FCA regulated online trading firm London Capital Group Holdings plc (LON:LCG) has announced its interim results for the six months ended 30 June 2016.
Operational Highlights
– Growth in total monthly active clients – increased 2% to 4,141 (H1 2015: 4,060)
This despite challenging trading conditions in Q2-16 prior to Brexit.
– Growth in monthly open & funded accounts – monthly average increased 15% to 325 (H1 2015: 283).
This demonstrates the increasing effectiveness of the new brand, platform and marketing activities.
Post Period End Events
· Issue of new equity and redemption of CLN on 6 July 2016.
· Around £8.3m of debt redeemed and replaced with equity.
· 286,207,779 new shares issued
· Re-affirms the commitment of GLIO to the business.
Charles-Henri Sabet, LCG
Commenting on the results, Charles-Henri Sabet, Chief Executive, said:
Despite the tough trading conditions seen at the tail end of Q1-16 and through Q2-16 prior to the Brexit vote, the Group has seen strong revenue growth primarily due to increased revenue capture compared to prior periods. The integration of new technology coupled with a resilient and loyal client base continues to see LCG grow despite the continued lack of volatility in the market resulting in a benign trading environment. LCG’s ability to capture and take advantage of trading opportunities means the Group is now better placed to be resilient during periods where trading conditions are weak”.
The first half of 2016 has seen revenues increase 111% from the same period in the prior year and the Group has seen monthly average open and funded accounts up 15% on the previous year and, although total client funds decreased 11% over the same period, it is anticipated that as the brand continues to gain traction through marketing activities, this will begin to have a positive impact.
Costs of sales for the period are £1.9m (2015 H1: £2.3m) and gross profit is £9.2m which represents an 82% gross profit margin on revenues (2015 H1: £3.0m gross profit and 57% gross profit margin). This increase in gross profit margin is the result of the increase in revenue capture the firm has seen since the introduction of the enhanced risk management analysis of client behaviour without any incremental increase in cost of sales.
EBITDA for the 6 month period is a loss of £2.1m (2015 H1: loss of £7.5m) and is an approx. 71% improvement on the same period last year. Administrative costs remain on the higher side at £12.4m for the period (2015 H1: £9.9m) but the Group expects to see the benefits of its cost reduction initiatives in the second half of the year.
The loss before tax was £3.5m (2015 H1: loss of £8.6m) and demonstrates the improvements the Group have made to ensure that despite poor trading conditions seen in Q2-2016, there is a clear path of improvement and move toward sustainable long term profitability, through its improved branding, technology and investment in people.
The net cash and short term receivables, decreased 38% to £14.0m (2015 H1: £22.9m) primarily as a result of the losses for the second half of 2015 (2015 Full year loss: £14.9m). Available liquidity which comprises own cash held, title transfer funds, unsegregated funds and amounts due from brokers decreased by £1.7m from 31 December 2015.
For the full announcement, click here.