From rebound to rescue: how Argentex collapsed on untested currency swings
By Charlie Conchie, Stefania Spezzati and Nell Mackenzie
LONDON (Reuters) -In early April, Argentex's chief executive Jim Ormonde and chief financial officer Guy Rudolph were buying shares in the London-listed foreign exchange broker as the stock rebounded from a March slump.
Ormonde, installed 18 months earlier amid a flagging stock performance, said in an April 2 statement on the company's annual results that Argentex had "reset" in 2024 and was now "well placed to return to profitable growth." In the year to date, its shares had rallied more than 50%.
What followed was a dramatic swing in financial markets and a dizzying decline in the company's liquidity position.
Within weeks, Argentex would become one of the first high profile corporate victims of market volatility set off by the global trade war. IFX Payments took over Argentex in a rescue deal for just a fraction of what it had been worth, and the CEO and CFO have gone.
Argentex declined to comment. UK-based IFX did not respond to requests for comment.
April 2 was also "Liberation Day," when U.S. President Donald Trump unveiled sweeping reciprocal tariffs against numerous countries, triggering heightened volatility for trading firms as currency markets moved widely.
The safe-haven Swiss franc surged roughly 7% against the U.S. dollar during April, while Deutsche Bank's currencies volatility index, a measure of currency swings, rose as much as 28%, to its highest level in two years.
Argentex had navigated previous big market routs such as the fall of sterling against the dollar in 2022, Brexit and the COVID-19 pandemic.
But while it had done scenario modelling and stress testing, it hadn't planned for the dollar's rapid devaluation against many major currencies, according to two people familiar with the company. They spoke on condition of anonymity because the information was private.
Argentex was most exposed to a sudden strengthening of the pound, Swiss franc and the euro against the greenback, one of the people said.
ZERO-ZERO LINES
In its 2024 annual report, Argentex said that "regular stress testing is performed to ensure the group has sufficient collateral pledged and other unencumbered resources to cover its current and potential obligations in the event of a significant market movement."
Yet when the market moved against it, Argentex was left exposed to cash calls from its liquidity providers and unable to call margin from many of its clients due to its use of zero-zero lines, according to the person.
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After a stellar improvement in Premier League prize money last season, alongside the £40million sale of Ivan Toney in August, they may well have returned to the profitability they enjoyed in their first two years in the Premier League. Wherever the bottom line lands at the end of June, they'll be a fair distance from the £58million we project they could lose and still avoid a PSR breach. Behind Chelsea, Brighton were the second-highest transfer spenders in Europe last summer, parting with just under £200million on new players. Despite that, they had, and have, little to fear when it comes to PSR. Such has been the impressive running of Brighton, their combined pre-tax profit over the past two seasons was a whopping £208.4m. That is before any deductions that can be made for PSR purposes. With depreciation costs alone running at around £8million per year, and a Category 1 academy in tow, we project Brighton could lose £295m in 2024-25 before running afoul of Premier League financial rules. That's with a lower loss limit of just £15million, too. Advertisement Brighton have received no explicit equity funding from owner Tony Bloom in recent years, though he did restructure £200million of debt owed to him such that it can be converted to equity at his discretion. That boosted the equity element of Brighton's balance sheet by £156.1m; if we took that as 'secure funding' under its PSR meaning, the club would enjoy the maximum loss limit and we project they could lose a whopping £385m in 2024-25 and still comply — by far the highest such figure in the division. For a while one of England's most consistently profitable clubs, Burnley have become loss-making since their December 2020 takeover, recording a combined deficit of £64.4million in the past two accounting years. Their PSR position is subject to a couple of quirks; not only does their accounting year finish at the end of July, but their recent bouncing between leagues (two relegations and two promotions in four seasons) means their allowable loss limit for 2024-25 sits at a maximum of £61m. Or it would do, but Burnley have received no equity funding in recent years. As a result, their loss limit over the three-year PSR cycle to the end of next month is £15million and, at initial glance, that looks a difficult mark for them to hit. Not only do the club have those £64.4m losses to include, but the size of expenditure they can deduct for PSR purposes is minimal compared to many. Burnley's depreciation bill in 2023-24 