TIDMLCG
RNS Number : 0604Q
London Capital Group Holdings PLC
27 August 2014
27 August 2014
LONDON CAPITAL GROUP HOLDINGS PLC
("LCG", "LCGH", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2014
London Capital Group Holdings plc today announces interim
results for the six months ended 30 June 2014.
Operating Summary
-- Financing of up to GBP17.5 million approved by shareholders
on 3 July 2014
-- Adjusted loss before tax* from continuing operations of
GBP0.9 million (H1'13 profit: GBP2.9 million)
-- Loss before tax from continuing operations of GBP0.4 million
(H1'13 profit: GBP0.1 million)
-- Revenue from continuing operations down 39% to GBP9.2 million
(H1'13: GBP15.2 million)
-- Net cash and short term receivables, excluding amounts due to
clients and GBP3.6m in settlement of FOS claims, down 11% to
GBP16.5m (H1'13: GBP22.5m)
Commenting on the results, Kevin Ashby, Chief Executive,
said:
"The business has been operating in challenging market
conditions throughout the first half of the year, with relatively
low levels of volatility across financial markets for much of the
period. We have been focused on completing the deployment of the
new trading platform and a programme to rationalise the fixed cost
base.
The Group welcomes the additional investment due in the second
half of the year which will allow the business to drive its
marketing, sales and product development. We also look forward to
the proposed addition of Charles-Henri Sabet to the LCG Board as
Executive Chairman in September and the attributes he will
bring."
Unaudited Unaudited
Six months ended Six months ended
30 June 2014 30 June 2013
GBP'000 GBP'000
Total revenue from continuing and discontinued operations 9,178 17,140
Total revenue from continuing operations 9,178 15,248
Adjusted (loss)/profit before tax* from continuing and discontinued
operations (899) 3,237
Adjusted (loss)/profit before tax from continuing operations (899) 2,871
Adjusted profit before tax from discontinued operations - 366
Statutory loss before tax from continuing operations (435) (43)
Basic earnings per share from continuing operations (0.83) (0.08)
Diluted earnings per share from continuing operations (0.83) (0.08)
* Adjusted loss before tax represents loss before tax excluding
share based payment expense, impairment charges to goodwill and
investments, non-recurring restructuring costs, costs related to
change in IT platform, the movement in the provision for FOS claims
and non-recurring legal fees. Applied consistently hereafter.
For further information, please contact: www.londoncapitalgroup.com
London Capital Group Holdings plc 020 7456 7000
Kevin Ashby, Chief Executive Officer
Smithfield Consultants 020 7360 4900
John Kiely
Cenkos Securities plc
Nicholas Wells 020 7397 8900
Print resolution images are available for the media to view and
download from www.vismedia.co.uk
Notes to Editors:
London Capital Group Holdings plc (hereafter "LCGH" or "London
Capital Group" or "the Company" or "the Group") is a financial
services company offering online trading services.
London Capital Group Limited (LCG Ltd), a wholly owned trading
subsidiary of LCGH, is authorised and regulated by the Financial
Conduct Authority. Its core activity is the provision of spread
betting and CFD products on the financial markets to retail clients
under the trading names Capital Spreads, Capital CFDs and LCG MT.
Its other division provides online foreign exchange trading
services to institutional and professional clients. LCG Ltd is one
of the leading providers of white label financial spread trading
and CFD platforms and its white label partners include TD Direct
Investing, Bwin.party, and Saxo Bank.
LCG Ltd has a European passport and is a member of the London
Stock Exchange. LCG Ltd also has access to international markets
through its global clearing relationships.
LCGH plc is listed on the London Stock Exchange's AIM market.
LCG is included in the General Financial sector (8770) and
Speciality Finance sub sector (8775) and has a RIC code of
LCG.L.
Chairman's statement
Against the backdrop of challenging market conditions much has
been accomplished in the first half of 2014. The Board and the
executive team focused on completing the migration to the new
trading platform, which was concluded in April this year, giving
the business a strong base on which to develop innovative products
and differentiate Capital Spreads in the market going forward.
The platform migration combined with broad market conditions
being subdued, with relatively low levels of volatility across
financial markets, and a drop in active client numbers resulted in
revenue from continuing operations for the first half of the year
falling 39% on the same period last year. Given the results for the
first half year the board does not consider it appropriate to pay
an interim dividend.
