WorldSpreads Targets International Markets for Growth22nd December 2009 10:54 am GMT
Following the disposal of its sports and Irish financial spread betting divisions this year, WorldSpreads Group plc has reported a 30% increase in revenues to €6.0 million for the six month period ended September 30th, with the company now looking to expand its international business into European, Asian and South American markets.
Despite the return to more normal levels of market volatility, revenues from the company's UK financial spread betting business performed strongly during the period, climbing 21% to €4.1 million, while revenues from the company's international division increased 53% to €1.9 million to account for more than 30% of total revenues.
Average trades per day from both the international and UK divisions grew by 18% to almost 4,500 during the six month period with a 56% increase in total active clients to 2,589.
Operating costs for continuing operations increased 21% year-on-year to €3.3 million, primarily as a result of greater investment in international market expansion, with profit from continuing operations amounting to €1.5 million, up 27% on the same period last year. Including the discontinued Irish operations, profit for the period fell 42%.
"We are very pleased to announce strong trading results for the period ended 30th September 2009. Whilst volatility has returned to more historically normal levels, the Group has still managed to maintain strong profitability, most notably in the UK and International markets," said WorldSpreads CEO, Conor Foley.
"Our focus remains on penetration of international markets outside Ireland and the UK and investing in the technological and product infrastructure which will be required to underpin this strategy."
WorldSpreads said it will focus on growing its international business to replace the revenues lost following the sale of the Irish division, which was completed yesterday. The company will concentrate on certain selected European, Asian and South American markets, involving a more direct approach in each market but with a low cost business model and a concentration on revenue share arrangements with local partners and direct marketing initiatives.
"The next six to twelve months will see some material expenditure on the expansion of our international operations and on the Group's resource base and systems necessary to support their growth," said Foley. "The Board will be applying some of the proceeds from the recent disposal towards funding this. Inevitably this investment programme will have an impact on the bottom line profits during this period but it will position the Group for strong growth in the periods ahead."
WorldSpreads said that trading since the end of September has been extremely positive, with November a record month for profitability. The company remains confident of meeting its current full year expectations.
"We are excited and optimistic about the initial progress we are making on the implementation of our key strategic plan which we believe will deliver long-term shareholder value," added Foley.
As at September 30th the company held cash and cash equivalents of €24.0 million and net assets of €19.4 million.
Despite the apparently strong trading results, shares in WorldSpreads Group plc (Co. Profile) (AIM:WRSP) have fallen 9.84% to 55.00 pence per share in London this morning following the announcement.