was just £2.6m, and they only this month achieved Category 1 academy status; lower-ranked academies cost less to run. We project Burnley need to turn a profit in their 2024-25 accounting year, putting the required sum at around £20million. That's around a £48m swing from 2023-24, and would need to be achieved in a season where their broadcast income was slashed on the back of relegation. Fortunately, Burnley were active sellers last summer, generating post-July 2024 proceeds on player sales of £87.7million. That should, we expect, prove just about enough to get them to the profitability they need to be at. They'll also benefit from being able to exclude the extra costs incurred by promotion in their 2024-25 PSR calculation. Section 6, Appendix B of the EFL's rules allows clubs to recognise promotion bonuses in the season after they go up. That rule is missing from the Premier League's regulations, and The Athletic has confirmed no exclusion will be allowed under its PSR next season (the costs will remain in the 2024-25 accounting period for any PSR calculations submitted to the Premier League). For EFL PSR, which Burnley are governed by to the end of July, the bonuses are pushed into the 2025-26 season. PSR-busting tactics at Stamford Bridge have gained plenty of headlines in recent seasons, and for good reason. Through the intra-group sales of hotels, car parks and even their own women's team, Chelsea have turned a rather tricky PSR position into one whereby they enjoy mammoth headroom — at least domestically. Advertisement Chelsea's pre-tax result across 2022-23 and 2023-24 was profitable at £38.3million, even before any costs are deducted from their PSR calculation — and the deductions they can make are chunky. That sale of the women's team means they won't benefit from any cost deductions in that respect in 2024-25, but they're hardly necessary in terms of current compliance. Based on our projections, Chelsea could lose £300m and comply with Premier League PSR. They'll lose a lot, but nowhere close to that much. The picture is rather different in Europe, where UEFA strips out intra-group sales. Chelsea are already in talks over a financial settlement for a breach based on their accounts for 2023-24, and another hefty loss in the last one won't smooth their position there. The club's return to the Champions League next season will at least help for 2025-26. The newest name on the FA Cup have endured a half-decade of losses since 2020, and Palace entered the 2024-25 season with two-year combined pre-tax losses of £65.3million. The south London side have received plenty of equity funding in recent years, so their PSR loss limit is the maximum £105m allowed, and they're unlikely to hit that level of three-year loss even before we deduct allowable expenditure on the likes of infrastructure, youth and community development and their women's team. While the club strengthened last summer, the fees on new players were outweighed by sums received from selling Michael Olise, Joachim Andersen and Sam Johnstone. Per Palace's latest accounts, their net incomings from transfers after June 2024 were £38.7million. Given they've always stayed well within their PSR limits in years where they haven't sold players for much, it's clear Palace will come nowhere close to the £90m loss we believe they could make and still remain PSR-compliant for 2024-25. Everton's issues with PSR compliance have been legion in recent years — including points deducted — and despite improvements off the field, not least the club finally being taken over by The Friedkin Group in late 2024, they're not fully out of the woods yet. That's despite them completing a deal to buy loanee Carlos Alcaraz before May's end; that date would have seen his transfer fee jump up, and, from a PSR perspective, signing him so late in the current accounting period won't have too great an effect on the bottom line. Advertisement In the prior two seasons, the club lost a combined £142.3million before tax, and we know from previous disclosures that 2022-23's PSR loss was £62.7m, against a pre-tax loss of £89.1m. That left them needing a PSR loss of below £38m in 2023-24, which they managed, but not with a great deal of headroom. Accordingly, with those figures still part of their calculation, we estimate Everton need to keep 2024-25's pre-tax loss below £39m. The operating loss pre-player sales for 2023-24 was £82.3m, so even the big sale of Amadou Onana to Aston Villa last July mightn't have been enough on its own to bring them to where they need to be. Prize money from the Premier League likely only ticked up a small amount, and while the lack of legal battles has saved money, Everton's PSR compliance looks to be a close-run thing again, at least to the end of June, albeit one we believe they'll be just about OK on. After this month, that £62.7m PSR deficit from 2022-23 will disappear from view. Fulham were close to a PSR breach in 2022-23, the first season of their current stint in the Premier League, ultimately avoiding one via some Covid-19-related deductions as well as costs incurred on the redevelopment