FOREIGN exchange giant Travelex today revealed that its private equity majority owner is looking at a possible stock market flotation which could value the business at more than £1 billion.
Travelex, which is the largest non-bank forex business in the world, with 1,500 stores and 1,250 ATMs in 27 countries, also announced a 21 per cent jump in underlying profits last year to £80 million. Income rose 12 per cent to £695m.
Peter Jackson, group chief executive, said: “With this positive backdrop and our strong financial performance, we are currently evaluating our strategic options, which may include an IPO [initial public offering].”
The rise in income was driven by expansion in emerging markets and a boost from increased ownership of smartphone or tablet devices, which make it easier for customers to order cash while on the move.
Travelex – majority owned by private equity firm Apax since 2005 – is one of a number of companies running the rule over stock market flotations.
Jackson said: “The secular growth in international travel continues to drive increasing demand for foreign exchange services and higher transaction values through our stores and online.”
Travelex, founded in 1976, co-ordinates more than 37 million retail transactions a year, and foreign exchange analysts said the business would be worth more than £1bn.
Jackson declined to speculate on the valuation or the timeframe for an IPO, but said the Travelex brand was “very well known around the world”.
The company also said it was looking to expand into more new markets, having launched operations in Panama in 2013 and Guam earlier this year.
“There are some markets we’re not as well represented in. Turkey is a market that I’ve been looking at for a while,” Jackson said.
At the estimated stock market valuation, Travelex, founded by its current chairman Lloyd Dorfman, would enter the FTSE 250 index,
Jackson, who became chief executive four years ago, has reshaped the company by selling a business-to-business forex platform in 2011 for £600m and buying companies to bolster its consumer operations.
It bought a 49 per cent stake in Brazil’s largest independent retail currency market last year and it aims to buy the rest before November.
Travelex is also believed to have tried to gauge interest in a potential trade sale of the business as an alternative to an IPO.
It is thought that American Express and a number of Asian banks, including state-owned lender Industrial & Commercial Bank of China, have considered potential offers without anything crystallising.