London Capital Group reports £8.6 million loss before tax 

LONDON CAPITAL GROUP HOLDINGS PLC has issued today an announcement to inform on its Interim Results for the Six Months Ended 30 June 2015.

Operating Summary

• Since the arrival of the new management team in October 2014 there has been a substantial restructuring of the entire business which has now been largely completed ahead of schedule and on budget
• Adjusted loss before tax** from continuing operations of £9.9 million (H1’14 loss: £0.9 million)
• Loss before tax from continuing operations of £8.6 million (H1’14 loss: £0.4 million)
• EBITDA loss before certain one-off items from continuing operations for period  from October 2014 when new management was appointed of £2 million*
• Revenue from continuing operations down 42% to £5.3 million (H1’14: £9.2 million)
• Net cash and short term receivables, excluding amounts due to clients increased 38% to £22.9 million (H1’14: £16.5 million)
• Introduction of new technologies substantially completed
• Cost base stabilised
• Marketing plans and spend are ready for the implementation of our  new technologies

* Certain one-off items include the Swiss Franc event (previously disclosed), additional administrative costs and IT spend.

Operational Highlights

• UK FSB  and CFD performance

– Divisional revenue down 33.4% to £5.1 million (H1’14: £7.7 million); divisional loss of £1.1 million (H1’14: profit £1.9 million)

– Key performance indicators

KPI average/month	H1’14 to H2’14	H2’14 to H1’15
Trades	9.7%	32%
Active traders	-12.6%	12%
Clients funds	-2.3%	17%
Volume indices	19%	9%
Volume forex	-14.3%	88%

 

• Institutional foreign exchange

– In early 2015, the institutional foreign exchange business was rationalised resulting in a reduction in the number of customers.

Commenting on the results, Charles-Henri Sabet, Chief Executive, said:

“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. We have been focused on developing exciting new technology, a full rebranding, initiating a new client journey as well as optimising our internal processes in order to facilitate client acquisition. We have also focused on rationalising the fixed cost base. Due to the positive direction shown in our key performance indicators, we are confident in our strategy during this transitional and challenging period.

Since the arrival of the new management team in October 2014, the Group has recognised an EBITDA loss of £5.4 million.  This is a result of: decreased revenues due to lower market volatility; an exceptional £1.7 million loss incurred as a result of the movement in the  Swiss Franc;  and additional administrative costs of £1.7 million mainly due to staff turnover, contracting fees and increased IT spend.  The EBITDA loss excluding the impact of the Swiss Franc event and additional administrative costs relating to staff turnover and IT would have been £2.0 million.

Our limited client growth in this period has been due to a core focus on our relaunch and a strategic decision to limit marketing of the current brand. We plan on launching our new product in the coming months with a full scale marketing drive and significant coverage.

The Group is confident that with the development of our new advanced technology, a renewed commitment to hiring the industry’s most talented people and a big increase in marketing driving our rebrand, the majority of the short-term strategy will be achieved in the second half of the year.”

 

	UnauditedSix months ended	UnauditedSix months ended
	30 June 2015	30 June 2014
	£’000	£’000
Total revenue from continuing operations	5,320	9,178
Adjusted loss before tax* from continuing operations	(9,858)	(899)
Statutory loss before tax from continuing operations	(8,592)	(435)
Basic earnings per share from continuing operations	(14.26)	(0.83)
Diluted earnings per share from continuing operations	(14.26)	(0.83)

 

** Adjusted loss before tax represents loss before tax excluding share based payment expense and the movement in the provision for FOS claims and restructuring costs. Applied consistently hereafter.

Source: London Capital Group – Interim Results for the Six Months Ended 30 June 2015

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