of Craven Cottage's Riverside Stand. Since then, the club have sailed away from both the lower reaches of the table and regulatory trouble, and with 2024-25 being the first year in which they benefit from the full £105million PSR loss limit (as all three of the seasons in their 2022-25 PSR calculation were spent in the Premier League), Fulham should have few worries this time around. Combined pre-tax losses in the previous two seasons total £58.5million, and we estimate that, after removing allowable costs, Fulham could lose up to £77m for 2024-25 and remain compliant. That looks unlikely, even with underlying operating losses as high as £64.9m a season ago. Advertisement This time around, Fulham have enjoyed greater Premier League prize money (we reckon they've seen an over £10million increase), higher player-sale profits (another £10m or so) and, crucially for a club with a history of low gate receipts in a ground that holds less than 30,000 people, the benefits of more premium offerings for matchday attendees. Leeds United's return to the top tier at the second time of asking brought thousands onto the city's streets and, you suspect, relief in the boardroom. The Yorkshire club spent heavily on trying to avoid relegation and, when that failed, on getting back to the Premier League as quickly as possible. In the previous two seasons, Leeds' pre-tax loss totalled £94.5million, which isn't great when we consider the 2022-25 PSR cycle will include two years of EFL loss limits. In all, they can only lose £61m over the three-year period and remain compliant. A £2.5m 'Cost of Living Allowance', introduced by the EFL for the 2024-25 season as a deduction in clubs' PSR calculations, will help towards meeting that sum (fellow promoted sides Burnley and Sunderland will benefit from it too). From a PSR perspective, after taking into account the relevant deductions, including the one above, we estimate Leeds could lose around £42million for 2024-25 and stay within financial rules. Usefully, as detailed in our Burnley section, promotion bonuses (totalling £19.2m, per Leeds' accounts) won't be included in their current PSR calculation. As well, the sales of Georginio Rutter, Crysencio Summerville and Glen Kamara generated around £70m in sales proceeds (the profit figure is lower). The recent sale of Rasmus Kristensen to Eintracht Frankfurt provided further profit. Their 2023-24 operating loss before player sales was £76.3m, and broadcast income fell last season by around £8m due to a reduced parachute payment. Getting the pre-tax loss down to the £42m mark we've estimated looks a bit of a squeeze, but The Athletic understands Leeds aren't in the position of needing to sell before the end of June. If they do, it will be because the deal makes sense, regardless of its timing. Chairman Paraag Marathe has previously stated his hope that Leeds have 'a PSR issue every year, because everything we do is going to be about maximising our ability to be as competitive as we can be'. They will be close to the limit this month, but should be just about fine. Despite breaking even since Fenway Sports Group bought the club in October 2010, Liverpool's pre-tax result for 2023-24 was their worst ever — £57.1m was shipped, which on top of a £9m deficit a year earlier put the club's combined loss at £66.1m for the first two years of the current PSR cycle. Liverpool haven't been funded by equity recently, so their losses are limited to £15million over three seasons. They do, however, have chunky allowable costs. The club's infrastructure accounts for around £16m in annual depreciation charges, while they also run one of the more expensive youth setups in England. Advertisement We estimate Liverpool could have lost £75million in their 2024-25 accounting period (which ended on Saturday) and still have been compliant with Premier League rules. In reality, with booming revenues and player sale profits of £41.9m (around double the size of 2023-24), Liverpool were considerably more likely to have been profitable last season than to have strayed anywhere close to their loss limit. City's January transfer splurge added over £20million in transfer fee amortisation — and unknown amounts in wages — to their 2024-25 costs, in the same season their earnings from Europe dropped significantly after they exited the Champions League in the first knockout round. Not that there's any cause for concern in a PSR sense. City have booked significant pre-tax profits in recent years, and lost prize money from last season at home and in Europe will be, at least in part, offset by monies from this summer's Club World Cup. City's profits over the previous two seasons total £154.1million, and that's before allowable costs are deducted. So profitable have the club been that ownership has had little need to inject equity. That means City's PSR loss limit for the current cycle is just £15m, but no matter. We project they could lose close to £300million for the season just ended and be fine, PSR-wise. As detailed by The Athletic, Manchester United's PSR position is calculated using the accounts of Red Football