TIDMLCG
RNS Number : 0281A
London Capital Group Holdings PLC
24 September 2015
LONDON CAPITAL GROUP HOLDINGS PLC
("LCG", "LCGH", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2015
London Capital Group Holdings plc today announces interim
results for the six months ended 30 June 2015.
Operating Summary
-- Since the arrival of the new management team in October 2014
there has been a substantial restructuring of the entire business
which has now been largely completed ahead of schedule and on
budget
-- Adjusted loss before tax** from continuing operations of
GBP9.9 million (H1'14 loss: GBP0.9 million)
-- Loss before tax from continuing operations of GBP8.6 million
(H1'14 loss: GBP0.4 million)
-- EBITDA loss before certain one-off items from continuing
operations for period from October 2014 when new management was
appointed of GBP2 million*
-- Revenue from continuing operations down 42% to GBP5.3 million
(H1'14: GBP9.2 million)
-- Net cash and short term receivables, excluding amounts due to
clients increased 38% to GBP22.9 million (H1'14: GBP16.5
million)
-- Introduction of new technologies substantially completed
-- Cost base stabilised
-- Marketing plans and spend are ready for the implementation of
our new technologies
* Certain one-off items include the Swiss Franc event
(previously disclosed), additional administrative costs and IT
spend.
Operational Highlights
-- UK FSB and CFD performance
- Divisional revenue down 33.4% to GBP5.1 million (H1'14: GBP7.7
million); divisional loss of GBP1.1 million (H1'14: profit GBP1.9
million)
- Key performance indicators
KPI average/month H1'14 to H2'14 H2'14 to H1'15
Trades 9.7% 32%
Active traders -12.6% 12%
Clients funds -2.3% 17%
Volume indices 19% 9%
Volume forex -14.3% 88%
-- Institutional foreign exchange
- In early 2015, the institutional foreign exchange business was rationalised resulting in a
reduction in the number of customers.
Commenting on the results, Charles-Henri Sabet, 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 developing exciting new technology,
a full rebranding, initiating a new client journey as well as
optimising our internal processes in order to facilitate client
acquisition. We have also focused on rationalising the fixed cost
base. Due to the positive direction shown in our key performance
indicators, we are confident in our strategy during this
transitional and challenging period.
Since the arrival of the new management team in October 2014,
the Group has recognised an EBITDA loss of GBP5.4 million. This is
a result of: decreased revenues due to lower market volatility; an
exceptional GBP1.7 million loss incurred as a result of the
movement in the Swiss Franc; and additional administrative costs of
GBP1.7 million mainly due to staff turnover, contracting fees and
increased IT spend. The EBITDA loss excluding the impact of the
Swiss Franc event and additional administrative costs relating to
staff turnover and IT would have been GBP2.0 million.
Our limited client growth in this period has been due to a core
focus on our relaunch and a strategic decision to limit marketing
of the current brand. We plan on launching our new product in the
coming months with a full scale marketing drive and significant
coverage.
The Group is confident that with the development of our new
advanced technology, a renewed commitment to hiring the industry's
most talented people and a big increase in marketing driving our
rebrand, the majority of the short-term strategy will be achieved
in the second half of the year."
Unaudited Unaudited
Six months ended Six months ended
30 June 2015 30 June 2014
GBP'000 GBP'000
Total revenue from continuing operations 5,320 9,178
Adjusted loss before tax* from continuing operations (9,858) (899)
Statutory loss before tax from continuing operations (8,592) (435)
Basic earnings per share from continuing operations (14.26) (0.83)
Diluted earnings per share from continuing operations (14.26) (0.83)
** Adjusted loss before tax represents loss before tax excluding
share based payment expense and the movement in the provision for
FOS claims and restructuring costs. Applied consistently
hereafter.
