Strong spread betting performance boosts LCG revenues
Positive H2 results help operator increase annual revenues " profits hit by legal fees.
London Capital Group has reported a 13% increase in revenues in its full year figures for 2011 following record trade volumes in the six months ending 31 December.
Revenues increased to £39m, up from £34.5m in 2010, helping adjusted profit before tax rise to £7.1m, up 9% year-on-year. The improved performance was attributed in part to market volatility in the second half of last year, which saw average trades per day increase by 10.8%, average revenue per user (ARPU) rise 7% year-on-year and revenues for the six months up 52%.
Foreign exchange performance was particularly impressive with trade volumes, in dollars rather than pounds sterling, increasing 27% from US$429bn to $544bn, and divisional net profit up 14% to £2.4m.
This followed a difficult first half of 2011, with the LCG delaying the announcement of its full-year figures for 2010 following a ruling from the Financial Ombudsman Service which opened the possibility of the company being forced to pay a £7.7m fine for a failed fund. Legal fees related to the case and the cost of moving the company office hit the adjusted profit before tax, which would have been up 23% to £8m for the year.
LCG chief executive Simon Denham said he was pleased with the results, but warned that the continuing financial crisis could cause problems in the future: “Despite a difficult start to 2011 the group has delivered a strong set of results and made positive inroads operationally and financially.
“We are particularly delighted to have improved our scalability, competitive position and to have developed our international operations further. Whilst the uncertain economic outlook both in the Eurozone and UK presents a challenging backdrop we are confident in the robustness of our business model and our future growth plans,” Denham said.