Despite a significant increase in turnover for the fiscal year 2023 ending on 31 March, Tavira Financial Limited (previously Tavira Securities), an agency broker specializing in global execution services for equities and derivatives, reported a net loss for the past year. This fits into a broader trend recently observed in the brokerage industry.
Tavira Financial's Revenues Rise but Remain Unprofitable in FY23
According to a report published by the Financial Conduct Authority regulated firm, gross revenue year-over-year (YoY) increased 22% to £14.64 million, compared to £9.68 million reported the year before. This was reflected in a higher turnover of £29.4 million, an increase of over £5 million YoY.
"The increase can be attributed to growth in Fixed Income (+264%), Custody & Clearing (+106%), and Corporate Broking (+477%)," the company commented in the official filing.
However, the firm did scale back some product lines in its traditional brokerage business, affecting brokerage revenues. Nonetheless, the brokerage remains an essential source of income for Tavira Financial. The company also acknowledged that its asset management business suffered in the fiscal year 2023. The reason was higher interest rates, which encouraged users to explore other forms of growing their savings.
Alongside the revenue growth, the company's administrative costs rose from £9.4 million in FY22 to £14.72 million in FY23. As a result, the operating loss amounted to £57,000, and the net loss was £126,000. In comparison, the company had a net profit of £423,000 in the previous reporting period.
"Even though costs have increased in line with revenues, the overall review of the financial year is positive. Our Sydney-based Australian branch continues to grow, both in revenue and broker headcount; while the London office expanded the brokerage and Corporate Broking services and client base through further recruitment," the company added.
A Varied Landscape for British Financial Firms
As the cut-off date for filing 2022 financial statements nears, many companies in the financial sector, including those specializing in foreign exchange , have unveiled their performance metrics. While many have reported increased revenue, profits have either dwindled or remained elusive.
Firms like Trading Point of Financial Instruments UK Limited disclosed a net deficit of £1.09 million in 2021, even with elevated revenues. FxPro indicated revenue growth but was accompanied by an expanding net loss, amounting to £614,558 for the year 2022.
Beeks Financial Cloud Group plc similarly reported a boost of 22% in revenue and an increase of 23% in Annualized Committed Monthly Recurring Revenue, yet recorded an operational loss of £331,000. The UK arm of Hantec Markets also witnessed a surge of 7% in revenue to £5.76 million but was unable to sustain profitability, registering a net loss of £83,968 for the period under review.
The pattern was similar in each of these cases: revenues were growing, but business costs rose significantly faster.
