Transcription of Finance News Network Interview with OzForex Limited (ASX:OFX) CEO, Richard Kimber
Carolyn Herbert: OzForex Limited (ASX:OFX) provides international payment services across six continents, employing over 200 staff in its offices in Australia, New Zealand, the US, Canada, Europe and Hong Kong. OzForex was founded in 1998, but has since grown from being an Australian based foreign exchange information website, to a specialist international payment service provider.
I’m Carolyn Herbert and joining me at the CEO Sessions in Sydney is the company’s CEO, Richard Kimber. Richard welcome to FNN.
Richard Kimber: Thank you.
Carolyn Herbert: Can you start by introducing OzForex?
Richard Kimber: OzForex is a global company based out of Australia, and we send money internationally. We’re a growth company, we’re also a Fintech company and we’re a business that’s growing at a great rate.
Carolyn Herbert: Can you give investors a snapshot of the company’s financials and growth?
Richard Kimber: We’re a very profitable company; we’ve been around for quite sometime. Last year we did net operating income of around $90 million. We’ve got a good contribution margin. We had EBITDA of $35 million and a net profit after tax of $25 million. The last quarter we just passed, we had a record quarter where we had $25 million of net operating income.
Carolyn Herbert: You were appointed as CEO for OzForex in June and you’ve implemented an acceleration strategy. Can you tell us a bit more about this?
Richard Kimber: The accelerate strategy is really designed to take our historical growth rate, which has been around 20 per cent, and to take it to another level. And what we’re looking to do is to really broaden the growth of the business, and to accelerate our rate of penetration, particularly internationally. What we’ve done is set out an ambitious goal to double our revenue over three years, from around $100 million to over $200 million.
Carolyn Herbert: OzForex is undertaking a global rebrand, which will see the name replaced. Why have you decided to change the name of OzForex, and how does it fit within the new strategy?
Richard Kimber: We’ve decided to amalgamate under a single brand globally, and the single brand will be called OFX. And that’s also our stock code. The reason we’ve chosen to do this is really for marketing purposes, because as we’re a global business, historically we’ve operated under seven different brands, OzForex in Australia, USForex in the US, UKForex in Europe. And really what we’ve found is that really isn’t an optimal way of doing our marketing.
So increasingly, as more and more people use the Internet, we expect people to be able to leverage marketing we do in one country,in another country. So we expect to see a lot more leverage from our marketing activities. And also in terms of unprompted recognition, we see that as an area of opportunity for us.
Carolyn Herbert: As you say, you’ve set your sights on the US. Why the US and how do you plan to achieve this?
Richard Kimber: The US is an enormous market and that’s the real reason we’ve focused our growth in that area. We’ve been established in Europe for over 10 years and we’ve been spending the last couple of years getting our licencing in the US. The US market is a phenomenal market in terms of the size of the population. But also, it has a great penetration of small and medium businesses and that’s a key segment for us, in terms of our growth.
So not only do we operate our services for individual customers, but also the small and medium enterprise. And the US, like Australia, has a vast number of these people that are really underserved by banks.
Carolyn Herbert: What role do partnerships play in your strategy?
Richard Kimber: Partnerships play a key role in our strategy; they’re really about driving scale. What we’re looking to do there is partner with organisations and companies with large brands, but big installed customer bases. And the opportunity there for us is to really leverage our payments infrastructure. We have a large global platform that can do currency transfers in 50 different currencies. So using partnerships is a key way for us to accelerate our growth. So it’s core to our strategy, as it builds on our organic growth that we’ve already got.
Carolyn Herbert: Are acquisitions something you’re considering?
Richard Kimber: They are something we’re considering, at the right price of course. But the industry is going through some forms of consolidation; we’re seeing that with a number of transactions overseas. So we do keep an eye on the market. There aren’t a lot of players out there, so the opportunities will be quite selective.
Carolyn Herbert: Finally Richard. What are you hoping to achieve in the next 12 months?
Richard Kimber: The next 12 months is the key start to our accelerate strategy. So we’re going to do the rebranding and we’re also launching a new website. We’ve got a number of new and important additions to our team. In terms of our milestones though, we’ll see the first results from our accelerate strategy over the next 12 months. So it’s a very exciting time for our company.
Carolyn Herbert: Richard Kimber, thanks for the update on OzForex.
Richard Kimber: Thank you.