For further information, please contact: www.londoncapitalgroup.com
London Capital Group Holdings plc 020 7456 7000
Charles-Henri Sabet, Chief Executive
Officer
Cenkos Securities plc
Nicholas Wells 020 7397 8900
Chairman's statement
For the period ended 30 June 2015, the Group has continued to
invest heavily in innovation, IT, sales and marketing and the
quality of its people. This journey began in the fourth quarter of
2014 and the Group's costs are in line with the Board's
expectations for this period. Revenue has been heavily affected as
a result of lower market volatility during the first half of the
year and was further impacted by the Swiss Franc event in early
January 2015. We are confident that the Group is geared to return
to steady growth with investments currently taking place that we
believe will position the Group as a leading provider of online
trading services.
The review undertaken by management encompassed a focus on the
markets, products, platforms, operational structures and key
personnel. This was necessary to deliver the growth expected by our
shareholders. Many of the legacy problems relating to the business
have now been addressed and the Group is now entering a new phase
with the expectation of a return to growth and the delivery of
long-term, sustainable returns to shareholders.
In addition, the majority of the organisational restructuring
which was expected to last until the end of 2016 has already been
completed. Over the last six months, a key focus has been to ensure
that the Group has the right talent and skill sets in place to
drive the Group forward. Achieving this has resulted in significant
staff turnover during the first six months as well as a substantial
spend in recruitment and contractor fees.
In line with the development of the workforce, the Group's IT
department and infrastructure have been restructured with
significant investment in this area ensuring better access to
financial markets and best-in-class technology. We will continue
our efforts with a major rebranding exercise, which will help
position the Group as a leading provider of online trading
services. In addition, we have put in place the building blocks to
take advantage of opportunities globally, which will complement our
core domestic business in the UK.
We shall continue to invest in our products and services, brand
repositioning and improved trading technologies in order to drive
the Group's return to growth. We are confident in management's
ability to execute our strategic vision.
Charles Poncet
Chairman
Chief Executive's Statement
As previously reported LCG has suffered from a lack of
investment in innovation, sales and marketing over the past few
years. Significant financial resources were required to drive the
longer-term growth of the Company. The convertible loan note
financing has allowed the business to address these issues. Our
investment in innovation, IT, sales and marketing and people began
in the fourth quarter of 2014 and has continued during the first
six months of 2015.
Financial Results
The first half of the year has once again been a difficult
trading period, with market conditions not particularly conducive
to the style of trading favoured by our retail derivative clients
as a result of a range market. In addition, during the first half
of the year, the Group suffered a loss from market and credit
exposure following the announcement on the 15 January 2015 by the
Swiss National Bank which resulted in extreme movement in the value
of the Swiss Franc and a sudden reduced liquidity in the Swiss
Franc foreign exchange market. The loss attributable to this event
was GBP1.7 million. A conversion of convertible loan notes also
took place in January 2015 which led to an accelerated interest
charge of GBP1.2 million for the period. Additional costs were also
incurred as a result of staff turnover, contracting fees and
increased IT spend. All of this has led to a loss before tax for
the period of GBP8.6 million (H1'14 loss: GBP0.4 million).
Total revenue for the Group amounted to GBP5.3 million (H1'14:
GBP9.2 million), a decline of 61% on H2'14 and 42% on H1'14.
Administrative costs from continuing operations have increased by
45% on H1'14 as a result of the continuing investment described
above.
The adjusted loss before tax was GBP9.9 million, compared to a
profit of GBP1.1 million for H2'14 and a loss of GBP0.9 million for
H1'14. Adjusted profit before tax is stated before recognising a
small charge in relation to share based payments, a credit relating
to the Financial Ombudsman Service ("FOS") claims provision of
GBP0.5 million and a credit for restructuring costs of GBP0.9
million.
UK Financial Spread betting and CFDs
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 02:00 ET (06:00 GMT)
Revenue derived from the UK Financial Spread betting and CFD
business was GBP5.1 million (H1'14: GBP7.7 million). The division
has experienced a difficult trading period; however, underlying
trading statistics have been improving. Average trades per month
have increased by 44% compared to the same period in 2014 and
average monthly unique active users have been stable over the
period. Average monthly funds on deposit from the UK Financial
Spread betting and CFD business increased by 16.5% from H2'14.
FX
In early 2015, the institutional foreign exchange business was
rationalised resulting in a reduction in the number of
customers.
