Gain Capital just published its full 2011 results including Q4 2011 and it’s no surprise that it presented a slowdown in results. Q4 2011 was a very slow quarter for all market participants – retail and institutional and Gain wasn’t an exception. However Gain still managed to show some positive numbers including an increase in overall trading volume. Fourth quarter however ended up in a loss of $3.3 million and retail forex volume dropped about 20%. Institutional forex volume was the only real highlight and grew 370% in Q4 2011.
Confluence of market factors impacted quarterly results; key operating metrics demonstrate progress made in 2011
For full-year 2011: Total retail trading volume increased 18.8% to $1.6 trillion; Client assets increased 20.9% to $310.4 million; EBITDA margin* of 20.1%; net income margin of 8.7%
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GAIN Capital Holdings, Inc. (“GAIN”) (NYSE: GCAP), a leading global provider of online trading services, announced its results for the fourth quarter and twelve months ended December 31, 2011.
“Fourth quarter market conditions reflected an unusual confluence of factors that caused us to report a loss for the period. There was a drop-off in market volatility, spikes of market uncertainty, and very tight trading ranges in major currencies such as the Euro and Yen. These dynamics, which contributed to a 18.2% sequential decrease in retail trading volumes, altered the composition of our order flow and impacted our ability to optimize spread capture. Throughout the quarter, we nonetheless continued to invest in being the best service provider in our asset class. We are confident that our ongoing focus on customers will enable us to continue to drive growth of a loyal client base going forward,” said Glenn Stevens, Chief Executive Officer.
“Despite these exceptional factors, we achieved a 20.1% EBITDA margin for the full year, and the underlying business remained strong. Retail trading volume was up 18.8% for the full-year, while our institutional business continued to gain momentum and delivered 298.5% trading volume growth in 2011. GAIN GTX is now at an inflection point, and we expect it to become a meaningful contributor in 2012. We continue to pursue several opportunities to further expand GAIN’s geographic reach and product offerings in order to drive long-term growth,” Mr. Stevens concluded.
Full-Year Metrics (Comparisons below are referenced to FY 2010)
- Net revenue of $181.5 million, compared to $189.1 million
- EBITDA* of $36.6 million, compared to adjusted EBITDA* of $58.5 million; EBITDA margin* of 20.1%
- Net income of $15.7 million, compared to $37.8 million; net income margin of 8.7%
- Adjusted net income* of $21.7 million, compared to $33.9 million
- Diluted EPS of $0.40, compared to $1.00
- Adjusted diluted EPS* of $0.56, compared to $0.90
- Total retail trading volume up 18.8% to $1.6 trillion
- Total institutional trading volume up 298.5% to $953.6 billion
- Client assets up by 20.9% to $310.4 million as of December 31, 2011
Fourth Quarter Metrics (Comparisons below are referenced to Q4 2010)
- Net revenue of $31.6 million, compared to $40.9 million
- EBITDA* of $(3.1) million, compared to adjusted EBITDA* of $7.2 million
- Net income/(loss) of $(3.3) million, compared to $56.8 million
- Adjusted net income/(loss)* of $(1.6) million, compared to $4.0 million
- Diluted EPS of $(0.10), compared to $1.44
- Adjusted diluted EPS* of $(0.05), compared to $0.10
- Total retail trading volume consistent at $366.4 billion
- Total institutional trading volume up 367.9% to $486.2 billion