Home' OzForex : Annual Report 2014 Contents 31
OzForex Annual Report 2014
International payment services is a large and growing market driven by increases in global population and
migration, leading to a larger level of cross border transactions and investment. OzForex is participating,
and in many respects leading a successful industry disruption of traditional international payment methods
and processes, driven by online technology and mobile services. The industry remains fragmented yet there
is increased competition and a rapid growth in the number of online international payment providers.
Industry participants are seeking ways to grow quickly and since the listing there has been a heightened level
of merger and acquisition activity. It's expected that this trend will continue as participants look to add scale to
their existing businesses. As previously announced, the Group participated in the HiFX sale process, and believes
targeted and selective merger and acquisition is an important aspect of its growth strategy in existing and new
markets. OzForex will continue to assess consolidation opportunities and is well positioned to take advantage
of this rapidly evolving industry through its:
• Scalable proprietary technology platform;
• Attractive customer value proposition;
• Large portfolio of Tier 1 banking relationships;
• Effective operational risk and compliance management;
• Clearly defined organic and inorganic growth strategies.
SECTION 14: EVENTS SUBSEQUENT TO BALANCE DATE
As at the date of this Report, the Directors are not aware of any circumstance that has arisen since 31 March 2014
that has significantly affected, or may significantly affect the Group's operations in future financial years, the
results of those operations in future financial years, or the Group's state of affairs in future financial years.
SECTION 15: LIKELY DEVELOPMENTS AND EXPECTED RESULTS
While the impacts of foreign exchange market conditions make accurate forecasting challenging, it is currently
expected that the combined net profit for the financial year ending 31 March 2015 will be up on the financial year
ended 31 March 2014.
The key growth driver for the business is active clients (the number of clients who have transacted at least once
in the prior 12 months). The growth in active clients for the financial year ended 31 March 2014 was up 31% to
120,500. This growth was augmented by the launch of Travelex, MoneyGram and the further penetration
through online marketing into the US. As these channels mature the growth in active clients is expected to
follow trends similar to prior years.
The net profit contributions for the financial year ending 31 March 2015 from North America are expected to
become a larger portion of overall net profit contributions compared to the financial year ended 31 March 2014
due to continued strong growth in fee and commission income, and expanding EBTDA margins as the Group
begins to achieve critical mass.
While Europe is a more competitive market, growth in active clients in this region is expected to be more
challenging. It is expected to be broadly in line with the financial period ending 31 March 2014. Subject to
consistent currency exchange rates the net profit contribution in the UK is expected to be up in the financial
year ended 31 March 2015.
The Australia and New Zealand segment will continue to be the largest single contributor to the net profit of the
Group. The growth in contribution, assuming a constant Australian Dollar exchange rate, is expected to be in line
with the growth in active clients, albeit offset by the full year impact of public company costs outlined in the
NPAT reconciliation on page 27.
The tax rate for the financial year ending 31 March 2015 is expected to be in line with the financial year ended
31 March 2014.
Accordingly, the Group's result for the financial year ending 31 March 2015 is expected to be up on the result in the
financial year ended 31 March 2014, with the potential for a better result if market conditions continue to improve.
The Group's short term outlook remains subject to the range of challenges outlined in the risks in section 12,
including market conditions, the impact of volatility in the foreign exchange markets, the cost of its customer
acquisition through online channels, potential regulatory changes and tax uncertainties.
OzForex remains well positioned to deliver continued growth in the short to medium term.
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