TechFinancials Reports Sharp Revenues and Profits Rise

The trading technology provider is reporting an expected increase in full year profits

One of the few publicly listed trading technology providers for retail brokers of binary options, TechFinancials (LON:TECH) reported on the outcome for the full year 2016. The company’s revenues increased by 57 percent to $21.3 million, while operating profits rose to $5 million. For 2015, the firm registered a loss of $0.1 million.

Looking at the company’s key performance indicators, revenues from software licensing increased 22 percent to $20.4 million, while trading platform revenues rose 117 percent to $10.9 million.

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DragonFinancials Joint Venture

The DragonFinancials brand has been a major driver for TechFinancials which owns a 51 percent stake in the joint venture. For the full year 2016, revenues amount to $9.3 million. Net profits from the operation are reported at $5.6 million.

Last month, the company reported that it received a total of $3 million final divine from its Asia-focused joint venture.

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Challenging Times Ahead

Investors shrugged off the firm’s positive financials for 2016, focusing instead ahead towards the ways in which the firm will handle the loss of its largest customer, 24option. Gross margins of the company increased materially last year to 78 percent from 71 percent during 2015.

Commenting on the results, the CFO of TechFinancials, Asaf Lahav said: “The Group enjoyed a good year in which we have seen profitability restored as a result of the decisions we took as a Board to diversify our product offering and focus on high growth markets such as Asia.”

“Going forward we expect 2017 will be challenging due to the loss of our largest customer and the uncertain and tightening regulatory environment particularly in Europe. We anticipate these regulatory changes will have an impact on the B2B performance for the rest of 2017, both on its revenues and on earnings,” Lagav elaborates.

The company’s main focus for the current year will be to mitigate the loss of its largest client and adapting its offering to the increasingly strict regulatory requirements around Europe. TechFinancials is also preparing to diversify its product offering with the introduction of Forex and CFDs trading. The company’s geographical focus is shifting to the vast Asian market.

“We do feel that ultimately the regulatory changes will strengthen the industry and that there will be clarity by the end of 2017, and once that occurs, with a strong balance sheet, we will be well positioned to serve the market from 2018 onwards,” Lahav concludes.

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