LONDON (Alliance News) - Trading house London Capital Group Holdings PLC saw its shares plunge in early trade on Thursday after it said its pretax loss ballooned and its revenue dropped heavily following a major restructuring which resulted in a loss of foreign exchange customers.
London Capital also suffered a weak performance in its UK financial spread betting and contracts for difference business.
The shares were down 17% in early trade on Wednesday to 15.00 pence, one of the worst performers in the AIM All-Share.
The company said its pretax loss for the six months to the end of June was GBP8.6 million, substantially wider than the GBP400,000 loss it made a year earlier, as restructuring costs exacerbated a plunge in its revenue in the half to GBP5.3 million from GBP9.2 million, which was not accompanied by a major cut in its cost of sales.
The group's spread betting and contracts for difference unit saw revenue drop 33% in the half, down to GBP5.1 million from GBP7.7 million, and it swung to a pretax loss of GBP1.1 million, having made a GBP1.9 million profit a year earlier. In addition to the tough trading in that unit, its foreign exchange trading arm, which was heavily restructured, saw a reduction in the number of clients on its books, causing its revenue to plunge.
"The business has been operating in challenging market conditions throughout the first half of the year, with relatively low levels of volatility across financial markets for much of the period," said Chief Executive Charles-Henri Sabet.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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