Kerry-based financial services group Fexco plunged into a net loss of almost €48 million last year as revenue in its foreign-exchange and payment-services businesses slid during the Covid-19 crisis and two subsidiaries fell into administration.
The outcome compared with a €14.6 million profit for 2019 and came as total group income fell by 29 per cent to €173.1 million. However, the company, founded four decades ago by Brian McCarthy, said it had returned to operating profit in the fourth quarter of this year.
Fexco stomached a €25 million financial hit during 2020 as two subsidiaries, Thomas Exchange Global Ltd, and No 1 Currency Ltd, were put into administration as a result of the sharp downturn in foreign travel during Covid-19. Fexco said that it was rebuilding its retail foreign-exchange operations in the UK and had reopened 60 stores.
The group received €14.3 million by way of UK and Irish Government wage and other supports during last year, while its total number of employees fell by 320 to 2,270.
“The wage subsidy schemes helped Fexco sustain more jobs than would have been possible otherwise and Fexco is grateful for the support received to date,” a spokesman said.
“We ceased claiming the subsidy as travel restrictions eased and our revenue improved in the second half of 2021, albeit still materially below 2019 levels.”
It did not pay dividends last year.
Sale of stakes
The company has significantly enhanced its financial position in 2021 with the sale of its 51 per cent share of Goodbody Stockbrokers to AIB for €70 million and well as receiving €30 million from the sale of its share in fintech Taxamo, which was acquired by US tax-compliance software and services company Vertex. Taxamo was led by Brian McCarthy’s son, John.
At the end of 2020, Fexco had €1.04 million out on loan to then director Roy Barrett, who was also head of Goodbody Stockbrokers at the time. The facility also had accrued interest of €532,394. The company confirmed that the loan and interest has been repaid in full.
The loan was separate to a €80,000 interest-free loan Mr Barrett received from from Goodbody in 2018. That was the result of an overpayment to Mr Barrett of a bonus in 2016, which had been converted into a loan. Sources said last February that that loan had been fully paid.
Mr Barrett received about €10.6 million from the sale of his 7.7 per cent stake in Goodbody to AIB. He resigned from the stockbroking firm and stepped down from the board of Fexco in recent months, after the Goodbody sale went through.