Why did OFX Group (ASX OFX) shares jump above 20% on Tuesday

Highlights:

• OFX Group Limited (ASX: OFX) shares jumped by 20.129% on Tuesday.
• The OFX share price rose after it published its FY23 results ended 31 March 2023.
• During FY23, OFX’s statutory NPAT grew by 25.6% to AU$31.4 million from pcp.

An international money services provider OFX Group Limited (ASX: OFX), ended Tuesday, 23 May 2023, skyrocketing by 20.129% to AU$1.850 after it released its FY23 results ended 31 March 2023.

Let’s find out more about the ASX financial stock-OFX annual results.

On Tuesday, OFX released its FY23 results, wherein fee and trading income rose 42.4% to AU$225 million from AU$158 million in pcp. During the period, net operating income increased 45.6% to AU$214.1 million, steered by robust performance in the corporate division and the successful acquisition of Firma.

OFX generated a record underlying EBITDA of AU$62.4 million, rising by 40.3% on pcp, with an underlying EBITDA margin of 29.2% from pcp. Statutory NPAT in 1H FY23 grew 25.6% to AU$31.4 million from pcp. OFX continues to generate robust cash flows delivering net cash held of AU$93.8 million as of 31 March 2023.

During the reported period, the turnover growth of 17.9% to AU$39.1 billion was steered by a 13.8% rise in transaction volumes to 1.3 million, along with 3.6% in average transaction values to AU$29.1k. On 23 May 2023, OFX notified an on-market share buyback program to return funds to stakeholders as part of OFX’s capital management program while also enabling growth.

The on-market share buyback program will be up to 10% of OFX’s 100% paid ordinary shares and will begin in June 2023.  

As per the latest update, the company announced an investment to build on its best-in-class B2B client experience. The company is acquiring a Sydney-based B2B payments company, Paytron, which has developed a platform that has a modern interface and offers multi-currency account capabilities.

The investment from OFX will be nearly AU$6 million in the first year and dynamic cash funding afterwards, which will be based on revenue milestones and integration of the company’s clients onto the Paytron platform. The consideration consists of up to 11.25 million deferred performance securities conditional on development and revenue vesting conditions.

On the outlook front, excluding Paytron, OFX anticipates increasing NOI to between AU$225 million to AU$243 million. It expects its underlying EBITDA to fall between AU$63 million to 74 million.