In July 2014 a resolution was passed by shareholders to approve
the proposed investment by GLIO holdings Limited and possibly
existing shareholders of up to GBP17.5 million. The Group looks
forward to using these additional resources to build its
capabilities and product offerings which will give us the
opportunity to strengthen the brand, develop broader and more
innovative products and service offerings, and attract a more
diversified client base, both within the UK market and
internationally. This in turn will allow the Group to realise its
strategy set out in the 2013 annual report.
Many of the legacy problems relating to the business have now
been addressed and the claims made to date to the FOS in relation
to Life Settlement Consulting Limited (Integrity) have been settled
in the period.
As announced in July, John Jones has resigned as Chief Operating
Officer to pursue other interests and his resignation took effect
immediately although he will remain as an advisor to the Company to
ensure a smooth transition. Also David Sparks, Chief Financial
Officer, has informed the Board that he intends to leave LCG in
order to take up an opportunity with another company. Accordingly,
the Board has agreed that David will leave the Company and the
Board on 12 September 2014. He will remain available to the Board
on a consultancy basis for a short time thereafter and Jenny
Himsley, Group Financial Controller, will assume responsibility for
the Finance function. The Board would like to thank John and David
for their hard work and contribution to the Company.
There will be further board changes in September as I step down
as Chairman to become the senior independent director, and
Charles-Henri Sabet becomes Executive Chairman. We look forward to
him leading the board and the focus on the growth and development
of the Group in the second half of the year.
Giles Vardey
Chairman
Chief Executive's Statement
As previously discussed, 2013 was a year of significant change
for the Group, from a management, processes and systems
perspective. The migration to the new core trading system completed
in April has allowed the executive team to focus on delivering
innovation to our clients.
I am delighted to confirm that we recently won the Best Platform
award at the Money AM - Online Personal Wealth Management Awards
2014 and we were the highest ranked of the spread betting /CFD
firms for best customer services.
Financial Results
The spread betting sector in the UK remains highly competitive;
however the Group continues to pursue its strategy of product
development and expansion into foreign markets. This combined with
ensuring the customer experience is core to all we do will ensure
the Group is well positioned as a preferred provider.
The first half of the year has been a difficult trading period,
with market conditions not particularly conducive to the style of
trading favoured by our retail derivative clients. A lack of market
volatility has meant that trading volumes in the spread betting and
CFD business was lower than H1 2013. This combined with reduced FX
global trade volumes and squeezed commission rates has resulted in
a loss before tax for the period of GBP0.4m (H1'13 profit from
continuing operations: GBP0.1m).
Total revenue for the Group amounted to GBP9.2m (H1'13 from
continuing operations: GBP15.2m), a decline of 8% on H2' 13 and 39%
on H1'13. Adjusted administrative costs from continuing operations
have fallen 17% due to careful cost control by management and
further cost reductions are being made early in the second half of
the year, which will make a positive contribution in 2014.
Adjusted loss before tax from continuing operations was GBP0.9m,
compared to a loss of GBP0.7m for H2'13 and a profit of GBP2.9m for
H1'13. Adjusted profit before tax is stated before recognising a
small charge in relation to share based payments and a credit
relating to the Financial Ombudsman Service (FOS) claims provision
of GBP0.5m arising from a combination of claims rejected by the
FOS, claims being settled more quickly than expected, thereby
accruing less interest than anticipated, and an update to the
Directors' best estimate of the level of possible future
claimants.
UK Financial Spread betting and CFDs
Revenue derived from the UK Financial Spread betting and CFD
business was GBP7.7m (H1'13: GBP13.2m). The division has
experienced a difficult trading period with some weaker underlying
trading statistics. Average trades per day have fallen to 18,595
(H1'13: 25,900) and average monthly unique active users decreased
to 4,140 (H1'13: 5,984). Funds on deposit from the UK Financial
Spread betting and CFD business fell by 10% to GBP22.0m from
GBP22.5m at 31 December 2013.
FX
The institutional foreign exchange business continues to suffer
from falling volumes predominantly due to subdued FX markets
globally. This combined with squeezed commission rates resulted in
a revenue fall of 29% and a contribution fall of 52%. However,
average monthly volumes have held up well on the same period last
year at $19.2bn (H1'13:$20.9bn) providing confidence that when FX
global volumes increase so should the divisions revenue and
operating profit.
