London Capital Group Limited, owned by Charles Henri Sabet who controlled Swiss firm Flowbank, ended the financial year 2021 ended on 31 December with revenue of more than £1.58 million, which is 86 percent lower than the previous year, the latest Companies House filing revealed.

LCG Narrows Losses Significantly

Operating under the trade name LCG, the company generated £1.09 million in gross profits for the year, which declined by 89 percent. However, it narrowed the pre-tax losses to £1.74 million compared to the previous year's £2.13 percent, which is an improvement of 18 percent.

Following Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term, LCG primarily operates with its Financial Conduct Authority (FCA Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) license. Now, the company focuses only on its UK client base after losing passporting rights for operations in the European Union. However, Its sister entity LCG Capital Markets Limited, Bahamas, operates globally with authorization from the offshore regulator.

A Decline in Trading Demand

The company's revenue took a dent as the trading volume for the year decreased by 58 percent to £68 billion. Moreover, the number of monthly active clients declined by 27 percent to 4,461. The client balance on the platform dropped by 9 percent to £14.7 million.

On the positive side, it managed to reduce administrative costs by 54 percent to £5.6 million.

LCG generates revenue from the dealing spread, which is the difference between the contracts' buy and sell price for differences (CFDs) and spread betting products, commission income, and exchange gains and interests.

"A significant structural change to the company, the ongoing impact of Brexit, regulatory changes to the CFD industry, and market volatility have all impacted business performance for the twelve months ended 31 December 2021. Overall, the company has experienced a material fall in revenues, but reduced costs have resulted in a smaller operating loss for the year versus the year prior," the filing stated.

Previously, LCG was a part of the London Capital Group Holdings, which ran into trouble after delisting from the London Stock Exchange and NEX Exchange in 2018. The same year, Charles Henri Sabet, then heading as the CEO, bought LCG, separating it from the troubled London Capital Group Holdings, which went into liquidation.

Sabet made some structural changes in the ownership of LCG after he launched Switzerland-based FlowBank in 2020.

"LCG's transition to a new business arrangement with its parent company (FlowBank SA) required a major adjustment to day-to-day operations, and management expects to continue to devote significant time into making it a success. The structural changes have reduced costs but resulted in an expected reduction in average monthly trading volume and revenues," the filing added.