There are precious few companies that would dare upgrade their profit guidance in the face of the COVID-19 pandemic.
The latest ASX company to do so this morning doesn't sell hand sanitises or toilet paper either. It's international funds transfer group OFX Group Ltd Fully Paid Ord. Shrs (ASX: OFX).
The OFX share price soared 17% to $1.24 on the news when the S&P/ASX 200 Index (Index:^AXJO) (ASX:XJO) tumbled 3.3%.
Outperforming the sector
Most sectors are losing ground, particularly financials. The big banks like the Australia and New Zealand Banking Group (ASX: ANZ) share price and Commonwealth Bank of Australia (ASX: CBA) share price crashed by around 5% each.
Other fintechs like the Afterpay Ltd (ASX: APT) share price are also faring poorly on renewed worries that the coronavirus outbreak will restrict liquidity and hurt demand.
The panic that's driving people to hoard necessities at Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) is extending to OFX Group.
Panic buying benefits OFX
People are rushing to send cash back home as a growing number of countries shut their boarders and impose draconian quarantine restrictions.
One also has to wonder if the falling Australian dollar to multi-decade lows is adding to the panic transfers.
"While market conditions in the first few months of the second half were mixed, volatility related to market uncertainty from COVID-19 has stimulated trading activity across both the Consumer and Corporate segments," said the company in an ASX statement.
"This has resulted in strong turnover and transaction volumes in February and March to date."
Profit upgrade thanks to the pandemic
The sharp jump in transactions means that OFX underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY20 will range between $36.8 million and $38.3 million.
That's a pretty good outcome as it implies OFX's second half EBITDA will jump at least 23% over what it achieved in 1HFY20.
What's more, the updated EBITDA guidance is ahead of the $32.2 million that the group posted in the last financial year.
More good news for OFX
Management reiterated its FY20 expectations that it will achieve full year revenue growth and stable net operating margins, excluding IPS.
"The Company continues to generate good levels of cash and is well placed to provide additional collateral to its banking counterparties to support heightened trading levels," added the company.
"It expects to end the year with $56m+ net cash held."
In a crisis, cash is king. Just ask their customers.
