UK-based Spreadex Limited has filed its annual report and financial statements for the year ended May 31, 2018. According to the report, the company saw strong growth in its key performance indicators of bet numbers, active clients and money held throughout the year.
As of the end of May this year, net assets for the spread betting company was £69.5 million. This was an increase of eight percent from the same period last year. The strong results follow a rather lackluster performance from the previous financial year.
Profit before and after taxation both saw double-digit growth from the year ending March 2017. Before taxation, profit for the year was £33.5 million, whereas the profit for the year after taxation was £27.3. This was an increase of 16 percent and 18 percent respectively.
According to the report, the profit was achieved in cash and allowed for dividend payments to the company’s shareholders. Turnover for the company was £58.9 million, an increase of almost 15 percent. Gross profit also saw a healthy increase of 14 percent, coming in at £54.3 million.
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Impact of upcoming EMSA regulation deadline
The broker pointed out the high-impact the European Securities and Markets Authority (ESMA) regulation, which becomes effective on August 1, 2018, had on its business. According to the report, the British spread betting company invested significant IT resources during the financial year to ensure it is compliant with the regulations.
As a result, the company has made two main changes to its business. The first change is that all retail clients now have a “no negative balance” guarantee. The second is implementing the leverage restrictions as determined by the regulator.
Because sports spread betting is outside of the updated MiFID II regulation, the business has had to separate its sports and financial products for retail clients. Although this was a large and complex task for the company, it managed to achieve it ahead of the August deadline, the report says.
Furthermore, the brokerage believes that even though there are regulatory uncertainties in the future, the results for 2018 signal the potential for further growth. To achieve this, the company will continue to rely on its IT and risk management systems, which are the fundamental reasons for the success of the business.