TechFinancials reports decrease in Group revenue by 12% to US$13.6 million 

TechFinancials (AIM: TECH), a leading technology provider to binary options brokers, today announces its results for the year ended 31 December 2015.

Operational Highlights

Software Licensing (B2B)

• B2B business has performed strongly with significant revenue growth of 30% year-on-year
• Growth in number of active brands using the Company’s platform increased 16.7% to 56 (2014: 48)
  1. Launch of simplified Forex platform
  2. Launch of Mobile and Tablet Trading solutions
  3. Launch of an add-on Contract For Difference (“CFD”) trading platform targeted for the second half of 2016
• Major push into the Asia Pacific region through the opening of a Hong Kong office to expand B2B services in the region
• Developing a regulated solution for Japan
• Expect to complete our trading solution to comply with US regulations in 2016

Trading Platform (B2C)

• The tougher regulatory environment in the B2C sector impacted revenues and profitability in this division
• Signed two agreements:
  1. With Optionfortune Trade Ltd. (“Optionfortune”) in October 2015 to run a new B2C binary options trading platform focused on the Asia Pacific Region
  2. With IBID Holdings Limited (“IBID”) in February 2016 to grow one of the Company’s existing B2C binary options trading brands
• Group revenue decreased by 12% to US$13.6 million (2014: US$15.5 million)
• Net cash generated from operating activities remains positive
• Core software licensing revenue increased by 30% to US$8.6 million (2014: US$6.6 million)
• Trading platform revenues decreased by 44% to US$5.0 million (2014: US$8.9 million)
• Gross margins increased to 71% (2014: 65%)
• Operating loss of US$0.1 million (2014: operating profit US$1.0 million)
• Adjusted EBITDA was US$0.6 million (2014: US$2.3 million)
• Pre-tax loss of US$0.4 million (2014: pre-tax profit of US$0.8 million)
• Strong cash position of US$3.4 million as at 31 December 2015
• Basic earnings per share (‘EPS’) has fallen from a profit of US$0.012 in 2014 to a loss of US$0.0073 in 2015
• 2016 has started well and Q1 trading was in line with market expectations

Financial Highlights

• Group revenue decreased by 12% to US$13.6 million (2014: US$15.5 million)
• Net cash generated from operating activities remains positive
• Core software licensing revenue increased by 30% to US$8.6 million (2014: US$6.6 million)
• Trading platform revenues decreased by 44% to US$5.0 million (2014: US$8.9 million)
• Gross margins increased to 71% (2014: 65%)
• Operating loss of US$0.1 million (2014: operating profit US$1.0 million)
• Adjusted EBITDA was US$0.6 million (2014: US$2.3 million)
• Pre-tax loss of US$0.4 million (2014: pre-tax profit of US$0.8 million)
• Strong cash position of US$3.4 million as at 31 December 2015
• Basic earnings per share (‘EPS’) has fallen from a profit of US$0.012 in 2014 to a loss of US$0.0073 in 2015
• 2016 has started well and Q1 trading was in line with market expectations

Asaf Lahav, Group Chief Executive Officer of TechFinancials, commented:

“2015 was a transformational year in which we completed our AIM listing. Our B2B software licencing division continued to perform well. However, the Company also had to deal with an increased regulatory environment which impacted our B2C OptionFair business. In response to this, the Group undertook a number of actions to reverse the difficulties it faced due to increased regulatory supervision and we are confident that the Group is now better positioned moving forwards and that we have built strong foundations for renewed growth.

“Looking ahead, we will continue to invest heavily in R&D, new markets, ongoing regulatory compliance and marketing activities that will increase our global brand awareness. Our focus in 2016 will be on integrating our new agreements with Optionfortune and IBID, and building on the recent progress made in restoring our B2C offering to profitability. We are pleased to report that the 2016 financial year has started well and Q1 trading was in line with market expectations. We remain committed to creating value for shareholders and we look forward to updating the market on our progress in due course.”

Source: TechFinancials

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