Multi-asset brokerage ActivTrades has reported its full-year financials for 2017, which showed a healthy uptick in revenues although its net profit dropped relative to last year, according to a filing with the UK Companies House.
The decline in the bottom line reflects an increase in R&D spending. Between 2017 and 2018, the company considerably increased its development efforts, in order to totally revamp its trading platform, ActivTrader. Indeed, the new version of ActivTrader will be released this summer for web, iOS and Android.
The company has also invested heavily in upgrading its IT infrastructure in order to improve internal security and its clients’ safety. Moreover, for the past two years, ActivTrades has been working on a new lending offering, focussed on bridging loans for UK-based investors, which was successfully launched in April 2018. The move into this new arena involved additional investment in 2017.
One Off Brexit Impact
The 2016 Brexit referendum caused a plunge in sterling which reduced ActivTrades’ cost base. This decreased its admin expenses by a one-off gain of £4.8million in 2016. The lack of a similar event in 2017 made the admin costs much higher compared with 2016.
The latest company report casts light on ActivTrades’ overall metrics and volumes, both of which appeared to have been helped by higher market volatility in the FX market. As such, ActivTrades disclosed a 2017 FX revenue figure of $55 million (£40.45 million), up 15 percent YoY from $47.3 million (£34.9 million) in the year prior.
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Total administrative expenses at the broker, climbed to $30.8 million (£22.7 million), up 47 percent over a yearly basis when compared with just $20.9 million (£15.4 million) in 2016.
Trading Volumes Rise 20%
A large component of this increase in expenses was pegged to ActivTrades’ rising workforce in 2017, including marketing costs, IT, and investments. ActivTrades turned a profit of $15.7 million (£11.6 million) after tax. The bottom line figure was down 9.3 percent year-over-year from $17.3 million (£12.8 million) in the prior year.
Another milestone for the broker was an increase in trading volumes which rose 20 percent year-over-year. ActivTrades identified over 70,450 potential new clients in 2017, of which 7,330 became customers with funded accounts.
Finally, the manifest showed that ActivTrades witnessed a slight increase in deposits last year, coming in at $62 million (£45.7 million) during 2017, compared to £45 million ($58 million) in 2016.
The FCA-regulated broker operates three branches of the business outside the UK, in Italy, Bulgaria, and in Dubai. The branch in Sofia, established in 2012, handles all the technical aspects of ActivTrades business, as well as the responsibility for risk control, and some client services.
ActivTrades has recently embarked on a number of initiatives for its clients. Finance Magnates reported on ActivTrades back in December when the FCA-regulated firm launched a list of new contracts, including Bitcoin, Litecoin, and Ethereum. The company is offering the new crypto CFDs via its proprietary trading platform ActivTrader, MetaTrader 4 and 5 on desktop, tablet, and mobile.