By Malcolm Stacey | Friday 22 July 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Hello Share Swiggers. It's not that long ago that I suggested you might take a look at FairFX (FFX). This is a firm which makes spending abroad a bit cheaper by allowing you to top up on card which you can use to collect spending money on foreign holidays and business trips. Companies also use its services - and they are growing impressively in number. The prepaid cash card I use is the Caxton card and I find it very useful. But FairFX has just put out a trading statement which should also make investors sit up.
Turnover was up by nearly a tenth in the first half of this year. It amounted to £341m, which was up even on management expectations.
This is one of those companies which saw an immediate benefit on Brexit. Just up to Brexit and its immediate wake brought its busiest time ever. And business was boosted by the fact that some similar firms closed for the period.
And now customers continue to sign up for FairFX as we all get used to the lower rate for sterling. One reason for the surge is that the media has been calling on FairFX pundits to comment on the falling pound. This has given it loads of free publicity.
But the main driver I think for the company is that it's cheaper to load a card before you go, rather than pay exchange rates and commissions. Not to mention being far safer than carrying loads of cash around.
I can only see this kind of service becoming more popular. And, as it does not involve buying loads of stock and using energy and employing hordes of workers, the margin for profit can be quite high.
Doubtless more competition will appear on the horizon, as it always does when we seem to be on a winner. But FairFX is fast becoming established as a reliable provider. And that's exactly the security you want when you travel out of your comfort zone.
And now it's over to my comfort zone - the Punter's Return.
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