London Capital Group blames competition and low market volatility for H1 loss

17th Jul 2014 08:21

Spread-betting firm London Capital Group (LCG) announced lower half-year revenue, forecast a drop into the red and said it was launching a cost-cutting drive.LCG, which owns Capital Spreads, said first-half revenue from continuing operations dropped to £9.2m from £15.2m a year ago.It expects an adjusted pre-tax loss before one-off items in the six months to June 30th of about £900,000 compared to £2.8m profit from continuing operations a year ago and a £600,000 loss for the second half of last year.Pre-tax losses are likely to be about £400,000 against a profit of £100,000 a year ago.LCG said it was well-capitalised and had net cash resources and amounts due from brokers of £17.7m at June 30th.It said last month it plans to raise up to £17.5m through a proposed financing.It also said earlier this month in response to market speculation that it was in takeover talks from time to time, but had no such plans at the moment.Rival Spreadex later said it had made an approach to LCG, but the latter rejected it and Spreadex was considering its options. Chief Executive Kevin Ashby said: "The results for the half-year reflect the company's current concentration on the competitive UK market and a period of low market volatility."During the period, the company completed the deployment of its new trading platform and is undertaking a restructuring programme to align the cost base with the current level of trading."As announced earlier this month, we look forward to the active involvement of Charles-Henri Sabet and deploying the substantial additional resources to build out the company's capabilities and product offerings, strengthen our brand, develop broader products and services and attract a more diversified client base, both within the UK market and internationally." PW