LCG UK Narrows Losses in 2021 despite 86% Revenue Decline

by Arnab Shome
  • The trading volume on the platform declined by 58 percent.
  • It ended the year with 4,461 active clients.
london

London Capital Group Limited, owned by Charles Henri Sabet who controlled Swiss firm Flowbank, ended the financial year 2021 ended on 31 December with revenue of more than £1.58 million, which is 86 percent lower than the previous year, the latest Companies House filing revealed.

LCG Narrows Losses Significantly

Operating under the trade name LCG, the company generated £1.09 million in gross profits for the year, which declined by 89 percent. However, it narrowed the pre-tax losses to £1.74 million compared to the previous year's £2.13 percent, which is an improvement of 18 percent.

Following Brexit , LCG primarily operates with its Financial Conduct Authority (FCA ) license. Now, the company focuses only on its UK client base after losing passporting rights for operations in the European Union. However, Its sister entity LCG Capital Markets Limited, Bahamas, operates globally with authorization from the offshore regulator.

A Decline in Trading Demand

The company's revenue took a dent as the trading volume for the year decreased by 58 percent to £68 billion. Moreover, the number of monthly active clients declined by 27 percent to 4,461. The client balance on the platform dropped by 9 percent to £14.7 million.

On the positive side, it managed to reduce administrative costs by 54 percent to £5.6 million.

LCG generates revenue from the dealing spread, which is the difference between the contracts' buy and sell price for differences (CFDs) and spread betting products, commission income, and exchange gains and interests.

"A significant structural change to the company, the ongoing impact of Brexit, regulatory changes to the CFD industry, and market volatility have all impacted business performance for the twelve months ended 31 December 2021. Overall, the company has experienced a material fall in revenues, but reduced costs have resulted in a smaller operating loss for the year versus the year prior," the filing stated.

Previously, LCG was a part of the London Capital Group Holdings, which ran into trouble after delisting from the London Stock Exchange and NEX Exchange in 2018. The same year, Charles Henri Sabet, then heading as the CEO, bought LCG, separating it from the troubled London Capital Group Holdings, which went into liquidation.

Sabet made some structural changes in the ownership of LCG after he launched Switzerland-based FlowBank in 2020.

"LCG's transition to a new business arrangement with its parent company (FlowBank SA) required a major adjustment to day-to-day operations, and management expects to continue to devote significant time into making it a success. The structural changes have reduced costs but resulted in an expected reduction in average monthly trading volume and revenues," the filing added.

London Capital Group Limited, owned by Charles Henri Sabet who controlled Swiss firm Flowbank, ended the financial year 2021 ended on 31 December with revenue of more than £1.58 million, which is 86 percent lower than the previous year, the latest Companies House filing revealed.

LCG Narrows Losses Significantly

Operating under the trade name LCG, the company generated £1.09 million in gross profits for the year, which declined by 89 percent. However, it narrowed the pre-tax losses to £1.74 million compared to the previous year's £2.13 percent, which is an improvement of 18 percent.

Following Brexit , LCG primarily operates with its Financial Conduct Authority (FCA ) license. Now, the company focuses only on its UK client base after losing passporting rights for operations in the European Union. However, Its sister entity LCG Capital Markets Limited, Bahamas, operates globally with authorization from the offshore regulator.

A Decline in Trading Demand

The company's revenue took a dent as the trading volume for the year decreased by 58 percent to £68 billion. Moreover, the number of monthly active clients declined by 27 percent to 4,461. The client balance on the platform dropped by 9 percent to £14.7 million.

On the positive side, it managed to reduce administrative costs by 54 percent to £5.6 million.

LCG generates revenue from the dealing spread, which is the difference between the contracts' buy and sell price for differences (CFDs) and spread betting products, commission income, and exchange gains and interests.

"A significant structural change to the company, the ongoing impact of Brexit, regulatory changes to the CFD industry, and market volatility have all impacted business performance for the twelve months ended 31 December 2021. Overall, the company has experienced a material fall in revenues, but reduced costs have resulted in a smaller operating loss for the year versus the year prior," the filing stated.

Previously, LCG was a part of the London Capital Group Holdings, which ran into trouble after delisting from the London Stock Exchange and NEX Exchange in 2018. The same year, Charles Henri Sabet, then heading as the CEO, bought LCG, separating it from the troubled London Capital Group Holdings, which went into liquidation.

Sabet made some structural changes in the ownership of LCG after he launched Switzerland-based FlowBank in 2020.

"LCG's transition to a new business arrangement with its parent company (FlowBank SA) required a major adjustment to day-to-day operations, and management expects to continue to devote significant time into making it a success. The structural changes have reduced costs but resulted in an expected reduction in average monthly trading volume and revenues," the filing added.

About the Author: Arnab Shome
Arnab Shome
  • 6306 Articles
  • 80 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6306 Articles
  • 80 Followers

More from the Author

Retail FX

!"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|} !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}