Available liquidity and cash flow
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Own cash held 13,180 12,355 24,695
Short term receivables: Amounts
due from brokers 9,697 4,172 6,149
---------- ---------- -------------
Net cash and short term receivables 22,877 16,527 30,844
---------- ---------- -------------
Title transfer funds and unsegregated
funds - 1,205 2,098
---------- ---------- -------------
Available liquid resources 22,877 17,732 32,942
---------- ---------- -------------
The net cash and short term receivables, increased 38% to
GBP22.9 million (H1'14: GBP16.5 million) primarily as a result of
the convertible loan note financing. Available liquidity which
comprises own cash held, title transfer funds, unsegregated funds
and amounts due from brokers decreased by GBP10.1 million from 31
December 2014.
Strategy
The Group's future success will be based on providing a high
quality service to our customers and offering a variety of
financial trading products and platforms. We will deliver a
complete multi-asset experience for our clients.
Our increased investment in technology will allow us to offer an
intelligent new platform while still delivering industry leading
spreads with instant, reliable execution. In addition, our analysts
will offer high quality analysis, research and financial news.
We will shortly unveil our new mobile trading apps, allowing
clients to trade on every device and have worked hard to deliver
what we believe is the most integrated charting package in the
industry.
The Group's medium-term strategy will also continue to focus on
the promotion and further development of our key unique selling
points upon the completion of the Group's near-term objectives:
- Industry-leading platforms
The Group will offer improved technology and trading platforms
on web, desktop, mobile and API ensuring our offering fits in with
the demands of the active trader.
- Service
The Group will provide an industry-leading customer experience
and a service tailored to individual customers' needs, both online
and through our telephone, email and 'live-chat' channels.
- Professional tools and news service
Targeted to our customers' needs, the Group's experienced
in-house market analysts will keep clients up-to-date with market
events, as well as offering access to professional third-party news
and tools providers.
- Educational material
The Group will create significantly enhanced education services
to address all levels of trading experience, including face-to-face
seminars and live market webinars from our team of market
analysts.
- Pricing
The Group will deliver a value proposition to our clients
without any compromise of our strict adherence to quality products,
platforms and service, in order to position the Group at the
forefront of the industry's most competitive providers.
- Marketing
The Group is focusing its brand and client proposition primarily
through the trusted LCG name, consolidating our online presence
into a single LCG-led offering which incorporates all of the
Group's products and services. A consolidated focus on a single
brand will provide greater clarity for the Group's clients while
enabling optimisation of marketing spend.
- Dealing execution
The Group aims to provide a best-in-class dealing experience for
clients across a broad range of markets and via multiple platform
offerings. Clients will benefit from the Group's transparent and
competitive dealing and execution services, for example through our
liquidity providers, and the execution model on the MetaTrader4
platform.
Our marketing is being aimed at attracting active retail
traders. This combined with improving the customer journey and
technology will ensure that the Group continues to be in a strong
strategic position.
Outlook
The Board is confident that with this significant investment in
innovation, talented people, IT, sales and marketing that the Group
has previously lacked, the business can now move confidently
forward towards a profitable period of growth. This growth will be
fully scalable which will allow the Group to start growing
abroad.
