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Travelex hit by strong Sterling

Sterling's recent strength has been good news for holidaymakers but currency exchange firm Travelex highlighted the negative impact on its business today.

The unfavourable currency movement dented earnings derived overseas, although the company still racked up a 7% rise in revenues to £155.8 million and a 266% jump in profits to £11.7 million for the first quarter of 2014.

Travelex, which has more than 1,500 stores and 1,250 cash machines in 28 countries, benefited from 17 new outlets and 71 new cash machines on high streets and airports worldwide in the three months to March 31.

The strength of the pound against other major currencies over the last year meant core retail revenues slipped 4% to £103.9 million as a result.

However, the group put its growth in profits down to its expansion strategy.

Travelex bought a 49% stake in Grupo Confidence, which was Brazil's largest independent retail foreign exchange business last year. This purchase added £13.3 million to its sales and £2.3 million in profits during the first quarter.

And during the first three months of this year Travelex struck a deal to buy 75% of Turkish rival Arti Doviz for £24.8 million.

The business said it had made a good start to 2014 and that it was trading in line with expectations, helped by a 19% rise in online and mobile sales

Chief executive Peter Jackson said: "We have made further progress against our strategic priorities with continued expansion in to new regions, most recently in Turkey, and further growth from our digital platform."

In March the company confirmed it was considering a stock market flotation in a move that could value the business at £1 billion.

Travelex has been majority owned by private equity firm Apax since 2005.

However, alongside a potential listing, it has reportedly reached out to potential buyers to gauge their interest in a potential takeover.

It has been reported that American Express and a number of Asian banks, including state-owned lender Industrial & Commercial Bank of China, have been approached about buying the business.

The company was founded in 1976 by its current chairman Lloyd Dorfman.

Mr Jackson, who became chief executive four years ago, has reshaped it by selling off a business-to-business foreign exchange platform in 2011 for £600 million and snapping up companies to bolster its consumer operations.

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