Equiti Capital UK Limited, a London-based brokerage specializing in institutional CFD trading, reported a 52% decline in annual profit as rising operational costs offset steady revenue growth.
The company posted a profit of $530,000 for the previous year, down from $1.1 million in 2023. However, net trading revenue increased 4% to $32.2 million, driven primarily by higher trading volumes and enhanced product offerings.
Equiti Capital UK Limited’s Operating Expenses Jump 10%
Operating costs surged to $31.8 million from $29.0 million in 2023, representing a 10% increase that significantly outpaced revenue growth. The company attributed much of the expense increase to investments in quantitative analysis tools and enhanced compliance systems required for its regulated operations.
"Investment in the Quant team has resulted in the creation of a suite of new tools and reports," the subsidiary of Equiti Group stated in its strategic report. "These have allowed the Company to better analyze its clients and their trade flow to enable more tailored pricing and liquidity , resulting in increased revenue".
Legal and professional expenses more than quadrupled to $4.1 million from $954,490 in the previous year, while intercompany expenses rose to $6.9 million from $4.9 million.
Metric | 2024 | 2023 | Change |
Net Trading Revenue | $32.2 million | $30.9 million | +4% |
Operating Costs | $31.8 million | $29.0 million | +10% |
Profit After Tax | $530,342 | $1.1 million | -52% |
Legal & Professional Expenses | $4.1 million | $954,490 | +326% |
Intercompany Expenses | $6.9 million | $4.9 million | +42% |
Strong Balance Sheet Position Maintained
Despite the profit decline, Equiti Capital UK maintained a solid financial position with net assets of $39.4 million compared to $38.9 million in 2023. The company's balance sheet showed total assets of $151.1 million, down from $171.6 million the previous year.
Cash and cash equivalents decreased to $80.6 million from $100.9 million, while derivative financial assets increased substantially to $45.5 million from $30.8 million.
Following the year-end, Equiti Capital UK declared and paid a cash dividend of $7 million to its shareholders, demonstrating confidence in its financial stability despite the earnings decline.
The company operates as a wholly-owned subsidiary of Equiti Group Limited and provides execution-only brokerage services for professional and institutional customers trading CFDs in spot forex , metals, indices, and commodities.
Regulatory Environment Drives Costs
The Financial Conduct Authority-regulated firm highlighted significant investments in compliance infrastructure throughout 2024. Regulatory fees remained elevated at $1.7 million compared to $2.0 million in the previous year.
The company emphasized its focus on "delivering fair customer outcomes, to professional and eligible counterparty classified customers, by ensuring market leading execution and bespoke liquidity solutions".
Recently, Equiti Group promoted three executives to senior leadership roles as the multi-asset broker seeks to strengthen its global operations and technology capabilities. The firm named Sartaj Singh as Chief Technology Officer (CTO) after more than a year leading its technology division. Singh, who joined Equiti in December 2023 as global head of technology, oversaw what the company described as a significant overhaul of its trading platforms and infrastructure.
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