LCG looks to raise £8m to secure future
The London Capital Group is looking to raise £8m through the issue of new shares, in order to continue trading at current levels without disruption.
The London Capital Group (LCG) is looking to raise £8m through the issue of new shares in order to ensure it continues trading at current levels without disruption, its senior management said this morning.
The announcement follows the revised assessment from the Financial Ombudsman Service (FOS) stating the group must pay £3.2m following complaints over an alleged failed trust fund dating back to 2009, an assessment which chairman Richard Davey said “LCG intends to challenge robustly.”
In a statement made following the release of LCG’s results for the year ended 31 December 2010, Davey added that the provision of £3.2m had made it “inappropriate to pay a final dividend.”
The results, the release of which was delayed from 22 February, are otherwise headlined by a 25% year-on-year rise in revenue, however the FOS assessment contributed to a pre-tax loss of £66,000, compared to a £5.8m pre-tax profit in 2009.
The “challenging” year prompted chief executive Simon Denham (pictured) to issue his first statement to shareholders since being named CEO last year, and he took the opportunity to respond to a decline in client acquisition not helped by Paddy Power ending its white-label agreement with the group.
“Client acquisition has been challenging for our own brands and our white label partners with numbers falling some 34% over the course of the year due in part to the late delivery of technology upgrades,” said Denham.
“Despite this, we achieved a record month in December for client acquisition, which is normally a difficult month to attract new customers.”
He added that the PaddyPowerTrader client base would be invited to migrate to LCG’s Capital Spreads brand name, while revealing that the group’s Gibraltar-based ProSpreads unit brought in its first white-label partners in the final quarter of last year.
The group said it remained optimistic for the rest of the year, and hopes to confirm the issue of new shares as early as 7 April when the proposal will be voted on by shareholders at a general meeting.