LCG Holdings H1 Trading Update: Revenue Lower by 40% YoY and 4% QoQ

Publicly listed online spread betting, CFD and institutional FX firm, London Capital Group (LCG) Holdings plc has issued a trading update for the first half of the year, announcing that revenues from continuing operations have totalled £9.2 million ($15.7 million) throughout the period. The number is lower by a touch below 40% when compared to last year and just about 4% when compared to the data released in the Q1 trading update in the beginning of May this year.

Considering the much tougher market conditions which have ensued during the second quarter, with FX Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term dropping to all time lows and volatility indices for stocks marking multi-year lows, these revenue figures do not represent a big surprise. According to data released in the trading update, the share of revenues from spread betting and CFD trading amounted to £7.6 million ($13 million), which is lower by almost 42% compared to the first half of 2013, while institutional FX totalled £1.6 million ($2.7 million), or 23% lower when compared to last year.

LCG expects to report an adjusted loss before tax for the first six months till the end of June 2014 of about £0.9m, which is compared to £2.8m of profit from continuing operations for the same period last year. The loss before tax is expected to be in the region of £0.4m after an adjustment of £0.5 million related to a credit line relating to the Financial Ombudsman Service (FOS) which is no longer required.

The Group's capital base remains solid, with cash resources and amounts due from brokers at the company remaining solid at £17.7 million ($30.3 million) before the financing offer for up to £17.5 million ($30 million) made by GLIO Holdings, headed by Charles-Henry Sabet was accepted by the company's board of directors.

LCG's CEO Kevin Ashby, stated," The results for the half year reflect the Company's current concentration on the competitive UK market and a period of low market volatility. During the period, the company completed the deployment of its new Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term and is undertaking a restructuring programme to align the cost base with the current level of trading."

He reiterated that the company is "looking forward to the active involvement of Charles-Henri Sabet and deploying the substantial additional resources, to build out the Company's capabilities and product offerings, ‎strengthen our brand, develop a broader product and services offering, and attract a more diversified client base, both within the UK market and internationally."

The company has announced that it will publish interim results for its operations on the 27th of August, 2014. London Capital Group's shares are currently trading at 26.2p on the London Stock Exchange.