Charles-Henri Sabet
Chief Executive
London Capital Group Holdings plc
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 30 June 2015
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 30 to 30 31 December
June 2015 June 2014 2014
Notes GBP'000 GBP'000 GBP'000
Revenue 3 5,320 9,178 22,666
Cost of sales (2,288) (2,798) (5,976)
----------- ----------- ---------------
Gross profit 3,032 6,380 16,690
Administrative expenses (before
certain items)
Certain items: (11,192) (7,307) (15,506)
Credit for provision against FOS
claims 11 489 475 578
Impairment of goodwill - - (7,950)
Credit/(charge) for restructuring
costs 900 - (1,528)
Costs related to change in IT platform - - (262)
including accelerated amortisation
Share-based payment credit/(charge) (123) (11) 63
---------------------------------------- ------ ----------- ----------- ---------------
Total administrative expenses (9,926) (6,843) (24,605)
Operating (loss) (6,894) (463) (7,915)
Investment revenue 58 14 201
Finance costs (1,756) - (240)
(Loss) before taxation (8,592) (449) (7,954)
Tax credit 1,303 14 153
(Loss) for the period (7,289) (435) (7,801)
Earnings per share (pence)
Pence Pence Pence
Basic 5 (14.26) (0.83) (15.13)
Diluted 5 (14.26) (0.83) (11.13)
Adjusted basic 5 (16.20) (1.50) 2.04
London Capital Group Holdings plc
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June 2015
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 30 June to 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
(Loss) for the period (7,289) (435) (7,801)
------------ ------------ -------------
Total comprehensive (loss) for
the period (7,289) (435) (7,801)
------------ ------------ -------------
Total comprehensive (loss) for
the period attributable to the
owners of the parent (7,289) (435) (7,801)
============ ============ =============
London Capital Group Holdings plc
CONDENSED CONSOLIDATED BALANCE SHEET
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 02:00 ET (06:00 GMT)
As at 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Notes GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Intangible assets 1,281 9,446 1,145
Property, plant and equipment 2,448 1,682 2,176
Deferred tax asset 1,736 348 435
5,465 11,476 3,756
------------ ------------ --------------
CURRENT ASSETS
Trade and other receivables 7 13,656 6,228 8,975
Current tax receivables - 470 164
Cash and cash equivalents 8 13,180 13,560 26,793
26,836 20,258 35,932
------------ ------------ --------------
TOTAL ASSETS 32,301 31,734 39,688
------------ ------------ --------------
CURRENT LIABILITIES
Trade and other payables 9,10 4,522 3,611 4,463
Provisions 11 379 608 1,986
Obligations under finance leases 28 - 47
TOTAL CURRENT LIABILITIES 4,929 4,219 6,496
------------ ------------ --------------
NET CURRENT ASSETS 21,907 16,039 29,436
------------ ------------ --------------
NON-CURRENT LIABILITIES
Convertible loan notes 12 10,905 - 14,406
Obligations under finance leases 98 - 203
11,003 - 14,609
TOTAL LIABILITIES 15,932 4,219 21,105
NET ASSETS 16,369 27,515 18,583
============ ============ ==============
EQUITY
Share capital 7,559 5,580 5,580
Share premium 23,565 20,592 20,592
Own shares held (6,065) (2,569) (6,065)
Equity reserve 2,004 - 2,004
Retained earnings (5,350) 9,256 1,816
Other reserves (5,344) (5,344) (5,344)
TOTAL EQUITY 16,369 27,515 18,583
============ ============ ==============
London Capital Group Holdings plc
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 June 2015
Own shares
Share Share held Equity Retained Other Total
capital premium reserve earnings reserves equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
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
Own shares
acquired in
the period - - (3,496) - - - (3,496)
Total
comprehensive
loss for the
period - - - - (7,366) - (7,366)
Share based
payment
transactions - - - - (74) - (74)
Equity
component of
convertible
loan notes - - - 2,004 - - 2,004
At 1 January
2015 5,580 20,592 (6,065) 2,004 1,816 (5,344) 18,583
Issue of share
capital 1,979 2,973 - - - - 4,952
Total
comprehensive
loss for the
period - - - - (7,289) - (7,289)
Share based
payment
transactions - - - - 123 - 123
At 30 June
2015 7,559 23,565 (6,065) 2,004 (5,350) (5,344) 16,369
============= ============= ============ ============= ============ ============= =============
London Capital Group Holdings plc
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the period ended 30 June 2015
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 30 to 30 31 December
