OzForex CEO resigns

OzForex has become a bit accident-prone in recent weeks. First of all it lost Westpac as a banking partner, and now it's lost its chief executive. After seven years in the role, Neil Helm has decided that 'following the successful IPO in 2013 and the Company's first year of operation as an independent listed entity and with the Company in such great shape, I feel the time is right for me to make a lifestyle change and spend more time with my family'. He will remain in the role 'over coming months until a successor is appointed' and will help with the transition.

Fair enough. We're not given to being conspiracy theorists, so we're generally happy to take these things at face value. But then again, if the company was firing on all cylinders, the atmosphere was great, and everyone was kicking goals, you'd think he'd want to hang on for a bit.

The assertion that OzForex is 'on track to deliver financial results in line with market expectations', is also a bit thin, since those forecasts haven't changed in three months, during which time the Aussie dollar has fallen 10% against the US dollar. The company should benefit from a lower Aussie dollar as it means people have to spend more to buy the same goods and services overseas, while currency volatility apparently encourages new clients to sign up.

So, as with the news on Westpac, today's announcement takes some gloss off the company – and it needs plenty of gloss to support a forward price-earnings ratio of around 23. As a result, we feel a wider margin of safety should be required of the stock and we're reducing our Buy price from $2.50 to $2 and our Sell price from $4 to $3.50. With the price at about $2.30, this means we're also downgrading to HOLD.

Note: Our model Growth and Income portfolios hold shares in OzForex.

Disclosure: The author owns shares in OzForex.