LCG’s H1 Financials, Client Acquisition See Strong Growth

The first six months of the fiscal year built on previous momentum and the group's new trading platform.

London Capital Group (LON:LCG) has reported its interim results for the first six months of the year ending June 30, 2017. The group’s momentum has continued into H1 2017, with revenues and client volumes both trending upward.

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The filing follows on the heels of a recent FY 2016 report from LCG that saw strong revenues and client acquisitions. Its financial performance corroborated a trend that had already been in place for the duration of H1 2016 – LCG’s rebranding efforts, i.e. a website retooling and launch of a new trading platform, paid off during this period and for the entirety of the fiscal year, pushing revenues to new highs.

Charles-Henri Sabet, Group Chief Executive, commented on the fiscal performance: “The results are extremely encouraging and continue to demonstrate how LCG’s performance is improving following its investment in technology, product offering and branding. This improvement has been achieved against the background of challenging trading conditions in the first half of 2017.”

Charles-Henri Sabet

Fast-forwarding to the 2017, H1 appears to have by and large charted a similar course with LCG’s revenues swelling to £12.0 million ($16.1 million) during the six first months of the year. This corresponded to a growth of 7.1 percent year-over-year, relative to just £11.2 million ($15.0 million) in H1 2016.

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“During this period, the Group has seen strong revenue growth primarily due to increased client acquisition and participation as well as revenue capture compared to prior periods. This has enabled LCG to grow despite the lack of volatility in the market resulting in a benign trading environment,” explained Mr. Sabet.

LCG’s gross profit was also pointed higher in H1, disclosing a figure of £10.9 million ($14.6 million), compared to just £9.2 million ($12.3 million) in the first six months of 2016. This was good for a gain of 18.4 percent on a yearly basis, one of its strongest gains across its financials over this interval.

Looking at LCG’s adjusted EBITDA, the figure was still in negative territory in H1 2017, though managed to shed a substantial portion of these losses. More specifically, a reading of -£961,000 (-$1.28 million) was reported during the first six months of the year, reflecting a decline off of £2.1 million (-$2.9 million), or -55.2% year-over-year.

Moving to LCG’s operational segment, its client volumes were the obvious beneficiary of previous branding efforts and its new platform. As such, the group saw its volumes jump to £127.0 billion ($169.8 billion) in H1 2017, up 24.5 percent from £102.0 billion ($136.4 billion) in H2 2017.

Client net deposits at LCG were also on the rise, with its latest figures constituting a figure of £2.4 million ($3.2 million) in the first six months of 2017, surging 71.0 percent from £1.4 million ($1.9 million) in H2 2016. This segment in particular was boosted by LCG’s new trading platform and improved product offering.

“The outlook for the industry continues to remain uncertain given the changing regulatory landscape. This is anticipated to have an impact on the industry and affect the services that can be offered to clients, particularly with regard to the levels of leverage that can be offered,” noted Mr. Sabet.

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