Limited (RFL), rather than Manchester United plc (RFL is a subsidiary of the plc entity). That's a pretty big factor, as in recent years the pre-tax result of those companies has diverged significantly. In 2023-24, Manchester United plc lost £130.7million before tax; for RFL, the deficit was just £36.2m. Per UEFA's most recent European Club Finance and Investment Landscape report, pre-tax loss figures for United were €22m (£19m at the exchange rate used in the report) in 2022-23 and €42m (£36m) in 2023-24 — an exact mirror of the pre-tax results in RFL's accounts. The difference stems partly from RFL including none of the costs borne by the plc as part of Sir Jim Ratcliffe's share purchase in February 2024, but also from the structure of loans within the wider Manchester United group. RFL's bottom line benefited from booking interest income on intra-group loans owed to RFL by entities further up the corporate chain, as well as recharging staff time to elsewhere in the business (sources have told The Athletic this time comprised plc-related business undertaken by executives, such as investor relations, rather than football-related activities). Foreign exchange differences in RFL were more favourable than at the plc level, too. Based on RFL's loss figures, it's a struggle to see how there were ever any PSR worries at the club — though that's only true once Ratcliffe's arrival was accompanied by equity investment, which raised United's three-year PSR loss limit from £15m to £105m. There is also the complication whereby we do not know exactly which costs United were required to add back into their PSR calculation. Both the Premier League and UEFA use a 'reporting perimeter' that requires you to include all costs 'in respect of (that club's) football activities', including any amounts that occur under the auspice of other legal entities. According to Old Trafford sources, for the purposes of their PSR calculation, United are required to strip out any foreign exchange differences and the impact of intra-group loan interest. That means United's pre-tax loss in its PSR calculation is larger than that shown in RFL's accounts, though still below the loss in the plc entity. RFL's pre-tax loss across the 2022-23 and 2023-24 seasons was £55.1million, and United's loss limit across the three-year PSR cycle is £105m following Ratcliffe's injections of equity in 2024. After taking into account allowable costs, and adjusting for exchange differences and the intra-group interest, we reckon United could lose around £141m in 2024-25 and still comply with Premier League rules. In other words, they'll be fine this summer, however surprising that may seem. Newcastle's PSR troubles this time a year ago were well documented, and led to the sales of Elliot Anderson and Yankuba Minteh for roughly £60million in profit, without which the club would have breached financial rules in 2023-24. The club's position is rather less squeezed this summer; indeed, coach Eddie Howe has already stated '(PSR) issues aren't there for the coming window'. That's certainly true looking ahead to next season, when 2022-23's £71.8million pre-tax loss will drop out of Newcastle's PSR calculation. Up to the end of this month, that sum remains in there, alongside the £11.1m lost the previous season. We estimate Newcastle can lose up to £83m in 2024-25 and remain compliant. Before player sales, Newcastle have lost just shy of £70million in each of the prior two seasons, so doing that again in the latest one would run them pretty close to their limit again. Continued commercial income improvements will help, though a curious potential issue is one they'll benefit from next year: Champions League qualification means booming revenue in 2025-26, but staff bonuses likely crystallise in 2024-25. Even so, we expect Newcastle should indeed be OK at the end of June. The sales of Miguel Almiron and Lloyd Kelly to suitors abroad should bring the bottom line below £83million. Had Newcastle been subject to UEFA's lower loss limits it would have been a tighter squeeze — not least because Europe's governing body requires adjustments to the profits recognised on the 2023-24 sales of Anderson and Allan Saint-Maximin — but that PSR regime won't be a consideration until next season. Forest's PSR troubles were played out rather publicly in 2023-24, as the club copped a four-point deduction for overspending following their 2022 promotion. In the end, it made no difference to their league position that year, but some of the signings which contributed to that punishment have repaid the hassle to Forest several times over — their 10-spot jump up to finish seventh last season has, by our reckoning, generated an extra £34.2million in Premier League prize money. Forest actually booked a £10.1million pre-tax profit last season, the byproduct of recording over £100m in profit on player sales. That swung a chunky £75.3m operating loss into the black, though with little in the way of big departures in 2024-25 we can expect them to fall back into loss-making territory. Still, the significant improvement in domestic prize money should