London Capital Group sees results improve under new management

Spread betting and CFD provider London Capital Group Holdings said Thursday that it expects group revenue to fall by 11 per cent to £22.5m for 2014, despite an improved performance during the final quarter of last year.

The company said that its results “accelerated” during Q4, the first trading period under its new management, generating revenue of £8.6m during the period. Revenue for the first nine months of the year was £13.9m.

Full year adjusted profit before tax is expected to be in the region of £0.3m, down 86 per cent versus the previous year.

This is before recognising a small credit in relation to share-based payments, impairment of goodwill of £8.0m, non-recurring restructuring costs of £1.4m and a credit relating to the Financial Ombudsman Service (FOS) claims provision which is no longer required of £0.6m.

At the year end, the outstanding FOS claims provision was £0.5m, compared to £4.7m a year ago, with the payment of new claims still on-going.

The company said that it moved from a position of underlying losses at the end of Q3 to finish the year with a small underlying trading profit.

“The group starts the new financial year transformed, making underlying profit on the back of revenue growth that accelerated during the fourth quarter and has strongly positioned us to take advantage of growth opportunities within our chosen markets,” said Charles-Henri Sabet, executive chairman of LCG. “The final quarter of 2014 saw the group restructured with a strongly recapitalised balance sheet and a new senior leadership team put into place.

“LCG's executive team has also recently been strengthened with a revitalised main board of directors who collectively bring a broad spectrum of skills and experience at the highest level within the financial, professional and investment services industries, all ideally suited for the next stage of the Group's development of new products and expansion into overseas markets.”

Sabet said that the building blocks are in place from a newly installed management to continue to drive growth as the new financial year progresses.

“We anticipate that volatility within the equities, commodities and foreign exchange markets will continue into the new financial year, although at this stage it is too early to predict the extent to this period of volatility, while we as a group will remain steadfast in the pursuit of growth in line with our chosen strategy in new and existing markets.”

Sabet added that the company will continue to progress the delivery of a new range of sophisticated investment and trading products using the best in responsive technology platforms to the benefit of its existing clients and in support of its expansion into new markets.

“We continue to invest in quality staff, ensuring we can deliver an institutional level of service and product in response to client demand and position the group for a return to sustainable growth at all levels of the business,” he said.

Shares in London Capital Group Holdings plc (Co. Data) (AIM:LCG) were trading at 41.24 pence per share in London earlier this morning following the announcement.