Insider: £2m buying at UK success story plus AstraZeneca

Changes at the top triggered bargain hunting at this impressive FTSE 250 growth story, while the chair of the country’s largest company also spent heavily after a share slump.

16th September 2024 08:34

Graeme Evans from interactive investor

The founder and outgoing boss of fintech Alpha Group International (LSE:ALPH) has topped up his stake after shares in the FTSE 250 newcomer were shaken by his plans to stand down.

Morgan Tillbrook announced last Tuesday he intended to go at the end of the year, having taken Alpha from a market value of £65 million on its AIM debut in 2017 to a global player now worth more than £900 million.

Invest with ii: What is a Managed ISA? | Open a Managed ISA | Transfer an ISA

Alpha, which started from an office in Berkshire 15 years ago, provides clients with technology and consultancy services for their FX risk management and other banking operations.

Tillbrook has pledged to retain a stake of more than 10% over the next three years, but doubled down on this commitment last week by spending £500,000 on another 24,000 shares.

His purchases took place at 2,000p and 2,070p, which compares with August’s record high of 2,600p and the 2,350p seen before the announcement of the leadership transition.

Tillbrook’s successor is current Alpha chair Clive Kahn, whose career leading and scaling financial services companies in FX and payments has included as CEO of Travelex.

Having earlier pledged to meaningfully increase his existing stake of 0.83%, Kahn last week spent about £1.5 million on Alpha shares in two tranches at prices of 2,077p and 2,117p.

The appointment of Kahn comes after he left takepayments, the card acceptance business he acquired with partners in 2015 and recently sold to Nasdaq-listed Global Payments.

His nine-year tenure as Alpha chair is also ending later this year, a coincidence that Tillbrook said “feels like the stars have aligned”.

He added: “Clive has often said to me that he is a better CEO than chairman, and whilst I think his track record shows he has been fantastic at juggling both, I am naturally excited by what this will mean for Alpha.”

Tillbrook said his decision to step down as the CEO had been made with the confidence that the business is on a “strong and exciting growth trajectory”.

House broker Peel Hunt praised Tillbrook for creating a “significant UK success story”, having grown total income from £8.5 million before the IPO to last year’s £186 million. The company left AIM for the main London market in May, securing FTSE 250 status shortly afterwards.

In a market full of generic FX risk management solutions, the broker said Tillbrook had established Alpha as a strong, differentiated player through bespoke hedging strategies for each company based on their characteristics and needs.

Whilst disappointed to lose Tillbrook it said that Kahn’s fintech credentials and history with Alpha made him an outstanding successor.

The company’s interim results at the start of September showed revenues up 16% to over £64 million as average client balances increased by 11% to £2.1 billion. Pre-tax profits increased by 18% to £60.8 million and underlying earnings per share by 87% to 37.1p.

Shareholders are due to receive an interim dividend of 4.2p a share on 11 October, an increase on the previous year’s 3.7p. It completed a £20 million share buyback in June and is in the process of buying another £20 million.

Peel Hunt, which has a price target of 3,300p, sees medium-term top line growth in the mid-to-high teens at a margin above 40%. This compares with 38% in half-year results.

Astra drop is buying opp

A Sell recommendation on AstraZeneca (LSE:AZN) shares was countered on Friday when the company’s chair Michel Demaré spent £236,000 increasing his stake.

His purchase took place at 11,793p, which compares with 12,688p on Monday before Astra disappointed analysts with the detail of late-stage trial results for its Dato-DXd lung cancer drug.

Deutsche Bank said on Friday it sees risk-reward on Astra as “outright challenging” on a six-12 month view as it switched back to a Sell stance from Hold. Its target price moved to 10,500p.

The bank’s forecasts are materially below the mid-term consensus, having until recently been a long-standing supporter of Astra’s oncology-driven innovation and growth story.

UBS also has a Sell stance and price target of 11,300p. The shares touched a record high near to 13,300p earlier this month, leaving the value of the FTSE 100’s biggest stock above £200 billion.

Astra shares were the most traded on the interactive investor platform on Friday morning, with buy orders accounting for two-thirds of the trades.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Get more news and expert articles direct to your inbox