London Capital Group (LCG) has announced its financial trading update with revenues and income falling due to a decrease in trading volumes. LCG is blaming the shortfall on the third quarter’s low Volatility . As a result, the broker reported a loss during the third quarter and has announced that it has begun to apply cost cutting actions to mitigate the losses. The firm also reported that besides the negative quarter, it remains well capitalized with net cash resources of £21.5m.
Overall, the earnings release follows the trend among publicly reporting brokers of declines in trading volumes versus 2011's level. However, unlike other firms stating improvement taking place in September, LCG's release omitted any details of forward looking optimism.
23 October 2012 London Capital Group Holdings plc ("LCG" or the "Company") Trading update London Capital Group Holdings plc ("the Group" or "LCG"), the financial services and online spread betting company, gives the following trading update in respect of the third quarter of the current financial year ended 31 December 2012. The Group has experienced suppressed trading volumes in the third quarter due to low market volatility. Consequently revenue for the third quarter is significantly below that of the same period last year and the Group has realised an adjusted loss before tax for the third quarter. As a result the Group's adjusted profit before tax to 30 September 2012 is £0.6m. The Board had decided to adopt a prudent approach to respond to the falls in revenue and has already cut discretionary costs. In addition, the Board is undertaking a review of its overseas subsidiaries and an efficiency review to reduce controllable costs further to ensure the business can adapt to the low income environment currently being experienced. The Board is pleased to report that it has reached a Settlement with 37% of the outstanding FOS complainants which has resulted in the Group being able to write back £0.7m of the outstanding provision. The Group is continuing to defend robustly its position in respect of the remaining complainants with the FOS. The Group remains well capitalised with net cash resources of £21.5m as at 30 September 2012. For further information, please contact: www.londoncapitalgroup.com London Capital Group Holdings plc Simon Denham, Chief Executive Officer 020 7456 7000 Cenkos Securities plc Nicholas Wells/Camilla Hume 020 7397 8900 Smithfield Consultants John Kiely 020 7360 4900