Available liquidity and cash flow
Unaudited Unaudited Audited
30 June 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
Own cash held 12,355 20,000 16,876
Short term receivables: Amounts
due from brokers 4,172 2,481 4,607
---------- ---------- -------------
Net cash and short term receivables 16,527 22,481 21,483
---------- ---------- -------------
Title transfer funds and unsegregated
funds 1,205 9,297 329
---------- ---------- -------------
Available liquid resources 17,732 31,778 21,812
---------- ---------- -------------
Net cash and short term receivables after accounting for GBP3.6m
in settlement of FOS claims, dropped 11% to GBP16.5m (H1'13:
GBP22.5m). Available liquidity which comprises own cash held, title
transfer funds, unsegregated funds and amounts due from brokers
decreased by GBP4.1m. From December 2013 Institutional FX client
funds have been treated as segregated, as required by the FCA,
except where a title transfer collateral arrangement (TTCA) is in
place. This is the principal reason for the fall in the title
transfer and unsegregated funds between June 2013 and June
2014.
Strategy
The short term focus of the business has been the improvement of
processes as well as delivery and analysis of key KPIs and business
information. This is well under way and the executive team is using
this detailed data to make significant business decisions, the
results of which we expect to see in the second half of 2014 and
beyond.
Now that the migration to the new trading platform is complete
we are concentrating on delivering innovation to customers which
will allow them to make better trading decisions. Innovation is the
future business focus and will give customers a reason to move to
Capital Spreads from our competitors. The new technology
deployments will allow the Group to develop market leading
applications allowing our clients to trade more easily across
mobile devices, smart phones and tablets and as straightforwardly
as on their desktops.
Our marketing is being aimed at attracting this new trading
group by differentiating ourselves and giving a reason for the
customer to move to Capital Spreads. This combined with improving
our customer journey and remaining customer centric will ensure
that the Group continues to be in a strong strategic position.
The level of resources dedicated to developing and growing the
institutional and white label partnership area of the business was
neglected in the latter half of 2012 and 2013, the results of which
were felt towards the end of 2013 and the first half of this year.
We are working to develop these areas of the business with stronger
sales and partnerships teams now supporting this business. However,
due to the long sales cycles associated with these areas of the
business the upturn from this is taking longer to realise than
initially anticipated.
Outlook
LCG has suffered from a lack of investment in innovation, sales
and marketing over the past two years. We have made inroads into
addressing these issues, however significant financial resources
are required to drive the longer-term growth of the Company. The
convertible loan note financing, secured from GLIO Holdings Limited
and possibly existing shareholders of up to GBP17.5m, will allow
the business to do this. The Board is confident that with this
significant investment and the return to more volatile market
conditions we will deliver strong client and revenue growth in the
future.
Kevin Ashby
Chief Executive
London Capital Group Holdings plc
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 30 June 2014
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 30 to 30 31 December
June 2014 June 2013 2013
Notes GBP'000 GBP'000 GBP'000
Revenue 3 9,178 15,248 25,189
Cost of sales (2,798) (3,732) (7,438)
----------- ----------- -------------
Gross profit 6,380 11,516 17,751
Administrative expenses (before
certain items)
Certain items: (7,307) (8,774) (15,662)
Release/(charge) for provision
against FOS claims 11 475 (1,140) (1,067)
Impairment of goodwill - - (1,353)
Impairment loss recognised on available-for-sale
equity investments - - (100)
Restructuring costs - (692) (854)
Costs related to change in IT platform
including accelerated amortisation
Non recurring legal fees - (915) (1,730)
Share-based payment charge - - (1,879)
(11) (30) (13)
--------------------------------------------------- ------ ----------- ----------- -------------
Total administrative expenses (6,843) (11,551) (22,658)