June 2015 June 2014 2014
GBP'000 GBP'000 GBP'000
Loss for the financial period (7,289) (435) (7,801)
Adjustments for:
Depreciation of property, plant
and equipment 262 198 435
Amortisation of intangible assets 323 287 641
Write off of goodwill - - 7,950
Share based payments 123 11 (63)
Provisions 11 (1,389) (475) 902
Loss on disposal of property, plant
and equipment 39 - -
Investment income (58) (14) (201)
Finance costs 1,756 - 240
Current tax charge - - (54)
Movement in deferred tax asset (1,303) (14) (99)
Operating cash flows before movements
in working capital (7,536) (442) 1,950
(Increase)/decrease in receivables (4,875) 506 (2,240)
(Decrease) in payables (543) (3,292) (2,130)
Cash (used in) operating activities (12,954) (3,228) (2,420)
Taxation received 193 - 360
Net cash (used in) operations (12,761) (3,228) (2,060)
------------ ------------ --------------
Investing activities
Investment income 58 14 201
Finance costs (6) - (240)
Proceeds on disposal of property,
plant and equipment 90 - -
Acquisitions of property, plant
and equipment (534) (35) (767)
Acquisitions of intangible assets (460) (396) (399)
Net cash used in investing activities (852) (417) (1,205)
------------ ------------ --------------
Financing activities
Net proceeds in issue of convertible
loan note - - 16,349
Cash used in the repurchase of shares - - (3,496)
------------ ------------ --------------
Net cash provided by financing activities - - 12,853
------------ ------------ --------------
Net (decrease)/increase in cash
and cash equivalents (13,613) (3,645) 9,588
Cash and cash equivalents at beginning
of period 26,793 17,205 17,205
Cash and cash equivalents at end
of period 13,180 13,560 26,793
============ ============ ==============
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 02:00 ET (06:00 GMT)
London Capital Group Holdings plc
Notes to the condensed consolidated financial statements
For the period ended 30 June 2015 (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 2015 were authorised for issue by the Board of
Directors on 22 September 2015. The information for the year ended
31 December 2014 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 2015 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. Following the year-end the institutional forex
business was rationalised resulting in a reduction in the number of
customers.
3. Segment information (continued)
Unaudited 6 months to 30 June 2015
Financial spread
betting and CFDs, Institutional
UK foreign exchange Total
GBP'000 GBP'000 GBP'000
Revenue
Segmental revenue 5,125 195 5,320
------------------- ------------------- --------
Segmental operating
loss (1,100) (609) (1,709)
------------------- ------------------- --------
Unallocated corporate
expenses (5,185)
--------
Operating loss (6,894)
Finance income 58
Finance costs (1,756)
--------
Loss before taxation (8,592)
Taxation 1,303
--------
Loss for the period (7,289)
========
Segmental assets 1,868 7,601 9,469
------------------- ------------------- --------
Unallocated corporate
assets 22,832
--------
Consolidated total
assets 32,301
Segmental liabilities 2,357 - 2,357
------------------- ------------------- --------
Unallocated corporate
liabilities 2,572
--------
Consolidated total
liabilities 4,929
--------
Included within revenue is interest income earned on client
money held.
3. Segment information (continued)
Unaudited 6 months to 30 June 2014
Financial spread
betting and CFDs, Institutional
UK foreign exchange Total
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)
Audited 12 months to 31 December 2014
Financial spread
betting and CFDs, Institutional
UK foreign exchange Total
GBP'000 GBP'000 GBP'000
Revenue
Segmental revenue 19,429 3,237 22,666
------------------- ------------------- ---------
Segmental operating
profit 8,753 1,104 9,857
------------------- ------------------- ---------
Unallocated corporate
expenses (17,772)
---------
Operating loss (7,915)
Finance income 201
Finance Costs (240)
---------
Loss before taxation (7,954)
Taxation credit 153
---------
Loss for the year (7,801)
=========
Segmental assets 1,655 7,359 9,014
------------------- ------------------- ---------
Unallocated corporate
assets 30,674
---------
Consolidated total
assets 39,688
Segmental liabilities 1,309 2,098 3,407
------------------- ------------------- ---------
Unallocated corporate
liabilities 3,090
---------
Consolidated total
liabilities 6,497
---------
Included within revenue is interest income earned on client
money held.
