Tera Europe Ltd has released its annual financial records for the year 2017. The UK-based company, which operates FX broker TeraFX, saw a drastic increase in year on year revenue and profits.

The end of 2017 saw the broker with £5.26 million ($7.10 million) in turnover. This was nearly a five-fold year on year increase as the firm finished 2016 with £1.07 million ($1.45 million) in turnover.

This increase was accompanied by, and perhaps due to, a significant increase in spending on sales. In 2016, Tera spent £431,695 ($583,084) on its sales efforts. The firm’s financial report indicates this figure grew to £3.40 million ($4.59 million) in 2017 - a nearly 800 percent increase.

Administrative costs also increased significantly but not to as great an extent as sales costs. In 2016 the firm had administrative costs of £675,416 ($912,274). In 2017 these costs grew to £1.61 million ($2.17 million).

Change in strategy?

Despite the spike in administrative and sales costs, the firm was able to finish the year with £251,486 ($339,678) in pre-tax profit. This was a notable improvement on the previous year when the firm had losses of £40,653 ($54,909).

A tax rate of approximately 18 percent applied to the company’s earnings meant that Tera ended 2017 with £206,351 of profit. As a result, the firm saw substantial year-on-year growth, with the firm having finished 2016 with £34,184 in losses.

Although the firm offers its services to customers outside of the UK, the overwhelming majority of its income came from the British retail market. Of the £5.26 million in turnover, £5.20 million came from the UK market.

This was a significant change from 2016 when the firm made the bulk of its money in the European market. The company made £580,00 in revenue, of a total of £1.06 million, from European markets in 2016.

The disparity suggests that Tera FX was acting as an intermediary for other brokers and collected introduction fees for passing on their European clients to them. It also likely indicates a change in strategy for the firm as they centre their efforts entirely on the UK market. Whatever the case, the changes made by the firm seem to have paid off given the great improvements on 2016’s financial performance.