Operating (loss)/profit (463) (35) (4,907)
Investment revenue 14 129 107
(Loss)/profit before taxation (449) 94 (4,800)
Tax credit/(expense) 14 (137) 442
(Loss) for the period from continuing
operations (435) (43) (4,358)
Discontinued operations
Profit for the period from discontinued
operations - 366 635
(Loss)/profit for the period (435) 323 (3,723)
Earnings per share
From continuing operations:
Pence Pence Pence
Basic 5 (0.83) (0.08) (8.32)
Diluted 5 (0.83) (0.08) (8.32)
Adjusted basic 5 (1.50) 3.94 5.04
From continuing and discontinuing
operations:
Pence Pence Pence
Basic 5 (0.83) 0.62 (7.11)
Diluted 5 (0.83) 0.62 (7.11)
Adjusted basic 5 (1.50) 4.64 6.25
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June 2014
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 30 June to 30 June 31 December
2014 2013 2013
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (435) 323 (3,723)
Exchange differences in translation - - -
of foreign operations
------------ ------------ -------------
Total comprehensive (loss)/income
for the period (435) 323 (3,723)
------------ ------------ -------------
Total comprehensive (loss)/income
for the period attributable to
the owners of the parent (435) 323 (3,723)
============ ============ =============
London Capital Group Holdings plc
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 June 2014
Unaudited Unaudited Audited
30 June 30 June 31 December
2014 2013 2013
Notes GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Intangible assets 9,446 11,615 9,337
Property, plant and equipment 1,682 2,075 1,845
Available-for-sale investment - 100 -
Deferred tax asset 348 24 335
11,476 13,814 11,517
------------ ------------ --------------
CURRENT ASSETS
Trade and other receivables 7 6,228 4,438 6,735
Current tax receivables 470 102 470
Cash and cash equivalents 8 13,560 29,297 17,205
Assets classified as held for - 5,630 -
sale
20,258 39,467 24,410
------------ ------------ --------------
TOTAL ASSETS 31,734 53,281 35,927
------------ ------------ --------------
CURRENT LIABILITIES
Trade and other payables 9,10 3,611 12,538 3,336
Provisions 11 608 4,725 4,652
Liabilities directly associated
with assets classified as held - 4,140 -
for sale
4,219 21,403 7,988
------------ ------------ --------------
TOTAL LIABILITIES 4,219 21,403 7,988
NET ASSETS 27,515 31,878 27,939
============ ============ ==============
EQUITY
Share capital 5,580 5,318 5,580
Share premium account 20,592 19,572 20,592
Own shares held (2,569) (1,287) (2,569)
Retained profits 9,256 13,619 9,680
Other reserves (5,344) (5,344) (5,344)
TOTAL EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT 27,515 31,878 27,939
============ ============ ==============
London Capital Group Holdings plc
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 June 2014
Share Own shares
Share capital premium held Retained Other Total equity
account profits reserves
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2013 5,318 19,572 (1,287) 13,343 (5,344) 31,602
Total
comprehensive
income for the
period - - - 323 - 323
Share based
payment
transactions - - - 30 - 30
Reclassification
of foreign
currency
differences on
disposal of
subsidiary - - - 24 - 24
At 30 June 2013 5,318 19,572 (1,287) 13,720 (5,344) 31,979
Issue of share
capital 262 1,020 (1,282) - - -
Total
comprehensive
loss for the
period - - - (4,046) - (4,046)
Share based
payment
transactions - - - (17) - (17)
Reclassification
of foreign
currency
differences on
disposal of
subsidiary - - - 23 - 23
At 1 January 2014 5,580 20,592 (2,569) 9,680 (5,344) 27,939
Total
comprehensive
loss for the
period - - - (435) - (435)
Share based
payment
transactions - - - 11 - 11
At 30 June 2014 5,580 20,592 (2,569) 9,256 (5,344) 27,515
=============== ============== =============== ============== =============== ===============
London Capital Group Holdings plc
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the period ended 30 June 2014
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 30 to 30 31 December
June 2014 June 2014
2013
GBP'000 GBP'000 GBP'000
Loss/(profit) for the financial
period (435) 323 (3,723)
Adjustments for:
Depreciation of property, plant
and equipment 198 256 512
Amortisation of intangible assets 287 1,204 2,505
Write off of goodwill - - 1,353
Share based payments 11 30 13
Gain on disposal of discontinued
operation - (42) (368)
Exchange differences in translation
of foreign operation - - 34
