LCGH Reports 2013 Full Year Results: Full Year Loss Widens to $8 Million

The company’s CFD business is consolidating, while institutional FX volumes drop sharply lower as competition in the space has briskly

LCG_logoLondon Capital Group Holdings Plc (LCGH), the company behind some of the big spread betting brands in the UK such as Capital Spreads, Capital CFDs and LCG MT has issued its audited results for the year ending on December 31st, 2013. Revenues have stagnated with the spread betting and CFD division marking a relatively flat year coming out at $33.3 million (£20.8 million) which is barely 2% higher than 2012, while revenue from continuing operations has decreased by 5% to $42 million (£25.2 million) as the company’s institutional trading division has marked a substantial decline in volumes throughout 2013.

The bottom line result is a loss of $8 million (£4.8 million) which is more than four times higher than last year’s $1.7 million (£1.1 million). After plunging more than 6% at the open, share prices of the company are currently trading only 3% lower as investors digest the numbers. According to the report, spread betting and CFD activities accounted for $16.3 million in profits (£9.8 million),which is about 25% higher than a year ago.

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Average trades per day have decreased by 12% to 22,008 in 2013, while new client acquisitions have dwindled to 6,431, which is lower by about 36% to last year’s figures. The apparent drop in new clients can well be tied to Plus500’s aggressive marketing model that has been attracting a lot of new spread betting business throughout 2013, squeezing competitors out of the UK market.

Institutional trading volumes at the company have not fared any better as the company reports a drop totalling to $242 billion which is lower by 37% when compared to 2012. The company has disposed of its losing ventures in Australia and Gibraltar and focused on its domestic market strength instead, and has successfully settled with Life Settlement Consulting Limited (Integrity).

Full year results were addressed by the company’s CEO, Kevin Ashby who stated, “Having addressed and resolved a number of material internal and external issues, the Group emerged from 2013 in a much stronger structural and operational position than could have been predicted at the start of the year, and the general confidence of the business has materially improved. We have a clear strategy to reposition LCG and I am confident that we will make further progress with the turnaround in 2014.”

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