FCA-regulated brokerage GKFX, operating with rebranded trade name GKPro, has published its 2019 yearly financial, the first time since it made major strategic changes in its business verticals.
The UK broker migrated its retail clients to a Malta-based affiliate in mid-2019, leaving only the professional and wholesale clients for the British unit.
This move affected its overall revenue as the figure for the entire year came in at £3.6 million, down from the previous year’s £8.8 million. That was an annual revenue decline of 144 percent.
The broker further highlighted that despite the change in its client base, the Group’s principal activity remained unchanged. “During the first half of the year, the retail trade was transferred to AKFX Activity Kapital who is a related party by virtue of common ownership,” GKFX noted.
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Despite the revenue slide, the cost of sales for the year declined significantly, resulting in a gross profit of £2.2 million from the trading business. However, factoring in the massive administrative expenses, the broker turned a pre-tax loss of £8.9 million, down from the previous year’s £9.58 million loss.
The London-based broker detailed that its revenue is generated predominantly from transactional spreads and execution activities.
“The level of revenues is influenced by the number of clients activity trading and executing flow and the amount of trading each client transacts,” GKFX explained. “Revenues reduced as the retail business was curtailed, and expense decreased primarily as lower staffing levels were required to support the much smaller ongoing client base.”
Apart from the major restructure in the operations, the broker closed down its MiFID branches in Spain and Germany last year, and its representative office in Dubai also ceased regulatory activities.