Fexco focuses on innovation

The Kerry-based financial services company is always looking forward and continues to expand, writes Lorraine Courtney

3rd March, 2019
Denis McCarthy, chief executive, Fexco Pic: Valerie O’Sullivan

‘Fexco continues to evolve through acquisition diversification, a strategy that has served the group well,” said chief financial officer Ger O’Sullivan.

“As a company, we take calculated risks - all investments are considered within certain parameters and we continue to re-invest in Fexco’s innovation division.”

Operating profit at the Kerry-based financial services group, which is led by chief executive Denis McCarthy, more than doubled to €13.7 million last year as it benefited from acquisitions and what it said was a strong year for its foreign exchange and payments operations.

Financial performance highlights for 2017 include income up 8 per cent to €211.8 million, profit before tax up 80 per cent to €19.3 million and operating profit growth of 139 per cent to €13.7 million.

Fexco now has net assets of €349 million and cash balances of €182 million, with 30 per cent of revenue generated from customers outside Europe.

The firm has recently taken a significant minority stake in Airborne Capital, a specialist aircraft leasing and asset management company. The new aviation unit, Fexco Aviation Services, will perform administration and accounting services for aviation-related businesses. It will also provide managing agent services for aircraft and aircraft engine owning vehicles in the asset-backed securitisation sector.

“We had been looking at the aviation industry for some time,” said O’Sullivan. “It’s a sector that is seeing tremendous growth right now, but one that is not easy to penetrate. We are very proud of our achievement there.”

Fexco’s retail foreign exchange business operates more than 100 branches in Ireland and Britain with a further 950 franchisees.

Growth in this division is set to continue following two recent British acquisitions: Change-Link in February 2018 and the Thomas Exchange Group in August.

“This is a very solid part of our business and it’s what allows us to invest in new products,” said O’Sullivan.

Last year also saw the expansion of Fexco’s property management operations through the acquisitions of Crabtree Property Management and Remus Management, who between them manage more than 37,000 residential units in Britain.

This builds on Fexco’s existing property management joint venture in Australia - the Pica Group. Fexco has a broad number of business interests and provides foreign exchange services around the world.

“Fexco is a brand with a very diversified set of products beneath it,” said O’Sullivan. “We have multiple strands to our business, but with a big orientation towards fintech.”

Fexco has a significant global presence employing 2,300 staff across its Irish and international operations spanning 29 countries; however, when it comes to planning for the future, the company is very community-orientated.

In August 2018, Fexco announced a significant expansion of its operations, creating 175 new jobs over three years. The high-skill jobs are all designated for Killorglin, Co Kerry, where more than 1,000 staff are employed by the group.

“We are always trying to make sure that Fexco will be here in Killorglin for the long run. That’s the main thing that management have on their radar,” he said.

“We have a couple of new products on the innovation side at the moment and we are looking to get two or three products that could play a global role and set us up for the future.”

O’Sullivan was not ready to talk about specifics. “It’s early days but we have a few things in the works and we are feeling really good about the future,” he said.

“Otherwise we are enhancing our suite of products, continuing to hire and expand our headcount. The next two or three years are showing lots of promise. Fexco is a company that has always put a huge emphasis on innovation. Everybody here is always thinking about it, about what we could do next and about what our customers want.

“It’s a driving force for us and crucial in the fintech world where things change quite quickly and nobody can afford to sit on their laurels.”

The group is constructing a 44,000 square foot new research, development and innovation centre near its Killorglin global headquarters.

Being recognised by Deloitte is a big plus for Fexco. “Internally, it boosts the morale of staff - and externally it is beneficial to have some- one benchmarking our business and management team. It’s excellent from a networking point of view for us too.”

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