6 July 2022

Argentex Group PLC

("Argentex" or the "Group")

Full year results for the year ended 31 March 2022

Strong revenue and profit growth with investment in newly defined priority areas to position Argentex for future growth

Argentex Group PLC (AIM: AGFX), the international provider of foreign exchange services to institutions, corporates and high net worth private individuals, today issues its full year results for the year ended 31 March 2022.

Financial Highlights

• Group revenue increased by 23% to £34.5m (2021: £28.1m), including £8.0m from new clients
• Adjusted operating profit⁽¹⁾ up 26% to £11.0m (2021: £8.7m)
• Earnings per share (EPS) 6.6p (basic) and 7.0p (adjusted) (2021: 5.2p basic and 5.9p adjusted)
• Final dividend of 1.25p per share to be paid, bringing the total for FY22 to 2.0p per share (2021: 2.0p per share)

Operational Highlights

·      Strong client activity with improved trading volumes driving revenue growth

o  Record 1,624 corporates actively traded⁽²⁾ in 2022, up 17% (2021: 1,385)

o  528 new corporate clients traded during the year, up 6% (2021: 499)

o  Client trading volumes recovered throughout period as market confidence rebounded from 2021 and volatility remained high

o  In line with prior years, H2 contributed 54% of annual revenues as volumes increased through the year

·      Consistency of business mix continues

o  Over 80% of volumes comprised trades in sterling, euro and US dollar, significantly limiting impact of risks in emerging market currencies

o  Spot/forward revenue mix remains balanced (Forward 51%, Spot 49%)

o  Increasingly diversified client base with 36% of revenue represented by top twenty customers, down from 41% in FY21

·      Defined growth strategy underpinned by three priority areas

o  Significant investment in people

§ Average headcount grew by 19 staff year-on-year, with total headcount surpassing 100 at period end

§ Continued to attract industry leading expertise throughout business, including senior leaders; ratio of front and back-office staff consistent with 2021

§ Expansion of London office expected over the medium term, to reflect increase in front office staff

o  Evolving our technology offering to align with client need and optionality

§ Launch of online platform in February 2022 with refreshed interface and navigation; first in a suite of planned proprietary tech-enabled product enhancements

§ Initial tech platform rollout contributed to record month for Argentex in March 2022, with 391 trades completed (March 2021: 123 trades)

§ Following strong initial feedback from existing clients, there will be an acceleration of investment in new products to seek to capture new customers, gain further international reach and enable improved efficiency and improved share of client wallet

o  Internationalisation through expansion to new geographies with high quality regulatory regimes

§ Amsterdam office continued increasing contribution to Group revenues, generating half-on-half growth since inception helped by doubling of front office headcount

§ Management team recruited in Australia with trading beginning once regulatory approvals have been obtained

§ 9 new front office hires made in non-UK markets to lead this strategic growth area

Outlook

·     Current trading has been positive with first quarter revenue increasing by 22% to £10.1m (Q122: £8.3m)

·    Continued investment into people and technology expected, underpinning momentum in client base growth and accumulation of market share from incumbent banks which account for 85% of the cross-border market

·   The combination of the above initiatives is expected to generate a strong return on investment in the medium term through growth in revenues, boost in profitability and improvement in quality and visibility of earnings

·   The Board announces its intention to change the Group's financial year end from 31 March to 31 December.  Historically, results have been strongly weighted to towards the second half of the year.  Changing the financial year will address this imbalance

Harry Adams, Chief Executive Officer, said:

"Against a backdrop of ongoing market uncertainty as global economies emerge from the pandemic with new economic challenges, I am pleased that Argentex has performed strongly, delivering double digit revenue and profit growth driven by a resurgence in trading volumes as companies recover their confidence in the post-Covid era.

"The results demonstrate strong progress against our long-term strategic initiatives and the quality of our growing talent base as we continue to invest to meet the growing demands of our clients, drive efficiencies and uncover new opportunities, both domestically and internationally.