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 02:00 ET (06:00 GMT)
4. Adjusted (loss)/profit before tax, adjusted operating
(loss)/profit and adjusted EBITDA from continuing operations
Unaudited Unaudited Audited Year to 31 December 2014
6 Months to 30 June 6 Months to 30 June
2015 2014 GBP'000
GBP'000 GBP'000
Reported (loss) before tax from
continuing operations (8,592) (435) (7,954)
Add back - (credit)for provision
against FOS claims (489) (475) (578)
Add back - (credit)/charge for
restructuring costs (900) - 1,528
Add back - other costs of changing
IT platform - - 262
Add back - impairment of goodwill - - 7,950
Add back - (credit)/charge for
share-based payment charge 123 11 (63)
Adjusted (loss)/profit before tax
from continuing operations (9,858) (899) 1,145
Tax as reported 1,303 14 153
Tax effect of add backs 272 102 (247)
--------------------- --------------------- ---------------------------------
Adjusted (loss)/profit after tax
from continuing operations (8,283) (783) 1,051
===================== ===================== =================================
Reported operating (loss) before tax
from continuing operations (6,894) (463) (7,915)
Add back - (credit)/charge for
share-based payment charge 123 11 (63)
--------------------- --------------------- ---------------------------------
Adjusted operating (loss) before tax
from continuing operations (6,771) (452) (7,978)
Add back - amortisation and
depreciation from continuing
operations 585 485 1,076
Add back - (credit)/charge for
provision against FOS claims (489) (475) (578)
Add back - (credit)/charge for
restructuring costs (900) - 1,528
Add back - other costs of changing
IT platform - - 262
Add back - impairment of goodwill - - 7,950
Adjusted EBITDA from continuing
operations (7,575) (442) 2,260
===================== ===================== =================================
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 and the convertible loan
notes.
5. Earnings per ordinary share (continued)
From continuing 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
2015 2014 2014
Basic EPS
(Loss) after tax (GBP'000) (7,289) (435) (7,801)
Weighted average number of shares 51,119,804 52,365,908 51,537,429
Weighted average basic EPS (pence) (14.26) (0.83) (15.13)
Diluted EPS
(Loss) after tax (GBP'000) (7,289) (435) (7,801)
Weighted average number of shares 125,248,630 52,365,908 70,086,552
Weighted average fully diluted
EPS (pence) (14.26) (0.83) (11.13)
Adjusted basic EPS
Adjusted (loss)/profit after
tax (see note 4) (GBP'000) (8,283) (783) 1,053
Weighted average number of shares 51,119,804 52,365,908 51,537,429
Weighted average basic EPS (pence) (16.20) (1.50) 2.04
The diluted EPS excludes 74,128,826 in shares as this decreases
the loss per share and thus these are anti-dilutive.
6. Dividends
No dividends were declared or paid in the period (H1'14:
nil)
7. Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December 2014
2015 2014
GBP'000
GBP'000 GBP'000
Trade receivables 783 112 122
Allowance for doubtful debts (560) - (20)
---------- ---------- ------------------
223 112 102
---------- ---------- ------------------
Amounts due from brokers 9,697 4,172 6,149
Other receivables 260 347 263
Prepayments 3,476 1,597 2,461
13,656 6,228 8,975
---------- ---------- ------------------
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 2014
2015 2014
GBP'000
GBP'000 GBP'000
Gross cash and cash equivalents 40,175 39,384 54,640
Less: Segregated client funds (26,995) (25,824) (27,847)
---------- ---------- ------------------
Own cash and title transfer funds 13,180 13,560 26,793
Analysed as:
Cash at bank and in hand 13,180 13,560 26,793
13,180 13,560 26,793
---------- ---------- ------------------
Gross cash and cash equivalents include Group cash and all
client funds (segregated funds and funds under collateral title
transfer).
Own cash and title transfer funds include client money 'buffer'
of GBP195,118 as well as restricted funds of GBP538,006 of funds
held in a restricted account at Natwest for the benefit of a
guarantee for the lease that was signed on 1 Knightsbridge on 2
June 2015.
