TechFinancials Warns That H1 Results Will Be Flat

TechFinancials Inc. (AIM: TECH), the software developer that supplies simplified trading solutions to online brokers, has provided a preview of its H1 interim results to June 30, 2015, which are expected to be announced in full in the second half of September 2015. The trading update, which was published via the London Stock Exchange, hints at disappointing H1 results.

TechFinancials is a provider of technology for trading binary options. The company’s business model relies on delivering an end-to-end solution to white labels that market the product independently. The firm also has its own white label under the brand name OptionFair.

Overall, revenue was up a modest 2.6% to $7.34 million, compared to $7.15 million in the first half of 2014. Operating performance improved marginally compared with the same period in 2014, but EBITDA, while positive, has been affected by an increase in necessary research and development expenditure.

At first glance, the H1 results do not compare to the strong YoY growth that the company recorded when it published its first official results in June, for the 2014 financial year, since the company was listed on the London Stock Exchange’s Alternative Investments Market (LSE AIM). The firm recorded $15.5 million of revenues for the full year ending on December 31st, 2014, marking an 85% increase when compared to the previous year.

In the statement, TechFinancials highlighted the underlying cause of the poor performance, noting that the rate of customer conversion at the company’s B2C OptionFair business had not met expectations. The company cites CySEC CySEC The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision Read this Term compliance issues and reassured shareholders saying, “The Company has instigated changes to its management and operations in Cyprus to restore and improve its rate of customer conversion.”

Consequently, the market can expect flatter revenues and profits for the year to December 31, 2015 than previously thought, while the company maintains that OptionFair will return to a higher level of customer conversion and improved profitability in the next financial year.

Asaf Lahav, Group CEO of TechFinancials, said: "Whilst the performance of OptionFair is disappointing, the Group remains positive about the long-term prospects for the B2C segment, as the new management structure takes shape. The Company's core B2B Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term software continues to perform well, and the Group is continually looking at opportunities in new domestic and overseas markets with high growth potential."