46% rise in Fexco pre-tax profits

FEXCO, the Kerry-based foreign exchange to stockbroking group, reported a 46% rise in pre-tax profits for 2002 despite a challenging market climate.

Annual results released yesterday showed that pre-tax profits grew strongly, from 12.3m in 2001 to 18m in 2002.

Having shifted its year-end from February to December, turnover for the 10 months to end December was 73.5 million, and for the whole of 2002 was 87.6 million, an 11% rise on the 2001 figure.

Chief financial officer Michael O’Sullivan said the profits figure included a number of one-off items, including a profit on the sale of 50% of its take in Omnipay, an international payments processing firm, to First Data Corporation, which holds a 25% stake in Fexco.

However, the company’s global VAT refund business suffered from the reduced number of international travellers due to SARS and the strength of the euro against the dollar.

“The bulk of the global refund is in Europe and very dependent on tourist traffic coming from the US, Japan and China and because of those economic events, it has been adversely impacted and we have seen the knock-on from our 20% stake. It was a difficult year for anyone involved in tourism,” said Mr O’Sullivan.

“It has improved gradually in the past couple of months,” he added.

Although the company has moved away from pure financial services and stockbroking, it said yesterday that it would retain the broking arm as it was still profitable.

More than 50% of the company’s turnover is generated from its Western Union money transfer division, where it is the master agent in Britain and Ireland. Fexco said this part of the business had a strong year and grew profits. At the end of 2002, Fexco had cash of 30 million and said some of this could be used on acquisitions.

Last week, Fexco announced plans to acquire the remaining shares in Prudential Investment Corporation of Australia, in which it already has a 39% stake.

Fexco deputy managing director Des Crowley said while the business had traditionally been associated with financial services, it had repositioned itself over the past couple of years.

“We has been pigeonholed as a financial service company and that was perhaps not the most accurate description of our activities and we would like to be, as we have the products, a global payment services provider.”

Fexco employs nearly 900 people, 550 of whom are based in Kerry, and was formed by chairman and main shareholder Brian McCarthy in 1981.

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