Impairment of available for sale
investments - - 100
Provisions 11 (475) 1,140 1,067
Investment income (14) (129) (134)
Current tax charge - (313) (168)
Movement in deferred tax asset (14) 450 (274)
Operating cash flows before movements
in working capital (442) 2,919 917
Decrease in receivables 506 2,430 2,436
Cash utilised in FOS settlements (3,569)
Increase/(decrease) in payables 277 5,166 (2,287)
Cash (utilised in operations)/generated
from operations (3,228) 10,515 1,066
Taxation paid - - -
Net cash (utilised in operations)/generated
from operations (3,228) 10,515 1,066
---------- ------------ --------------
Investing activities
Investment income 14 129 134
Disposal of a subsidiary, net of
cash disposed of - 239 (5,330)
Acquisitions of property, plant
and equipment (35) (28) (51)
Acquisitions of intangible assets (396) (407) (808)
Net cash used in investing activities (417) (67) (6,055)
---------- ------------ --------------
Financing activities
Dividends paid - - -
Net cash used in financing activities - - -
---------- ------------ --------------
Net (decrease)/increase in cash
and cash equivalents (3,645) 10,448 (4,989)
Cash and cash equivalents at beginning
of period 17,205 22,194 22,194
Cash and cash equivalents at end
of period 13,560 32,642 17,205
========== ============ ==============
London Capital Group Holdings plc
Notes to the condensed consolidated financial statements
For the period ended 30 June 2014 (unaudited)
1. General information
The condensed consolidated financial statements of London
Capital Group Holdings plc and its subsidiaries for the six months
ended 30 June 2014 were authorised for issue by the Board of
Directors on 27 August 2014. The information for the year ended 31
December 2013 does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. A copy of the statutory
accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not qualified
and did not contain statements under section 498(2) or (3) of the
Companies Act 2006.
2. Basis of preparation
The interim condensed consolidated financial statements for the
six months ended 30 June 2014 have been prepared using accounting
policies consistent with International Financial Reporting
Standards as adopted by the EU (IFRS) and in accordance with IAS 34
Interim Financial Reporting.
The same accounting policies, presentation and methods of
computation are followed in the condensed set of financial
statements as applied in the Group's latest audited financial
statements.
The directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report.
Accordingly, they continue to adopt the going concern basis for
preparing the financial statements.
3. Segment information
The Groups reportable segments are as follows:
-- Financial spread betting and contracts for difference (CFDs), UK; and
-- Institutional foreign exchange
Financial spread betting and contracts for difference segmental
revenues are generated from the net of the gains and losses on the
provision of the spread betting and CFD products, commission
income, exchange gains and interest. Institutional foreign exchange
segmental revenue is the commission income generated from the
clients FX trading.
Segments that were reportable in the prior year which are now
discontinued are as follows:
-- Contracts for difference, CFDs, Australia;
-- Financial spread betting, Gibraltar; and
-- Institutional brokerage
Unaudited 6 months to 30 June 2014
Financial spread betting and Institutional foreign exchange Total Group
CFD's, UK
GBP'000 GBP'000 GBP'000
Revenue
Segmental revenue 7,697 1,481 9,178
---------------------------------- ------------------------------- ------------
Segmental operating profit 1,945 285 2,230
---------------------------------- ------------------------------- ------------
Unallocated corporate expenses (2,693)
------------
Operating loss (463)
Finance income 14
------------
Loss before taxation (449)
Taxation 14
------------
Loss for the period (435)
============
Segmental assets 14,702 1,264 15,966
---------------------------------- ------------------------------- ------------
Unallocated corporate assets 15,768
------------
Consolidated total assets 31,734
Segmental liabilities 1,828 1,269 3,097
---------------------------------- ------------------------------- ------------
Unallocated corporate liabilities 1,122
------------
Consolidated total liabilities 4,219
============
Included within revenue is interest income earned on client
money held.
