We have been covering in detail the performance and changes in publicly traded online trading company London Capital Group (LON: LCG), who’s stock price is down roughly 30% year-to-date. While the company has no plans of throwing in the towel, they made it clear in their 2013 annual report they are looking to regain solid footing after a “transition” year. For LCG, a big part regaining positive momentum and growth again is planning for internationalization amid other operational changes and enhancements, which is further highlighted in this 2014 H1 report.
The firm’s 2013 annual report stated generally that confidence of the business has materially improved with challenges ahead…and those challenges in 2014 haven’t been easy so far. But, has the company hit a bottom, with nowhere to go but up? We saw another glimpse into the company’s operations today as LCG released it’s interim report for 2014.
CEO, Kevin Ashby released the following statement: “LCG has suffered from a lack of investment in innovation, sales and marketing over the past two years. We have made inroads into addressing these issues, however significant financial resources are required to drive the longer-term growth of the Company. The convertible loan note financing, secured from GLIO Holdings Limited and possibly existing shareholders of up to £17.5m, will allow the business to do this. The Board is confident that with this significant investment and the return to more volatile market conditions we will deliver strong client and revenue growth in the future.”
Some highlights from the report
– Total revenue for the Group amounted to £9.2m (H1’13 from continuing operations: £15.2m), a decline of 8% on H2′ 13 and 39% on H1’13.
– LCG lost money in the first half, but it was a relatively modest loss of £400,000
– The complete management overhaul continues with CFO David Sparks resigning – earlier COO John Jones left.
– LCG has been losing clients, with 4,140 active traders versus about 6,000 last year
– LCG’s need to inject more cash via the Sabet deal is more apparent now – their ‘Own cash held’ dropped to £12.4 million from £16.9 million at year-end.
– Won the Best Platform award at the Money AM – Online Personal Wealth Management Awards 2014 and we were the highest ranked of the spread betting-CFD firms for best customer services.
LCG’s institutional FX business a familiar theme
LCG states that it’s institutional foreign exchange business continues to suffer from falling volumes predominantly due to subdued FX markets globally. This combined with squeezed commission rates resulted in a revenue fall of 29% and a contribution fall of 52%. However, average monthly volumes have held up well on the same period last year at $19.2bn (H1’13:$20.9bn) providing confidence that when FX global volumes increase so should the divisions revenue and operating profit.
LCG price chart since September ’13 reflects company results; Courtesy: LSE
To view the complete report filed with the London Stock Exchange including all the juicy details, click here.