"In becoming sole Group CEO a year ago, I identified the importance of refocusing our growth strategy into clear priorities that evolve our service offering and capitalise on the huge market opportunity that lies in front of Argentex. I am pleased to report positive progress in all three of our growth pillars - people, technology and internationalisation - which will deliver sustainable and profitable growth into the future as our business broadens. We are confident in the future prospects of the business and remain well positioned to generate long-term value for all of our stakeholders."

Lord Digby Jones, Non-Executive Chairman, said:

"Alongside a strong financial and operational performance as volumes have rebounded from pandemic lows, I am proud of the Group's strategic refocus as part of its ongoing measured approach to long-term growth. Building a sustainable future has always been a priority for the management team and the defined growth priorities outlined and decision to accelerate strategic investment demonstrate a fantastic opportunity to strengthen our market position, bolster resilience and drive profitable growth regardless of the economic uncertainties apparent today."

(1) Adjusted operating profit excludes non‐recurring expenditure of £0.4m (FY21 £0.7m) and a further £0.2m (FY21 £0.2m) related to share based payments.

(2) Any client with a trade executed in the financial year (contract date within FY), excluding private clients.

For further information please contact:

Argentex Group PLC

Harry Adams - CEO

Jo Stent - CFO

investorrelations@argentex.com

FTI Consulting LLP (Financial PR)

Ed Berry / Ambrose Fullalove / Jenny Boyd

07703 330 199

argentex@fticonsulting.com

Singer Capital Markets (Nominated Adviser and Broker)

Tom Salvesen / James Maxwell / Justin McKeegan

020 7496 3000

Analyst briefing

A meeting for analysts will be held virtually at 9.30am today, 6^th July 2022. Analysts wishing to attend this event can register via email to argentex@fticonsulting.com.  Argentex's Full Year results announcement will also be available today on the Group's website at www.argentex.com.

Chairman's statement

As societies have emerged from the Covid-19 pandemic, businesses are at a point of introspection.

Good businesses will reflect on the learnings of the last two years and turn them into opportunities when embarking on the next phase of growth.

I am proud to be the Chairman of a business which embodies this active, measured and long-term approach to growth. With an eye on continually building a sustainable future, the business has used the last financial year to evolve further, invest in its teams, technology and breadth of client offering to strengthen its market position and ensure continued resilience and outperformance amid changeable and unpredictable macroeconomic conditions.

It has always been a privilege to work with Harry Adams, the leadership team and the Board of Directors. This year has been no different, indeed more so, as they have steered the business through a significant period of uncertainty, preserving company operations, supporting employee wellbeing and constantly innovating the service delivered to its clients.

This has been made possible by the oversight of a strengthened Argentex leadership team. Jo Stent's appointment as Chief Financial Officer and David Christie joining as Chief Operating Officer over the period are testament to the company's unwavering focus on talent as a means for optimising the market position we occupy.

Despite continued volatility, we have emerged from the recent period strongly, with an enhanced and increasingly efficient service offering. Ultimately, this means the business is well-positioned to capitalise on the opportunities that new markets present.

Argentex has worked hard at creating stronger foundations and a refined strategic plan to prioritise profitable growth, and I am confident it will unlock a significant untapped market opportunity - with people, technology and internationalisation at its core.

MARKET BACKDROP

As the clouds of the pandemic lift, we face fresh challenges in our response to the tragic ongoing war and humanitarian crisis in Ukraine. Despite now carrying no corporate exposure to Russia and no client exposure in the region, the swift steps taken to exit all Rouble currency before the invasion reflects our unrelenting approach to risk management and a quality over quantity approach to relationships.

It is undeniable that this volatile geopolitical picture, compounded by significant macro-economic pressures felt globally as the cost-of-living soars for many, will impact market and business sentiment over the next 12 months. Global businesses will face long-term economic challenges as a result of the conflict and the rising inflationary environment, but whatever winds of challenge or opportunity blow, Argentex is well set to face them.

While the near-term outlook remains unclear, we are confident in the ability of our proven business model to continue navigating a changeable business environment, while meeting the expectations of our valued clients and shareholders.

