Playtech's TradeTech Group posted its full-year results for the year that ended on December 31st, 2017. The company’s bottom line has improved for the year, but the B2B and B2C financial services division of Playtech underperformed in the fourth quarter due to the crypto hype that generated losses for the firm.
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The B2B business of Playtech in 2017 saw material growth, with CFH servicing over $1 trillion in volume from B2B customers. After adding Alpha’s acquisition, the company is servicing over $1.3 trillion on a proforma basis after adjusting for pre-acquisition volumes in 2017.
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While TradeTech has delivered significant margin improvement, the company’s fourth quarter was negatively impacted by the crypto 'hype' experienced in the year. The total loss of $7.6 million from the company’s top line affected both the B2C segment as well as B2B.
Markets.com
The B2C business of TradeTech that operates the Markets.com brand posted significant growth on both first-time depositors and active customers. Active clients increased by 43 percent, while first-time depositors rose 93%. The improvement in the B2C business has been driven by the cost per acquisition of $870 in 2017. The company attributes the decline to improvements in the automated marketing capabilities of its software.
Low Volatility and the $7.4 million impact from the crypto hype in the final quarter of 2017 had a material impact on the top line performance of the B2C segment. The company expects that the number of active clients will continue to grow in 2018 and will be translated into higher revenues and profits going forward.
Volumes have remained relatively stable, with CySEC ’s regulatory changes related to the default leverage limitation of 1:50 and the elimination of incentive bonuses introduced at the beginning of 2017 being mitigated. markets.com generated about 62 percent of its revenue from existing customers that were on-boarded before 2017.
The majority of revenues are generated from customers trading for more than 1 year, with 28% from customers trading for more than 2 years.
TradeTech Group B2B results
The B2B segment of TradeTech posted significant growth excluding acquisitions and on a proforma basis. The results of the B2B division of TradeTech show a solid link between revenues and volume, with a steady revenue generation on the back of an increase in volume from customers from the three sub-segments of our B2B offering.
Commenting on the performance of the financial division, the chairman of the company, Alan Jackson, said: "Momentum in TradeTech Group continued with improvements across all KPIs. The division is strategically well positioned for the potential incoming regulations in the financial trading industry and 2017 saw TradeTech consolidate its B2B offering creating a full turnkey financial trading solution."
"Management is confident 2017 has delivered a strong platform for strategic progress in 2018 through execution of organic opportunities and M&A," Mr Jackson said in the earnings report.
