OzForex pins its hopes on white label business

Foreign exchange service provider OzForex has reported strong growth in income and profit for the six months to September. A highlight for the company was the profit made by its US business after two years of losses.

OzForex made a net profit of A$12 million in the September half - 25 per cent up on the previous corresponding period.

Net fee and commission income rose 19 per cent to $41.6 million. This was based on an 18 per cent increase in transactions to 336,140.

One of the company's goals has been to expand offshore. Offshore fee and commission income rose from 33 per cent to 34.9 per cent of total income during the half.

The weak spot was the four per cent increase in new dealing clients. The company has 130,000 active clients.

An issue for analysts at yesterday's results briefing was the 20 per cent increase in employee costs and 29 per cent increase in occupancy costs.

OzForex chief executive Neil Helm said the company was investing in growth and, despite high costs in some areas, the EBITDA margin rose from 38.3 per cent to 41.3 per cent.

While the consumer remittance market is mature and highly competitive, the company expects to achieve growth through its white label operations. It has partnerships with Macquarie Group, ING Direct, Travelex and MoneyGram.

The company said that the MoneyGram and Travelex relationships were behind initial expectations.