KEY ACHIEVEMENTS

Our strong financial performance is supported by a three-pronged strategic approach to our activity, embedded in people, technology and internationalisation. Although the global economy has faced unprecedented challenges in recent years, our business has not stood still. The continued targeted investment across these three areas is translating into positive operational and financial momentum across the business.

We remain committed to opening new offices in key international locations. Our office in the Netherlands is already showing strong performance, driven by an expert team and a local market ripe with opportunity. I am also pleased to report that our new office in Australia is following in similar footsteps, with regulatory approvals at an advanced stage and teams onboarded. Client-led expansion into new, highly regulated international markets remains a pillar of our growth strategy looking forward.

Our investment in people continues to gather pace. The quality of the individuals running Argentex, and those delivering the market-leading service we are known for, is fundamental to our ability to remain resilient and continue driving shareholder value. We were delighted to welcome the team back to the safe working environment of the office after a prolonged period of remote working and are encouraged by the continued high standard of delivery as a result.

The future of our industry is embedded in technologically enabled products - a truly sustainable business needs to have an ability to provide a 24/7, 'always-on' service for clients, wherever they are based. Over the period, we have focused on creating a leading technology platform that meets the increasingly complex needs of clients in a user-friendly product and high quality service that is underpinned by the face-to-face relationships for which we are known. We understand the need to enhance our traditional broking offering, transitioning towards a technology-enabled service provider. We are excited about the optionality, efficiency and scalability this will bring to the business, including our ability to efficiently cross-sell services as we internationalise our offering.

OUTLOOK

Flexibility and confidence have been two of the most crucial characteristics of businesses that have navigated and emerged successfully from recent operational challenges, defined by the ongoing impact of the Covid-19 pandemic. While the global economy faces uncertain times ahead, I strongly believe the Company is well positioned to embark on its next evolutionary phase of growth. 

Through our targeted investment we have built a stronger platform, based on greater efficiency and a broader service offering both geographically and operationally. I would like to thank all of our shareholders, clients and fantastic employees for their continued support that is instrumental in driving our business forward. As democratic capitalism weathers the global assaults of the crisis in supply chains, significantly higher inflation than for decades and the enduring fall-out from the war in Ukraine, your Company is set fair to succeed and deliver for all its many stakeholders.

Lord Digby Jones Kb.

Non-Executive Chairman

CEO statement

OVERVIEW

The twelve months to 31 March 2022 constituted a defining and strategically significant period for Argentex. Despite the continued macro-economic uncertainty, the Company has delivered further double-digit revenue and profit growth, underpinned by our proven business model, best-in-class client service, balance sheet strength and measured approach to risk.

When I became sole CEO in July 2021, I sought to undertake a top to bottom review of the business. It was important to reflect on and evolve our strategy, taking action in areas we could influence to ensure we are well positioned, not only to deliver against our growth targets, but also optimise our service offering and capitalise on the ever-changing B2B financial services market.

In the period, I am pleased to say, we have delivered further progress against our long-term strategic initiatives and growth in our client base which has contributed to the Group's revenue of £34.5m for the 12 months to 31 March 2022, representing growth of 23% year-on-year (2021: £28.1m).  This continued momentum delivered adjusted operating profit of £11.0m, up 26% year-on-year (2021: £8.7m) and a statutory operating profit of £10.4m (2021: £7.8m). The Board is pleased to announce a final dividend of 1.25p per share bringing the total for FY22 to 2.0p per share, flat on 2021.

I would like to thank the whole team at Argentex for their hard work and continued commitment which has given us a strong foundation to embark on the next chapter of our growth story. We continue to invest to drive efficiencies and bring new opportunities, both domestically and abroad. In addition, our commitment to bringing improved expertise and experience into our business, supported by a newly refined strategy, means we remain well positioned to deliver value for all stakeholders in the years to come.

MARKET BACKDROP

Over the last financial year, companies around the globe have taken steps to return to normal life, post-pandemic. As confidence has returned, the global economy has shown signs of recovery.  We have observed a progressive uptick in business sentiment and activity, driven by a recovery following the post-COVID unlocking of the global economy, and consequently we are experiencing further demand for our services.

