LCG Reports Smaller Loss for 2016 as Revenues Surge 50 Percent

UK-based FX, spread betting and CFDs provider London Capital Group (LCG) has disclosed its fiscal results for the 2016 financial year, which were characterized by notable improvements across the board relative to the year prior, according to an LCG statement.

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LCG’s revenues pointed higher during the reported period, coming in at £23.2 million ($30.3 million), up 50 percent from £15.5 million ($20.3 million) the year before. The uptick in the group’s revenue was attributed to enhancements to the brand, marketing strategy and increased client acquisition.

Specifically, active accounts were up 35% as the group continues to improve the brand and expand into new markets and territories.

In addition, LCG’s gross profit rose 86 percent year-over-year to £19.6 million ($25.6 million), which reflected a sizable jump from only £10.5 million ($13.7 million) the year prior.

Although LCG’s efforts have paid off across the gross revenues and income metrics, the group’s overall performance yielded a loss before tax of £7.8 million ($10.21 million) for the twelve months ending December 31, 2016. However, this figure was 46% lower than the prior year (£14.5 million) as a result of the increased revenues for the group.

In terms of client assets and active trading clients, the figures were down 6% and 8% respectively, which according to LCG was due to low Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term seen in the financial markets last year. Total client money at year-end was £19.1 million ($25.1 million) compared to £23.8 million ($31.2 million) in 2015.

Cost savings to materialise this year

During 2016, LCG’s business went through a phase of consolidation as management focused on getting the building blocks in place to position the company for a return to profitability. Furthermore, the firm expects the full benefits of the savings associated with the restructuring process to materialise in the 2017 financial year.

The company’s chairman commented on the results: “We continue to invest in and develop our people, products and services, to provide our clients with the service they expect in order to ensure that LCG is their provider of choice for their trading needs. Part of that investment and growth has resulted in the Group further developing its product offering by improving its Meta Trader 4 and LCG Trader platforms, which the Board expects will create a greater appeal to markets outside of the Group's traditional UK market place.”

Concerning the regulatory landscape, he added: “The recent announcements from the Financial Conduct Authority ("FCA") and other European regulators to protect clients through reduced Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term and enhanced risk warnings is in line with LCG's position of ensuring that the customer is protected and to improve customer outcomes. LCG is fully supportive of the efforts of global regulatory bodies to ensure that client interests are served at all times. Although no final announcement has been issued by the FCA, LCG remain committed to ensuring that the Group continues to operate to the highest regulatory standards.”