3. Segment information (continued)
Unaudited 6 months to 30 June 2013
Continuing Operations Discontinued Operations
Financial Institutional Total Institutional brokerage CFDs Financial Total Total
spread foreign Australia spread Group
betting exchange betting,
and CFDs, Gibraltar
UK
GBP'000 GBP'000 GBP'000 GBP'000 GBP000 GBP'000 GBP'000 GBP'000
Revenue
Segmental
revenue 13,159 2,089 15,248 1,010 169 713 1,892 17,140
---------- -------------- -------- ------------------------ ---------- ---------- -------- --------
Segmental
operating
profit 5,486 588 6,074 231 47 79 357 6,431
---------- -------------- -------- ------------------------ ---------- ---------- -------- --------
Unallocated
corporate
expenses (6,067)
--------
Operating
profit 364
Finance
income 129
--------
Profit before
taxation 493
Taxation (170)
--------
Profit for
the period 323
========
Segmental
assets 6,643 13,952 20,595 473 - 5,630 6,103 26,698
---------- -------------- -------- ------------------------ ---------- ---------- -------- --------
Unallocated
corporate
assets 26,583
--------
Consolidated
total assets 53,281
Segmental
liabilities 1,356 9,440 10,796 459 - 4,140 4,599 15,395
---------- -------------- -------- ------------------------ ---------- ---------- -------- --------
Unallocated
corporate
liabilities 6,008
--------
Consolidated
total
liabilities 21,403
========
Included within revenue is interest income earned on client
money held.
3. Segment information (continued)
Audited 12 months to 31 December 2013
Continuing Operations Discontinued Operations
Financial Institutional Total Institutional brokerage CFDs Financial Total Total
spread foreign Australia spread Group
betting exchange betting,
and CFDs, Gibraltar
UK
GBP'000 GBP'000 GBP'000 GBP'000 GBP000 GBP'000 GBP'000 GBP'000
Revenue
Segmental
revenue 20,844 4,345 25,189 1,492 169 1,099 2,760 27,949
---------- -------------- -------- ------------------------ ---------- ---------- -------- ---------
Segmental
operating
profit 9,806 1,340 11,146 373 45 (119) 299 11,445
---------- -------------- -------- ------------------------ ---------- ---------- -------- ---------
Unallocated
corporate
expenses (15,685)
---------
Operating
loss (4,240)
Finance
income 107
---------
Loss before
taxation (4,133)
Taxation
credit 410
---------
Loss for the
period (3,723)
=========
Segmental
assets 9,549 6,057 15,606 - - - - 15,606
---------- -------------- -------- ------------------------ ---------- ---------- -------- ---------
Unallocated
corporate
assets 20,321
---------
Consolidated
total assets 35,927
Segmental
liabilities 1,690 329 2,019 - - - - 2,019
---------- -------------- -------- ------------------------ ---------- ---------- -------- ---------
Unallocated
corporate
liabilities 5,969
---------
Consolidated
total
liabilities 7,988
=========
Included within revenue is interest income earned on client
money held.
4. Adjusted (loss)/profit before tax and adjusted EBITDA from continuing operations
Unaudited Unaudited Audited Year to 31 December
6 Months to 30 June 6 Months to 30 June 2013
2014 2013
GBP'000
GBP'000 GBP'000
Reported (loss)/profit before tax from
continuing operations (435) 94 (4,800)
Add back - (release)/charge for provision
against FOS claims (475) 1,140 1,067
Add back - legal fees in relation to FOS claims - - 263
Add back - legal fees in Integrity case - - 1,266
Add back - Integrity case settlement - - 350
Add back - restructuring costs - 692 854
Add back - accelerated depreciation of Ariel
platform - - 895
Add back - other costs of changing IT platform - 915 835
Add back - impairment of Sensatus investment - - 100
Add back - impairment of goodwill - - 1,353
Add back - share-based payment charge 11 30 13
Adjusted (loss)/profit before tax from
continuing operations (899) 2,871 2,196
Tax as reported 14 (137) 442
Tax effect of add backs 102 (645) (1,623)
----------- --------------------- ------------------------------
Adjusted (loss)/profit after tax from
continuing operations (783) 2,089 1,015
=========== ===================== ==============================
Reported operating (loss) before tax from
continuing operations (463) (35) (4,907)
Add back - share-based payment charge 11 30 13
----------- --------------------- ------------------------------
Adjusted operating (loss) before tax from
continuing operations (452) (5) (4,894)
Add back - amortisation and depreciation from
continuing operations 485 1,435 2,080
Add back - (release)/charge for provision
