Ozforex shares surge on first day

Shares in international payments company Ozforex Group Ltd opened with a bang on their first day of trading.

Ozforex shares first traded at $2.59, up almost 30 per cent from the company’s IPO price of $2, or 21.7 times its 2014 forecast net profit, according to stock brokers Ord Minnett.

At 1205 AEST the shares were trading at $2.53, giving it a $600 million market value compared with a $480 million market capitalisation following Ozforex’s IPO.

The stock is being “very well bid with a lot of institutional support,” Tony Paterno, a senior investment advisor at Ord Minnett in Melbourne, said.

“It’s very good for the market as it sends a lot of good signals to companies waiting in the wings looking to float their businesses,” Paterno told DataRoom. “There’s a good secondary market appetite for IPOs.”

In the 12 months to June 30 this year, Ozforex made 460,00 international payment transactions worth $9.1 billion for 91,800 customers. The company forecasts a net profit of $17.8 million for the in the 12 months to September 2014, compared with $17.4 million in the 12 months to September this year.

Ozforex says it can grow its business by online registration process, expanding its applications for mobile and tablet devices, further expand its US business and broaden its range of financial services. The company has 170 employees in London, Hong Kong, Auckland, Toronto, Singapore, San Francisco and at its Sydney headquarters.

It offers its services 24 hours a day, seven days a week via email or telephone through seven websites and four branded partnership websites.

Sixty-seven per cent of the company’s turnover, in the 12 months to June this year, was direct payment transactions.

Average individual transaction values by consumers are $14,300 and for businesses the average is $29,000. They are typically used to mortgage payments in another country, pay student costs, repatriate savings, accept payments or hedge foreign exchange risk.