However, trading conditions in the second half of the financial year have been more volatile as central banks grappled with sustained inflationary pressures, compounded by growing geopolitical tensions and Russia's invasion of Ukraine. Our service-led offering and approach to market risk - a key differentiator that has served us well since inception - has once again positioned the Company strongly in challenging markets. Our policy of matching every trade with a blue-chip institutional counterparty continues to be effective in eliminating residual proprietary market risk.

Volatility does, however, present opportunities for our clients. It has led to them not only trading more frequently with higher notional values, but also hedging for a longer tenor. These themes have allowed the Company to grow its breadth and depth of customer relationships that will be further enhanced by our evolving service offering, with notable new launches due in the current financial year. In addition, as interest rates rise, we expect that this trend will continue into FY23 and beyond.

Although volatility can be beneficial, it is our high levels of customer service and ability to meet client needs in any market environment that defines Argentex.

We recognise that our industry does not stand still, which is why we are continuing to invest in our people, global reach and technological capabilities. As a result, we are more agile in our ability to deliver for clients and their changing needs and requirements, irrespective of the trading environment.

The opportunity in the $6.6tn a day global foreign exchange market is vast. Our specialist, high touch, personalised service and superior pricing enables us to continue accumulating market share from incumbent banks, which account for 85% of the cross-border market. We continue to position ourselves to attract new clients in need of specialist, often sophisticated, commercial FX services.

FINANCIAL AND STRATEGIC PROGRESS

Our performance has been driven by our commitment to providing high-quality outcomes for our clients. Businesses across all sectors continue to identify Argentex as a trusted partner for their trading requirements against a dynamic market backdrop. As companies are rebuilding confidence in the post-Covid era, a record 528 new clients traded with the Group this year (2021: 499). The launch of our new online platform in H2 led to a record number of clients trading online during the period and we expect this demand to continue. Our client mix across industries, showcases the high-quality and diverse nature of our book with revenue concentration further reducing, as our top 20 clients now make up 36% of total revenue (2021: 41%).

In order to maximise the significant market opportunity ahead, we have evolved our strategy around three growth pillars: people, technology and international expansion. We are confident these long-term focus areas will deliver deeper and more sustainable growth into the future as our client demand broadens, and we make strides towards becoming a technology-enabled financial services provider with foreign exchange at its core.

We have made good progress with each pillar:

·      The strategic investment in strengthening our team at all levels continued during the year. Not only have we attracted senior leaders in finance, operations, compliance and risk to broaden our expertise and help drive our new strategy forward, we expect our front office capability to grow over the medium term, such that we are expanding the footprint of our London office. We have also fulfilled our commitment to building out our trading, execution and relationship management teams, recruiting 19 new hires across the Group with 4 in the Netherlands.  We continue to optimise the service we provide to clients.

·      The momentum behind the broadening of the Group's geographic reach continues to build as we seek to unlock new markets and revenue sources in highly regulated geographies where there is latent demand for our products and services. The business in the Netherlands is trading well and in line with expectations, just 24 months since inception. We have also onboarded a management team in Australia and, once the customary regulatory approvals have been obtained, expect to begin trading during the first half of FY23.

·      In February 2022 we launched our online platform enhancements. We are now poised to add future products which will further enhance our customers' experience. In addition, our structured solutions product - catering for clients with more complex needs - continues to grow and is now responsible for 3% of total revenue (2021: 1%). The Board's decision to accelerate investment in our platform should allow for a more agile and efficient business, able to take on smaller clients and take a greater share of client wallets over time.

CHANGE IN ACCOUNTING PERIOD END

Historically, the Group has experienced its most active quarter in the final quarter of its financial year, i.e. for the quarter ending on 31 March, and therefore our results have always been strongly weighted towards the second half of the financial year.  The Board believes that the Group would benefit from a change of financial year to 31 December which would address this imbalance.  The Board therefore announces its intention to change the Group's financial year end from 31 March to 31 December.  Argentex therefore intends to present its next unaudited interim results for the 6 months ended 30 September 2022 in November 2022 and its next audited final results for the 9 months ended 31 December 2022 no later than April 2023.  From the beginning of calendar year 2023, interim and final results will then be prepared for the 6 month period to 30 June and 12 month period to 31 December.