against FOS claims (475) 1,140 1,067
Add back - legal fees in relation to FOS claims - - 263
Add back - legal fees in Integrity case - - 1,266
Add back - Integrity case settlement - - 350
Add back - restructuring costs - 692 854
Add back - accelerated depreciation of Ariel
platform - - 895
Add back - other costs of changing IT platform - 915 835
Add back - impairment of Sensatus investment - - 100
Add back - impairment of ProSpreads goodwill - - 1,353
Adjusted EBITDA from continuing operations (442) 4,177 4,169
=========== ===================== ==============================
5. Earnings per ordinary share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period, after
deducting any own shares held. Fully diluted earnings per share is
calculated by dividing the earnings attributable to ordinary
shareholders by the total of the weighted average number of shares
in issue during the period and the dilutive potential ordinary
shares relating to share options. Dilutive potential ordinary
shares were nil (2013:nil)
From continuing and discontinued operations
The calculation of the basic and diluted earnings per share is
based on the following data:
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 30 June to 30 June 31 December
2014 2013 2013
From continuing and discontinued
operations
Basic EPS
(Loss)/profit after tax (GBP'000) (435) 323 (3,723)
Weighted average number of shares 52,365,908 52,365,908 52,365,908
Weighted average basic EPS (pence) (0.83) 0.62 (7.11)
Diluted EPS
(Loss)/profit after tax (GBP'000) (435) 323 (3,723)
Weighted average number of shares 52,365,908 52,516,828 52,365,908
Weighted average fully diluted
EPS (pence) (0.83) 0.62 (7.11)
Adjusted basic EPS
Adjusted (loss)/profit after
tax (GBP'000) (783) 2,431 3,273
Weighted average number of shares 52,365,908 52,365,908 52,365,908
Weighted average basic EPS (pence) (1.50) 4.64 6.25
From continuing operations
Basic EPS
Loss after tax (GBP'000) (435) (43) (4,358)
Weighted average number of shares 52,365,908 52,365,908 52,365,908
Weighted average basic EPS (0.83) (0.08) (8.32)
Diluted EPS
Loss after tax (GBP'000) (435) (43) (4,358)
Weighted average number of shares 52,365,908 52,516,828 52,365,908
Weighted average fully diluted EPS (0.83) (0.08) (8.32)
Adjusted basic EPS
Adjusted profit after tax (see note
4) (GBP'000) (783) 2,089 1,015
Weighted average number of shares 52,365,908 52,365,908 52,365,908
Weighted average basic EPS (1.50) 3.99 1.94
5. Earnings per ordinary share (continued)
Unaudited Unaudited Audited
6 Months to 6 Months Year to
30 June to 30 June 31 December
2014 2013 2013
From discontinued operations
Basic EPS
Profit after tax (GBP'000) - 366 635
Weighted average number of
shares 52,365,908 52,365,908 52,365,908
Weighted average basic EPS - 0.70 1.21
Diluted EPS
Profit after tax (GBP'000) - 366 635
Weighted average number of
shares 52,365,908 52,516,828 52,365,908
Weighted average fully diluted
EPS - 0.70 1.21
Adjusted basic EPS
Adjusted profit after tax (GBP'000) - 366 635
Weighted average number of
shares 52,365,908 52,365,908 52,365,908
Weighted average basic EPS - 0.70 1.21
6. Dividends
No dividends were declared or paid in the period (H1'13:nil)
7. Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December 2013
2014 2013
GBP'000
GBP'000 GBP'000
Trade receivables 112 524 212
Amounts due from brokers 4,172 2,481 4,607
Other receivables 347 491 953
Prepayments 1,597 942 963
6,228 4,438 6,735
---------- ---------- ------------------
The Directors consider that the carrying amount of the trade
receivables, amounts owed to group undertakings and other
receivables approximates to their fair value due to their short
term maturity.
Amounts due from brokers represents the combination of open
derivative positions and cash held at brokers.
8. Cash and cash equivalents
Unaudited Unaudited Audited
30 June 30 June 31 December 2013
2014 2013
GBP'000
GBP'000 GBP'000
Gross cash and cash equivalents 39,384 56,980 43,715
Less: Segregated client funds (25,824) (27,683) (26,510)
---------- ---------- ------------------
Own cash and title transfer funds 13,560 29,297 17,205
Analysed as:
Cash at bank and in hand 13,560 23,297 17,205
Short-term deposits - 6,000 -
---------- ---------- ------------------
13,560 29,297 17,205
---------- ---------- ------------------
Gross cash and cash equivalents include Group cash and all
client funds (segregated funds and funds under collateral title
transfer).
