Spreadex, a sports and financial spread betting platform, has filed its annual financial report ending on May 31, 2020, showing a total turnover of over £40.05 million, a drop of almost 8 percent from the number posted in the previous year.
In the Companies House filing, the company has highlighted the impact of the COVID-19 outbreak as the reason behind the slow down in business.
The net profit of the UK-based company also fell 24.4 percent to £19.05 million from £25.2 million the previous year.
“The trading company has seen strong growth in some of its key performance indicators of bet numbers and active clients. However, the pre-tax profit has fallen mainly because of the impact of the COVID-19 pandemic and the continued challenges posed by the ESMA rule changes introduced in August 2018,” the spread betting platform noted.
Indeed, many other trading platforms’ businesses were also hit by the ESMA restriction on the offered Leverage and marketing limitations.
The balance sheet of the company, however, was strengthened with a net asset of £82.9 million, compared to the £63.8 million reported last year - a year-on-year jump of 30 percent.
“There is no debt on the balance sheet,” the company highlighted. “Our cash collaterals at our brokers (hedging counterparts) has increased because of the increased activity as the financials business has grown.”
Further, to strengthen the cash retention, the company refrained from paying out any dividends to its investors - in the last financial year, it paid £31.3 million as dividends.
Market Volatility pushed clients towards trading
Spreadex also detailed that its financial room was benefited by the extreme market volatility since mid-February as it onboarded new clients and also dormant accounts became active, but the sports business took a hit due to the cancellation of fixtures.
“When all the sports events were canceled in the UK, we modeled some likely outcomes based on the few overseas sports that were available. However, in the last quarter of the financial year, we comfortably outperformed these predictions,” the spread betting company added.
