27m, up 52 per cent compared to the previous corresponding period. Revenue from ordinary activities was $97.40m, up 24 per cent compared to the previous period. The company is reporting a final 2015 dividend of 3.584c per share, which is a 50.9 per cent increase compared to the previous corresponding period.

Despite the significant boost to profits, revenue, and dividend, shares of OzForex have fallen sharply on Tuesday. The company’s Chief Executive Officer Neil Helm noted that there was strong underlying business growth that was reflected in the company’s operating metrics. He also stated that OzForex planned to reinvest its profits into core operations and business development. Contrary to the previous year’s report, the company opted to leave out the costs to acquire new clients. In the previous period’s report, the 7.5 per cent rise in new client expenditures was was factor attributed to the 19 per cent fall in the share price.

In the past month, shares of OzForex rose about 20 per cent in the lead up to the full-year profits report. It reached its highest trading price in the period immediately before its full-year report released in 2014. It is also down relative to its yearly high of $2.96 in January. OFX has fallen 26c, or 9.77 per cent, at $2.40 per share around 3:30 on Tuesday after the released of its full-year profits report. OFX has fallen 26.76 per cent in the last 12 months and 15.37 per cent so far this year.

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Simon Herrmann Author: Simon Herrmann May 26, 2015

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

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