London-based broker Valutrades has published its 2023 results for its FCA-regulated business. A turnover more than four times smaller than the previous year resulted in a significant operating loss and a net loss of nearly £4 million.

Valutrades Closes 2023 with Substantial Loss

According to Valutrades Limited's financial report filed with Companies House, the company's revenue in 2023 stood at £1.5 million, falling by almost 80% from the £6.5 million reported the previous year.

“2023 was a challenging year for Valutrades with market 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 confined to large ranges resulting in a poor performance of Valutrades trade internalization as well as clients shifting business to more interesting products such as equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term that saw a resurgence in bull markets,” the company commented in the report.

The company's sales costs decreased by 34%, but not enough to maintain profitability. The operating profit of £552,000 from 2022 was wiped out, resulting in a loss of £3.7 million. The final net loss in 2023 amounted to £3.8 million.

The value of retail client funds held by the firm also shrank by nearly £1.4 million. In 2022, it still stood at £3.4 million, now falling to just under £2 million.

“Valutrades understands the cyclical nature of markets it operates in and expects tough years to be balanced with easier years over the long term while the short to medium term focus remains on growth above profitability,” the company added.

The report also indicates that the business slowdown was partly due to “a year-long project to upgrade Valutrades core client area technologies.”

Mixed Results for The UK Brokers

While Valutrades' performance has significantly declined compared to 2022, the CFD broker is not alone in facing challenges. Several other UK-licensed firms have recently published mixed results, reflecting a turbulent period in the industry.

Trade Nation, for instance, reported lower turnover in its UK operations, resulting in a financial loss of £2.2 million. The company's turnover decreased from £14 million to £13.4 million year-over-year, with an operating profit of £1.2 million turning into a loss of £2.6 million.

Similarly, ParFX, regulated by the FCA, experienced a 14% drop in revenue in 2023 due to a decrease in client numbers. The company's net profit shrank by a substantial 84% to $934,000. Despite these setbacks, ParFX, a subsidiary of the Tradition UK Group, has plans to expand its global distribution network and broaden its “FX electronic trading community.”

In contrast, Equiti Capital UK Limited, the FCA-regulated arm of Equiti Group, managed to increase its trading revenue and operating profit in 2023. However, the company's total comprehensive income turned out to be over 30% lower than the previous year, indicating that even firms with positive growth are not immune to market pressures.