Segregated client funds include client funds held in segregated
accounts or breakable short term deposits (less than 3 months) in
line with the FCA's Client Asset Rules ('CASS').
Title transfer funds are held under a Title Transfer Collateral
Arrangement ('TTCA') by which the client agrees that full ownership
of such monies is unconditionally transferred to the Group. Funds
under TTCA are included on the balance sheet.
9. Trade payables and amounts due to clients
Unaudited Unaudited Audited
30 June 30 June 31 December 2013
2014 2013
GBP'000
GBP'000 GBP'000
Trade payables 1,584 556 1,362
Amounts due to clients:
- 9,297 -
* Institutional FX clients
* Institutional FX clients under TTCA 1,205 - 329
2,789 9,853 1,691
---------- ---------- ------------------
10. Other payables
Unaudited Unaudited Audited
30 June 30 June 31 December 2013
2014 2013
GBP'000
GBP'000 GBP'000
Commission payments due 3 483 164
Other creditors 11 - -
Other taxes and social security 163 201 180
Accruals 645 2,001 1,301
822 2,685 1,645
---------- ---------- ------------------
11. Provisions and contingent liabilities
Unaudited Unaudited Audited
30 June 30 June 31 December 2013
2014 2013
GBP'000
GBP'000 GBP'000
Provision against FOS claims 608 4,725 4,652
---------- ---------- ------------------
Provision against FOS claims Contingency against FOS claims
GBP'000 GBP'000
At 1 January 2014 4,652 883
Utilisation (3,569) -
Release (301) (10)
Transfer from provision to contingency (174) 174
At 30 June 2014 608 1,047
----------------------------- -------------------------------
During the first half of 2009 the Group made commission rebating
errors whilst preparing the customer statements of a managed FX
fund. The correction of these errors led to a series of complaints
to the Financial Ombudsman Service ("FOS"). Whilst the Group
believes its actions did not directly cause any loss to the
clients, the Ombudsman issued a final decision upholding the
complaints in 2013 and ordered the Group to repay all losses
incurred by the clients plus interest.
At June 2014 all eligible claimants have been repaid their
losses plus interest in accordance with the Ombudsman's directions
resulting in a utilisation of the provision in the period of
GBP3.6m. The provision release of GBP0.3m is a combination of
claims rejected by the FOS and claims settled more quickly than
expected, therefore accruing less interest than anticipated. The
movement between the provision and contingent liability of GBP0.17m
represents the update to the Directors' best estimate of the level
of possible future claimants.
Whilst the Directors are confident that the provision and
contingent liability represent the best estimate of the expected
liability as at the balance sheet date, there remains a degree of
uncertainty as to the number of claimants to be paid.
12. Related party transactions
Balances and transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note.
In 2013 and H1 2014 no trading transactions were entered into
with related parties who were not members of the Group.
The following loan amounts were outstanding at the balance sheet
date:
Amounts owed by related parties
Unaudited Unaudited Audited
30 June 30 June 31 December 2013
2014 2013
GBP'000
GBP'000 GBP'000
Sensatus UK 47 62 57
The Group holds a GBP100,000 investment in Sensatus UK Limited,
the current provider of London Capital Group Limited's on-line
charts. To oversee this investment Simon Denham was appointed a
Director of Sensatus UK Limited on 3 May 2012. Simon Denham
resigned from the Group with effect from 05 February 2013 at which
point Sensatus ceased to be a related party to the Group. The
Directors' best estimate of the fair value of this investment is
nil.
The amounts outstanding are unsecured and will be settled in
cash. No guarantees have been given or received. Amounts repayable
to the Company carry an interest rate of 7 per cent per annum
charged on the outstanding loan balance. The amount of the loan
outstanding has been fully provided for.
13. Events after balance sheet date
On 3 July 2014 a resolution was passed at a general meeting of
shareholders to approve a proposed Investment in the Group by GLIO
Holdings Limited and possibly existing shareholders of up to
GBP17.5m, through an increase in the authority for directors to
allot shares and the disapplication of pre-emption rights.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DQLFLZVFLBBZ
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