LONDON (Alliance News) - London Capital Group Holdings PLC, the AIM-listed spread betting and contracts-for-difference provider, on Friday said losses widened in 2015, with trading revenue taking a hit as the company limited promotional activity to focus on restructuring.
Its pretax loss widened to GBP14.5 million in 2015, London Capital said in a statement, from GBP7.9 million in 2014, as revenue from UK financial spread betting and CFDs fell by 21% to GBP15.3 million and new client acquisitions decreased 37% to 3,539. Total revenue from continuing operations decreased 32% to GBP15.5 million, down from a restated GBP22.7 million.
Adjusted administrative expenses, a figure excluding several "exceptional items", rose by GBP8.6 million to GBP24.1 million, with the increase partly due to the cost of attracting new staff. Other costs of GBP3.2 million were up from GBP1.9 million, with the increase relating to client bad debts incurred in part due to the Swiss National Bank's surprise move to end its policy of pegging the franc to the euro in January 2015.
London Capital's restructuring included an overhaul of the technology used to support its operations, the development of a new trading platform, LCG Trader, new 'LCG' branding and a recruitment drive. In addition, the company moved to new offices in Knightsbridge in London in November 2015.
Chairman Charles Poncet said London Capital could benefit from any volatility in financial markets arising from the UK's June 23 referendum on whether to remain in the European Union or leave. Volatility tends to benefit companies such as London Capital, as price movements in markets present trading opportunities for its clients.
Poncet said the company will look to increase its regulatory capital levels in the short term. In January, London Capital had said it was looking at making such a move to support growth. The company's accounts showed a capital resources surplus of GBP8.2 million at the end of 2015, down from GBP22.7 million at the end of 2014.
Chief Executive Officer Charles-Henri Sabet said London Capital has been successful in the integration of its new technology, and that the process of migrating its client base should be completed by the end of May.
"This 'brand new' LCG is centred on a new cutting-edge online trading platform and an enhanced marketing programme. We are already beginning to see the benefits and have made a strong start to 2016. I believe that all the elements are now in place for the group to return to sustained growth," Sabet said in a statement.
Shares in London Capital were down 9.6% at 6.67 pence Friday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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