Valutrades Limited, a UK-based online foreign exchange (FX) and contracts-for-difference (CFD) broker, posted a smaller annual loss for 2024 despite facing headwinds from reduced client activity and declining revenue.

The London-based company reported a net loss of £2.59 million for the year ended December 31, 2024, compared to a loss of £3.82 million in 2023. While revenue increased 27% to £1.94 million from £1.52 million the previous year, the company attributed its improved bottom line primarily to aggressive cost-cutting measures.

Valutrades’ Cost Reduction Drives Improvement

Valutrades slashed its administrative expenses to £2.48 million from £3.48 million in 2023, helping offset what management described as a “challenging year” marked by fewer clients and reduced trading activity. The company cut its workforce from 19 employees in 2023 to 11 in 2024, with staff costs dropping to £600,000 from over £1 million the previous year.

“2024 was a challenging year for Valutrades which saw a reduction in overall client numbers and activity,” the company stated in its annual report. “This was however balanced by some significant milestones including launching our first proprietary mobile app, launching a new website and client area, completing a rebrand and significantly reducing operating costs.”

The broker managed to turn its gross profit positive, reporting £125,241 compared to a gross loss of £387,418 in 2023. However, retail client funds held by the company declined to £1.78 million from nearly £2 million the previous year.

Capital Injection Supports Operations

Shareholders injected £2.6 million in new capital during 2024, bringing total share capital to £10.82 million. The funding came as the company's cash reserves dropped to £837,471 from £1.78 million at the end of 2023.

Management, however, expressed cautious optimism about the business outlook, citing the cyclical nature of the markets it serves. The company expects tough years to be balanced with easier years over the long term while the short to medium term focus remains on growth above profitability.”

The broker launched several initiatives in 2024 aimed at differentiating itself from competitors, including its first mobile app and website redesign. Directors indicated plans to continue investing in technology, staff, and business relationships to enhance expected profitability.

Valutrades has accumulated tax losses of nearly £8 million that can be offset against future profits, though the company has not recognized these as an asset on its balance sheet.

Industry Struggles in 2024

The challenges facing Valutrades reflect broader market conditions affecting UK-based retail trading platforms. FXCM UK, operating as Stratos Markets Limited, also faced similar headwinds in 2024, with retail trading volumes dropping 19% to $243 billion despite managing to turn around its revenue picture with a small positive turnover of $103,606 compared to a $1.68 million loss the previous year.

Like Valutrades, FXCM UK cited reduced market volatility as a key challenge, with the VIX average dropping to 15.5 in 2024 from 16.85 in 2023. Lower volatility typically translates to reduced trading activity and less revenue for CFD platforms.