Argentex Share Discussion Threads

[yump] 13/7/2023 21:20

Potentially very positive gearing of profits to revenue is why I’m here, but the problem is working out whether the current/prospective ratings are reflecting the current lack of it at the moment. Certainly better than being on a rating of 30 in expectation.

[topvest] 13/7/2023 21:11

Gross margins are nearly 100% and so revenue shortfalls massively impact the bottom line. I didn't like Harry's body language in the video. I think he knows H2 is a tall order and current trading is sluggish. The cost base is massively expanded, so if they don't hit £35m in H2 it will almost be a 1:1 reduction in net profits for every £ of shortfall. Of course, Q3 will likely be slow as well as its summer, so it will all be down to Q4 which will probably need to be c£20m. That's a big ask.

[trident5] 13/7/2023 19:41

Quite, the sole focus on revenue is disconcerting.

[yump] 13/7/2023 18:22

The important measure is surely time since the hires vs the time to get up to speed. On IPO, most employees were mature in terms of sales relationships.

That leaves the rating and whether its worth waiting for the overall market to improve with money in something else that has yet to prove its expansion plans are working.

I have no doubt that there is now a big extra “overhead̶1; here of employee costs.

Its very difficult to figure if that represents potential or not.

Unfortunately, AGFX quote revenue all the time, as do 90% of all floated businesses. While there’s enough revenue to pay salaries, why rock the revenue boat ?

If they’re not quoting profit, is that deliberate, complacent or incompetent ?

[manics] 13/7/2023 14:47

There's being patient, and then there's bag holding. It's been years since the IPO.

[doctor888] 13/7/2023 10:02

Their explanation is that new hires take time to reach their peak earnings.

Important to be patient, although this has been a slow burner.

[trident5] 13/7/2023 09:43

Likewise, I've just exited at a small loss for just the reasons you've mentioned.

[topvest] 13/7/2023 08:21

Well I have reluctantly sold for a 10% loss before dividends. Its been on my amber list for a while and I should have sold before the trading update. Anyway, listending to Harry confirmed my worst fears:
hxxps://www.voxmarkets.co.uk/media/64ad740b14590db399c5c6d0/?context=/series/q-and-a
Argentex are not really delivering and I don't trust them. Points to note:
1. RNS says in line, but Harry clearly says broadly in line and we know what that means!
2. Harry mentions they have 170 staff or double last year's average.
To me this looks a bit like Utilitywise and we know how that ended. Basically, they are employing more and more sales staff, but they are less productive than the key early better staff. It's still a cold calling sweatshop despite the technology.
I think the risk of a profit warning is very high now unless they have a stellar H2. I think the likely sales outturn is closer to £55m rather than £60m which would halve the profit number particularly as they are up against strong prior year comparatives in H2. Basically, they are making less money than they did post-IPO on far fewer staff.
The other thing that I don't like is the LLP profit skim which is about £5m a year.
Anyway, pleased to be out, albeit I definitely should have cut earlier as its not worked out versus the original thesis. Good luck to thse that remain.

[ali47fish] 12/7/2023 17:50

direc buying here any comments!
Argentex Group PLC



("Company" or the "Group")



Director / PDMR Dealing



Argentex Group PLC, the service led, tech enabled provider of currency management and payment services to international institutions and corporates, announces that Lee McDarby, Chief Commercial Officer, on 10 July 2023 purchased 16,500 ordinary shares of £0.0001 each ("Ordinary Shares") in the Company at a price of 120 pence per Ordinary Share.



Following this transaction, Lee McDarby's total beneficial interest in the Group is 16,500 Ordinary Shares representing approximately 0.01% of the Group's issued share capital.

[chinahere] 12/7/2023 12:04

Thanks for the video - it gave me confidence that they can see opportunity ahead!

Digby isn't Digital !?

