LCG Spread Betting and CFDs Revenue down 7% YoY, Sabet Turned CEO

Alongside its final results statement released this morning, London Capital Group announced a change to the board of directors. Charles-Henri

LCGlogoLondon Capital Group (LCG) has just issued its final yearly results for the year ended December 31, 2014. The figures show a drop in performance for the broker but management seems determined to present restructuring as a success.

Alongside its final results statement released this morning, London Capital Group announced a change to the board of directors.

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LCG’s new management says it undertook a review of the group and all its business lines and operations, shortly after taking control at the end of the third quarter, “against a backdrop of challenging market conditions and a period of losses accumulated under the previous management’s chosen strategy.”

As part of a restructuring approximately 75% of the previous workforce has now departed.

To enable the group to achieve a return to growth later in the year, LCG has instigated several improvements – these include marketing an MetaTrader 4 offering, improving the overall client experience and installing a greater emphasis on client servicing.

LCG also says it is well underway with a major rebrand exercise, which will help to position the group as a leading provider of online trading services. In addition, they have “put in place the building blocks to take active advantage of opportunities globally,” which will complement core domestic business in the UK.

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Financial Highlights

  • Adjusted profit before tax from continuing operations of £1.1m (2013: £2.2m)
  • Statutory loss before tax from continuing operations of £7.9m (2013: £4.8m)
  • Statutory loss after tax from continuing and discontinued operations of £7.8m (2013: £3.7m)
  • Revenue from UK financial spread betting (“FSB”) and contracts for difference (“CFD”) down 7% to £19.4m (2013: £20.8m)
  • Revenue from continuing operations decreased 10% to £22.7m (2013: £25.2m)
  • Net cash and short-term receivables of £32.9m at year end (2013: £21.8m) including amounts due from brokers £6.1m (2013: £4.6K)

Operational Highlights

  • UK FSB  and CFD Performance

    •   Divisional revenue down 7% to £19.4m (2013: £20.8m); divisional  profit of £8.8m (2013: £9.8m)
    •  FSB average trades per day decreased 9% to 19,994 (2013: 22,008)
    •  New client acquisitions decreased 13% to 5,615 (2013: 6,431)
  • Institutional Foreign Exchange Performance

    •   Trade volumes decreased to $215bn (2013: $242bn)
    •   Divisional revenue of £3.3m (2013: £4.3m); divisional profit of £1.1m (2013: £1.3m)
Charles-Henri Sabet
Charles-Henri Sabet

Charles-Henri Sabet, Executive Chairman, said: “I am pleased to report that a strategy is now in place for the Group to return to growth at all levels of the business during the second half of 2015, while we anticipate that the restructuring process we began in 2014 will last until the end of 2016.”

“We shall continue to invest in the quality of our people, products and services, and with the strength of our balance sheet and management drive to execute on our strategic vision, we are confident in the prospects for a return to growth in order to deliver long-term sustainable returns to all our shareholders.”

Changes at the Top

The transformation of the company, which started following the arrival of new senior management in the second half of 2014, is now at an advanced stage and LCG says “a clear strategy for achieving sustainable growth is in place.” Having reached this stage of its development the company has decided it is now appropriate to have two individuals in the key roles of chairman and chief executive.

LCG today announces that Dr. Charles Poncet, non-executive director, has been appointed as non-executive chairman of the company and that Mr. Charles-Henri Sabet, currently executive chairman, will assume the role of group chief executive officer.

The company also announces that Nicholas Lee, non-executive director, has been appointed as senior independent non-executive director.

The changes take place with immediate effect.

The board’s priority, according to the statement, remains to continue to push ahead with the execution of its strategy for sustainable growth as the company moves to the next stage of its development, focusing on the delivery of its new products and offerings across its chosen markets together with an expansion into overseas territories.

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