PRIORITY GROWTH AREAS

Investment in people

Investment in our people has always been central to our success. We remain committed to ensuring our sales team has the resources to unlock opportunities, while simultaneously bolstering our senior management and operational teams to promote sustainable growth.

The period has been the first full financial year since Jo Stent, Chief Financial Officer, joined the Company (February 2021). Her experience has helped rebuild the finance function, while also innovating the ways in which we drive shareholder value. More recently, the Group has made two further significant leadership team hires with David Christie joining as Chief Operating Officer (March 2022), and David Winney as Global Chief Compliance and Risk Officer (April 2022).

As our client-led expansion continues, driven by the aforementioned sales team hires, we have reorganised our internal sales team structure to a pod model, which drives accountability and performance transparency while also supporting clear progression across the team. To provide the infrastructure for this front office expansion, the Company is expecting to increase its footprint at our office in London.

We continue to attract high-quality, experienced individuals and we are proud that our graduate scheme continues to be effective in helping us identify and channel early-stage talent into our business. We are passionate about investing in the next generation of financial services professionals, as part of our commitment to fostering organic growth and nurturing the future leaders of Argentex.

International expansion

We have continued to pursue opportunities in new markets as we transform Argentex from a single-product, single-office business into a multi-product, global business. Over the period, this internationalisation has been bolstered particularly by the establishment of on-the-ground presence in our chosen global markets. I'm delighted that this strategy is starting to bear fruit and contribute to Group revenue.

The Amsterdam office, the EU headquarters of Argentex, continues to grow in line with expectations. The team has delivered positive half-on-half revenue growth since inception

in January 2020, helped by a doubling of front-office staff to 8. We look forward to seeing the momentum behind the office and client growth build over time.

Furthermore, the Company's planned entry into the Australian market in FY23 and near-term commencement of trading is at an advanced stage, with key hires onboarded and customary regulatory approvals being sought. This remains a key objective in maximising growth opportunities outside our core UK and European markets.

Evolving our technology

Industry dynamics shift in alignment with client needs. Therefore, the strategic importance of a complementary tech-enabled service that gives clients optionality, flexibility and drives efficiency has grown. Over the period, Argentex has launched an enhanced online platform with a refreshed interface and intuitive navigation - the beginnings of a new, forward-looking technology strategy.  It will enable our clients to tailor the service levels they require as well as increasing functionality and driving real time engagement.

This optimised platform will be supported by a mobile responsive interface, providing further flexibility to the Group's client base and enabling us to take a greater share of client wallet. It will also seek to capture new customers and gain further international reach.

The platform has been rolled out to a subset of existing Argentex customers, with positive feedback and results. We're proud that our technology enhancements have helped us deliver a record month for the business in March 2022, with 391 trades completed (March 2021: 123 trades). We look forward to making the new trading and client service platform available to all customers in the current financial year.

The Company is now accelerating its investment in its proprietary platform and in-house capability. I expect this investment to increase efficiency of onboarding and monitoring of client activity and trends. It is also likely to be recognised in our financial results over the shorter term, with a positive return on investment over the medium term as volume of trades and revenues increase.

This recent phase of investment constitutes the first in a planned suite of proprietary tech-enabled product enhancements. It is a sure step forward in the Company's journey towards becoming a technology-led financial services provider, with improved client accessibility, experience and scope to broaden our product offer. The continued digitisation of the platform will support the Group's aims to create a more efficient and scalable platform with diversified revenues to help drive profitable growth.

SUSTAINABILITY STRATEGY

We are committed to putting the right focus on environment, social and governance issues to support our growth and yield greater business benefits. Our sustainability strategy is centred around three key pillars: People, Partners and the Planet.  We have outlined our intentions and look forward to reporting on progress against our goals in the months and years ahead.

OUTLOOK

Argentex is a growing company in a dynamic industry. We have clear ambitions to continue to grow our top-line and continuously attract market-leading talent, supporting our overall performance despite an uncertain market backdrop.