[brummy_git] 12/7/2023 06:55

In this fascinating interview, CEO Harry Adams of Argentex, takes me through yesterday's 'in line' trading update, alongside explaining what was behind #AGFX's impressive 28% YoY jump in H1’23 sales to £25m.

[topvest] 10/7/2023 19:54

Agreed that this was a mildly disappointing update - Q1 was already a tad pedestrian and Q2 also, versus weak comparatives. Still growing, but not firing on all cylinders. Q3 and Q4 are normally stronger. £60m looks more of a stretch now. I suppose the downside is if they only achieve £30m or so in H2 leading to £55m revenue, but they seem to be comfortable in hitting £60m at this stage, with the H2 weighting. I still hold.

The change of Chair seems logical given age and tenure. He will continue to serve for another 2 months. The new Chair seems strong.

Anyway, any slight disappointment gets hammered in these markets. Even an out-perfrom only gets a very modest share price increase!

[eagle eye] 10/7/2023 16:45

No mention of margins or cash position which is disappointing in a market devoid of confidence.
H1 revenue of £25m (+28% H1 22) leaves £35m for the second half to December.
Revenue split between H1/H2 last year was 38.6%/61.4%.
Based on Singer's £60m revenue forecast this year, Argentex has done 41.66% first half which is a tad ahead of expectations.
News the online platform and the new alternative transaction banking product exceeded expectations is a plus.
New offices in Holland and Australia should help boost topline growth in H2.
Singer EPS forecasts for FY to Dec 23 and Dec 24 are 9.1p and 11.8p respectively, which leaves the 12 month rolling forward PER of x 11 (116p/10.45p = 11).
Good value, but what isn't in this market.

[thebeast1] 10/7/2023 13:16

I reckon it's due to the overall AIM market being depressed and investors market outlook currently. Doesn't look as an expensive stock and the in line is based on previous upgraded guidance. I reckon when overall investor outlook improves this will be a big winner. I am holding onto mine.

[ali47fish] 10/7/2023 12:58

thanks taurus- i am not buying either but why in line gest hit like this!

[wjccghcc] 10/7/2023 11:24

Actually Alpha is on a similar rating if you include the interest income they receive on balances. Current year Liberum forecast is 148.2p including interest income putting them on a PE of 14. AGFX and EQLS include interest income in their earnings figures whereas ALPH don't as they view it as distorting the underlying progress.

I hold both (tho many more ALPH).

[gopher] 10/7/2023 10:13

Interesting post Taurus and I agree the numbers look a stretch. Bull case here has always been the comparison with Alpha - a better company perhaps but on double the rating.

[taursus] 10/7/2023 10:06

DYOR. I am not buying.

[ali47fish] 10/7/2023 09:54

taursus what is your verdict.conc is this good to buy or not

[taursus] 10/7/2023 09:33

It is worth breaking down revenues by quarter for 2022 and 2023:

2022 £m
Q1 9.5
Q2 10.0
Q3 17.4
Q4 13.6
Total 50.5

2023
Q1 12.3
Q2 12.7
H1 25.0

Q3 last year was attributed to “exceptional” short-term trading conditions due to sterling’s weakness in August and September.

There is little to now growth in sequential quarterly sales from Q3 2022 onwards, which seems odd for a business that claims to be growing and with the Dutch and Australian offices apparently “building up steam”. With market forecasts of sales at £60m for calendar year 2023, it is difficult to see how H2 will produce sales of £35m, which would mean 2 quarters like Q3 of 2022, which was “exceptional” and clearly not replicated in the following three quarters. If H1 sales are in line with management expectations, these have clearly been set low.

[brummy_git] 10/7/2023 08:03

Continued strong growth (H1'23 revs up +28% to £25m) from Argentex - a challenger & tech-enabled foreign exchange dealer and international payments provider.

All the details here

[dr biotech] 10/7/2023 07:33

Results were 34% up Jan-mar. So 28% Jan-June seems decent but slower, given the economic background