ensure they fall a decent way short of the £85million we project they could lose for the season without breaching PSR. Sunderland spending the past eight years out of the Premier League means they're the only club in the 2025-26 competition who won't have the opportunity to benefit from at least one PSR year with an upper loss limit of £35million; instead, each of the three years within their PSR calculation are capped at an upper limit of £13m, or £39m in total. In fact, Sunderland's PSR limit is even lower than that, as they've received no equity from ownership in recent years. To that end, their limit across the 2022-25 cycle is just £15million. For many Championship clubs that would be troublesome, but Sunderland have managed to get out of the second tier within three seasons of their 2022 promotion back to it — so before losses racked up too heavily. The club's pre-tax loss across 2022-23 and 2023-24 was a combined £17.6million and after even some pretty stingy deductions — the club operate a Category 1 academy, and we've likely underestimated the cost of doing so — we reckon Sunderland's PSR result over those seasons was actually £5m in the black. For the season just ended, we estimate Sunderland could lose up to £33million and remain PSR compliant. They will, therefore, be fine. They sold Jack Clarke for a sizeable profit last summer and then their play-off final hero Tommy Watson for a further £10million in a deal announced in April, and had generally been at the low end of Championship operating losses in recent years. Promotion bonuses would worsen the bottom line, but, as detailed above, Sunderland won't need to include those in their 2024-25 PSR submissions to the EFL. At first glance, Tottenham might appear ripe for PSR trouble. Once routinely profitable, they've booked five consecutive pre-tax losses — £120.7m in the previous two years which will therefore be included in their 2024-25 PSR calculation. Yet all of those worries are swept away in an instant when we consider that, in those same two seasons, Spurs incurred £141.6m in depreciation and non-player amortisation costs, principally on their state-of-the-art new stadium. Removing those costs puts them into the black from a PSR perspective, even before any further deductions. Once those are included, and we again account for the near-£70million annual depreciation cost, we estimate Tottenham could lose over £250m in 2024-25, probably around £277m, and still remain PSR-compliant. Even as their Premier League prize money has tumbled by virtue of a 17th-place finish in the 20-team division, the loss will be nowhere near that sort of figure. Spurs' bigger issue this summer was finding the actual cash to spend, though qualification for the 2025-26 Champions League as winners of the Europa League has eased some of those worries. West Ham generated an impressive £57.2million pre-tax profit in 2023-24, driven by the near-£100m profit recognised on the sale of Declan Rice to Arsenal in the early stages of that financial year. Their two-year pre-tax result leading into last season was therefore profitable, to the tune of £38.9m. West Ham's allowable PSR loss dwindled over the intervening months, as their last equity injection came during 2021-22, a period which drops off this next three-year calculation. That means they can only lose up to £15million in the three seasons spanning 2022-25, once allowable costs are removed. Even so, they are in little danger — and, with their accounting year-end falling on May 31, their lack of activity recently is reflective of as much. We estimate West Ham could have lost £95m in 2024-25 and remained PSR-compliant. In February, Wolves took the step of shifting their accounting year-end date from May 31 to June 30. That's a move which previously might have been seen as a club bringing their accounting dates into line with peers; now, rightly or wrongly, it comes with the added connotation of being seen as required in order to ensure a PSR breach is avoided. Wolves lost £81.5million across 2022-23 and 2023-24 and, while the latter figures were improved (the loss reduced from £67.2m to £14.3m) they still carried an operating loss, before player sales, of £73.3m. They also don't appear to have full use of the maximum £105m three-year loss limit. The club's only known equity injection across this and the previous two seasons was a £79.7m capital contribution from owner Fosun in 2023-24 — which would mean their maximum PSR loss is pegged at £94.7m. The club required the sale of Ruben Neves this month two years ago to ease PSR concerns then, but the recent departure of Matheus Cunha doesn't look to have been a regulatory necessity. We estimate Wolves could lose £56million in 2024-25 and stay within Premier League rules. Set against £70million-plus operating losses, that would be problematic, but the club banked £65.3m in player profits last summer, primarily on the sales of Maximilian Kilman and Pedro Neto. Cunha's departure tips that figure over the £100m mark, and there's little need for them to look to sell anyone else this month. (Top photos: Getty Images)