We are embracing the digital revolution and the transformative effect it is having on the financial services industry. By continuing to invest in our technology to ensure our capabilities meet the increasingly digitalised requirements of our stakeholders, we're confident we will continue to deliver value to our clients and shareholders.

The end-to-end review of our entire business that was undertaken this year has shone a spotlight on where opportunities exist for us to scale up our activity, and consequently, our ambitions for Argentex. We are strongly capitalised with sufficient financial flexibility to support us as we pursue our growth ambitions and continue to build market share in this very large and exciting sector.

The Board remains confident that the level of revenue growth will continue as expected in FY23 with associated enhanced quality of earnings over the medium term.

The combination of the above initiatives are expected to generate a strong return on investment in the medium term through growth in revenues, boost in profitability and improvement in earnings quality.

I would like to thank our employees, business partners and shareholders for their continued support. I look forward to sharing more updates with you in the coming period.

Harry Adams

Chief Executive Officer

Financial Review

The 12 months to 31 March 2022 represented a pivotal year for Argentex.  As referenced earlier, Harry Adams appointment as sole CEO in July 2021 initiated an end to end review of the Group's operations, resulting in an evolved strategy supported by three key growth pillars: people, technology and international expansion.  Although these growth pillars are consistent with prior years, the redefined strategy identified an opportunity for technology to play a greater role in the delivery of our high touch customer service offering and enhance the Group's ability to prosper in the years ahead.  This meant an increase in the Group's investment in software development (FY22: £1.7m, FY21: £1.2m), including an upgrade to the online platform. In addition, investment in people continued not only in the front office but in technology and operations, including at the senior executive level with the appointment of David Christie as COO. 

At the same time, the Group delivered year on year revenue growth of 23%, adding 528 new traded corporates in the year (FY21 499) with 23% of revenue represented by new business.  Adjusted operating margins improved modestly to 31.9% (FY21 30.9%), delivering an increase in earnings per share of 1.4p (operating margin was 30.1% (FY21: 27.8%)).  The Group's robust approach to risk remains unchanged, which is demonstrably reflected in the consistently low instances of client default.

FINANCIAL PERFORMANCE

In FY22, revenues increased by 23% to £34.5m (2021: £28.1m).   As has been the case in the past, revenue tends to be weighted towards the second half of the year with H2 revenues contributing 54% of total annual revenues.   H1 delivered a higher year on year growth in percentage terms compared to H2, (H1 33%, H2 15%) however this was driven by the impact of the pandemic on H1 FY21 in particular, where the Group witnessed a significant slow-down in trading volumes as many customers adjusted to a markedly different set of macro factors.  The total number of corporate clients traded in FY22 was 1624, representing an increase of 17% on the prior year.   528 of these represent new customers, in turn demonstrating strong customer acquisition. 

Earnings of £7.4m in FY22 represents an increase of £1.5m or 25% versus FY21 (FY21 £5.9m).   This increase in earnings coupled with the Group's strong balance sheet has enabled the continued investment in growth in line with the now evolved strategy across people, technology and international expansion.  Overall, administrative expenses increased by £4.0m compared to FY21.  This is primarily driven by the investment in people.  Average headcount grew from 67 in FY21 to 86 in FY22 including directors, with headcount at 31 March 2022 surpassing 100.  The front office: back office split remained broadly consistent year on year.  We expanded international teams including 4 new hires in Holland across the year and the appointment of the management team in Australia in February 2022.  In addition, we increased our investment in technology to £1.7m in FY22 (FY21 £1.2m) in support of our service-led customer offering. Our investment in technology, in line with our accounting policy, is capitalised on our balance sheet as an intangible asset and amortised over a three year period. 

Operating profit increased 33% to £10.4m (FY21: £7.8m). Adjusted operating profit of £11m (FY21: £8.7m) excludes £0.6m (FY21: £0.9m) of one-off items that do not form part of ongoing operating costs.  In line with our accounting policy as stated on page 122, these are made up of legal and other set up costs for overseas subsidiaries as well as restructuring costs.

