FairFX, the low cost multi–currency payments service, is pleased to announce a proposed placing to raise GBP5.25 million (before expenses), including a significant strategic investment from Crystal Amber Fund Limited of GBP5.0 million. The Company also provides an update ahead of its full year 2015 results.
Highlights of proposed investment:
- Proposed Placing totaling GBP5.25 million at 20p per share from new and existing investors; - Crystal Amber investing GBP5.0 million as part of the Placing; - Conditional Issue of Warrant to Crystal Amber over 7,500,000 new Ordinary Shares;
– Strategic investment will be used to accelerate FairFX’s marketing activities and aggressively target the Corporate Card segment in 2016;
- FairFX will be funded to execute its proposed marketing and organic expansion strategy; and
– Crystal Amber will hold approximately 24.24% of the enlarged issued share capital following the issuance of the Placing Shares*.
* Conditional upon the FCA Condition being satisfied as further described in this announcement.
2015 trading highlights:
- Full year 2015 turnover up 32% to approximately GBP625 million; - 75,039 new currency card customers acquired during the year, up 56% on 2014; and
– Across all product segments, a total of 103,338 new customers acquired during the year, up 20% on 2014.
An explanatory circular containing a notice of General Meeting of the Company to be held at the offices of Berwin Leighton Paisner LLP, Adelaide House, London Bridge, London, EC4R 9HA on 29 March 2016 at 11.00am, will shortly be posted to Shareholders (the “Circular”) and will be made available to view on the Company’s website at www.fairfxplc.com/investors. Unless otherwise defined, defined terms within this announcement have the same meanings as those to be set out within the circular. Definitions are also set out at the end of this announcement.
Introduction
FairFX, the low cost multi–currency payments service, today announces a conditional Placing of 26,250,000 new Ordinary Shares with Crystal Amber and other institutional investors to raise approximately GBP5.25 million (before expenses).
The Placing is conditional, inter alia, upon the Company obtaining approval from its Shareholders to grant the Directors authority to allot the Placing Shares and to dis-apply statutory pre-emption rights which would otherwise apply to the allotment of the Placing Shares. The Placing Shares will be issued in two tranches; the First Placing Shares and the Second Placing Shares, in order to provide the FCA with the appropriate notification and period of time to raise any objection, as required by the Payment Services Regulations 2009, prior to Crystal Amber acquiring a Qualifying Holding (as defined in such regulations) in the Company’s subsidiary fairfxplc (“FCA Condition”).
Background to and reasons for the Placing
The Directors believe that the strategic investment by Crystal Amber and other placees will enable FairFX to significantly accelerate its growth plans combining a more aggressive land-grab in both the retail and corporate customer segments, as well as rolling out its offering to other locations.
Accordingly, it is intended that the net proceeds of the Placing will be deployed by the Company across its key strategic initiatives. Specifically, marketing spend for all retail customers across TV and digital platforms will be bolstered, sales effort to corporates for the market-leading FairFX platform will be expanded and I.T. resources will be selectively added to speed up new product developments and overseas roll-outs.
The investment also provides FairFX with a key strategic institutional investor who can provide insight and advice to the business, as well as access to a business network which can help accelerate top-line sales growth.
Trading update for 2015
The Company is pleased to report that 2015 was another year of commendable progress, with turnover increasing by 32% to approximately GBP625 million. During the year 103,338 new customers were acquired across all of the Company’s product segments (up 20% on 2014), taking its total number of customers to 508,048.
The Company’s strategic focus on higher value products is delivering strong results with numbers of new Retail Card customers up 40%, year on year, new Wholesale Dealing customers up 44% and new Corporate Card customers up 40%. The combined total number of new Retail and Corporate card customers was 75,039, up 56% on the previous year (2014: 48,163). This growth correlated with the Company’s marketing strategy of focusing on acquiring card customers over the lower margin cash-in-the-post customers.
FairFX expects to report its full year results in April 2016
Commenting on the strategic investment and 2015 trading, Chief Executive Officer, Ian Strafford-Taylor, said: “2015 was notable for the success of our stated strategy of a land-grab in the Retail Card space. The growth across Retail and Corporate demonstrates the success of the marketing strategy, in terms of focusing on acquiring card customers over the lower margin cash-in-the-post customers.
“We are also absolutely delighted with the strategic tie-up with Crystal Amber. As well as representing a major endorsement of FairFX’s business model and success to date, this investment provides the necessary resources to execute our land-grab strategy in 2016 and beyond and push aggressively into the Corporate Card space. We are extremely excited about what we will be able to deliver.”
Richard Bernstein, Investment Adviser to Crystal Amber, commented: “We’re delighted to conditionally acquire a significant holding in FairFX, an online business with more than 500,000 customers utilising its peer-to-peer payments platform. We’ve identified a hugely scalable business model and are looking forward to assisting FairFX to capitalise on its potential.”
