As London Capital Group continues to tread a difficult path, the company’s board of directors today announced that the firm has agreed to sell ProSpreads Limited.
A subsidiary of London Capital Group with its operations based in Gibraltar, ProSpreads will be purchased by Apostar Holdings Limited, a compatriot privately owned company which also has a registered office in London.
A Year of Trepidation
2013 has not been an easy year for London Capital Group, the most recent event of significance having been the company’s white label partner Tradefair having announced just three days ago that it will terminate its agreement with the broker with effect from December 12, this year in order to operate exclusively with GFT.
During the course of the year, the broker has concentrated on efforts to stabilize its operations, following the reporting of a loss during the second half of 2012, resulting in share prices dropping, followed by an increase in the early stages of this year, which attracted the attention of a series of brokers who showed interest in acquiring the company.
Forex Trading Disruptor Sees Growth Thanks to Offshore Regulated StatusGo to article >>
Subsequent to negotiations with such companies, all interest was dropped, and the company remains independent to this day, but, is showing signs of emerging from its fiscal wilderness with a 59% increase in adjusted profit before tax in the first half of this year over last year’s results.
ProSpreads Offloaded For £1.5 Million
London Capital Group has agreed to sell spread betting subsidiary ProSpreads for a premium above the net asset value at the date of completion, and expects to receive net cash of £1.5 million following adjustments for working capital and the settlement of inter group balances.
Net profit on disposal is expected to be in the region of £0.1 million. The proceeds of the disposal will be used for working capital in the UK businesses. The disposal will be undertaken by way of a transfer of the securities held in ProSpreads.
Whilst ProSpreads has experienced its fair share of negative results last year, having arrived at the end of last year with a loss of £0.6 million for the 12 months to 31 December 2012, on revenue of £1.1 million, the company brought itself out of the red this year with a profit of £0.1m in the six months to 30 June 2013, on revenue of £0.7 million.
A frugal move by London Capital Group as it treads an economical path toward regaining its financial stability, a point of interest will be whether spread betting companies such as ProSpreads are able to continue to specialize in this predominantly British niche, or if expansion to the mainstream is the future.