Net earnings in FY22 were £7.4m, representing a year over year increase of £1.5m (FY21:£5.9m) resulting in a 1.4p increase in earnings per share to 6.6p.

FINANCIAL POSITION

Argentex views its ability to generate cash from its trading portfolio is a key indicator of performance within an agreed risk appetite framework. As at 31 March 2022, Argentex has cash and cash equivalents of £37.9m, an increase of £11.1m on prior year. Total cash and cash equivalents include client balances pertaining to collection of any collateral and variation margin in addition to routine operating cash balances.  Further, cash and cash equivalents does not include collateral placed with financial counterparties which is a change from historical practice.  Historically, this has been included in cash and cash equivalents but disclosed specifically in the financial statements disclosure notes, and in FY22 any collateral placed with financial counterparties is now classified as £7.2m in other assets (FY21:£11.6m).

The Group generated £17.2m in cash from operating activities in FY22 (FY21 £10.8m).  Of this amount, £6.2m relates to an increase in client balances held, as shown in payables of the financial statements. Of the remaining £11m in cash generated from operating activities, £1.7m was used to invest in technology including an enhanced online platform and a further £3.1m was returned to shareholders in the form of a dividend.

Cash generation from the Group's revenues is a function of i) the composition of revenues (spot, forward and option and swap revenues) and ii) the average duration of the FX forwards in the portfolio.  To date, Argentex has generated revenues in a ratio of approximately 50:50 between spot and forward contracts outside of options and swap revenues.  While spot FX contracts attract a smaller revenue spread, the inherent risk profile is much reduced and cash is generated almost immediately.  As such, having this proportion of revenues generated by spot trades with a minimal working capital cycle creates a strong positive immediate cash flow for the business compared to its operating cost base.

Argentex continues to enjoy a high percentage of trades converting to cash within a short time frame, which is a result of almost 50% on average of trades outside of option and swap trades being spot contracts in addition to forward contracts carrying a relatively short tenor on average.  Over 75% of revenue converts to cash within 6 months.  Excluding swap revenue, 85% of revenue converts to cash within 3 months which is consistent with prior years as follows:

CASH CONVERSION

PORTFOLIO COMPOSITION

Argentex's client base continues to grow with an increase in corporate clients traded in the year to 1,624 (FY21: 1,385), and 528 of these corporate clients traded representing new business.  Even when taking growth into account however the composition of our client portfolio remains consistent year-over-year in that it consists of similar businesses with exposures in the major currencies of sterling, euro and US dollar.  In line with prior year, as at the year-end over 80% of the Group's portfolio was comprised of trades in those currencies and hence the Group's exposure to exotic currencies or currencies with higher volatility and less liquidity remains significantly limited.  Further, client concentration has declined year on year with 36% of revenue represented by the top twenty customers, a reduction to the prior year (FY21 41%).

Argentex has put in place a low risk approach to managing collateral requirements with institutional counterparties to mitigate significant volatility risk which, when coupled with a selective and robust client acceptance process, has ensured that Argentex continues to avoid any material issues over settlement.  In addition, as a result of a conservative approach to risk, Argentex continues to enjoy immaterial occurrence of bad debt.

CHANGE IN FINANICAL REPORTING PERIOD

In line with the Group's transition to a global financial solutions provider, the financial reporting timetable will move to a calendar year with the first new reporting period ending 31 December 2022.

DIVIDEND

Argentex is pleased to declare a final dividend for the year ended 31 March 2022 of 1.25p per share.  The final dividend record date will be 26th August 2022 and will be paid on 26th September 2022.  The ex-dividend date is 25th August 2022. Together with the interim dividend paid on 7th January 2022 of 0.75p per share, this brings the total amount of dividend payable for the year to 2p per share, in line with prior years.

Jo Stent

Chief Financial Officer

Consolidated Statement of Profit or Loss and other comprehensive income for the year ended 31 March 2022

Consolidated Statement of Financial Position as at 31 March 2022

1)     Restatements relate to disclosure formats of derivative netting and cash collateral. There is no impact on net assets. See note 28.