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 by the Group's subsidiary 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
Unaudited Unaudited Audited
30 June 30 June 31 December 2014
2015 2014
GBP'000
GBP'000 GBP'000
Trade payables 2,357 1,584 1,308
Amounts due to clients:
* Institutional FX clients under TTCA - 1,205 2,098
2,357 2,789 3,406
---------- ---------- ------------------
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 02:00 ET (06:00 GMT)
10. Other payables
Unaudited Unaudited Audited
30 June 30 June 31 December 2014
2015 2014
GBP'000
GBP'000 GBP'000
Commission payments due - 3 -
Other creditors 45 11 -
Other taxes and social security 219 163 186
Accruals 1,901 645 871
2,165 822 1,057
---------- ---------- ------------------
11. Provisions and contingent liabilities
Unaudited 30 June 2015 Unaudited 30 June 2014 Audited 31 December 2014
GBP'000 GBP'000 GBP'000
Restructuring provision - - 1,102
Provision against FOS claims - 608 505
Market data provision 379 - 379
379 608 1,986
----------------------- ----------------------- -------------------------
Restructuring provision
During 2014 the Group carried out extensive restructuring to
ensure that the business had the correct skill set to enable it to
expand in line with senior management's expectations. This resulted
in a provision of GBP1.1 million being carried at the year end to
cover redundancy and other associated costs of the restructure.
During the period ended 30 June 2015, GBP0.9 million was released
as circumstances regarding the provision have changed and GBP0.2
million was paid.
Provision & contingent liability against FOS claims
Provision against FOS claims Contingency against FOS claims
GBP'000 GBP'000
At 1 January 2015 505 1,142
Utilisation (16) -
Release (489) (1,142)
At 30 June 2015 - -
----------------------------- -------------------------------
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.
During the period ended June 2015 one final eligible claimant
had been repaid, resulting in an utilisation of the provision in
the period of GBP16k. The provision of GBP489k and contingent
liability of GBP1.1 million release is due to claims not being made
within the time limit prescribed by United Kingdom legislation.
Market Data Provision
During 2014 a number of exchanges used by the Group have been
conducting audits in relation to data usage and redistribution. The
provision of GBP379k is the Group's best estimate of the liability
in relation to these open audits from the relevant exchanges and
remains the same as at 31 December 2014 as circumstances have not
changed.
12. Convertible loan notes
On 16 October 2014, the Company raised GBP17 million (before
expenses) through the issue of 67,945,644 convertible loan notes,
to GLIO Holdings Limited ("GLIO"), HSBC Global Custody Nominee (UK)
Limited, on behalf of Hargreave Hale Limited, and JIM Nominees
Limited, on behalf of Mr Tyler Rameson, at a conversion price of
25.02p. The proceeds (net of transaction costs) of the financing
are GBP16.35 million. The conversion price was at a 15.9% discount
to the share price of the ordinary shares at the date the
convertible loan notes were issued.
Any notes that have not been converted will be redeemed at par
on 16 October 2021. Interest of 5 per cent will be paid in the form
of shares where the notes are converted up until that settlement
date.
The net proceeds received from the issue of the convertible loan
notes have been split between the financial liability element and
an equity component, representing the fair value of the embedded
option to convert the financial liability into equity of the
Company, as follows:
Unaudited 30 June Unaudited 30 June Audited
2015 2014 31 December 2014
GBP'000 GBP'000 GBP'000
Proceeds of issue of convertible loans
notes (net of transaction costs) - - 16,349
Equity component - - (2,004)
------------ ----------------- ----------------- -----------------
Liability component at date of issue - - 14,345
Interest charged (effective) - - 236
Interest accrued - - (175)
----------------- ----------------- -----------------
Liability component at 31 December 2014 - - 14,406
Liability component at 01 January 2015 14,406
Reduction in principal amount due to
conversion of convertible loans (3,668) - -
Interest charge (effective) 513 - -
Interest accrued (346) - -
----------------- ----------------- -----------------
Liability component at 30 June 2015 10,905 - -
================= ================= =================
The interest expensed is calculated by applying an effective
interest rate of 8 per cent to the liability component of the notes
from date of issue on 16 October 2014 to year end. The liability
component is measured at amortised cost. The difference between the
carrying amount of the liability component at the date of issue and
the amount reported in the balance sheet at 30 June 2015 and 31
December 2014 represents the effective interest rate less the
interest paid to that date.
In accordance with the terms of the convertible loan notes, as
further described in the circular to Shareholders dated 17 June
2014 (the "Circular"), those investors issued with the convertible
loan notes have also been granted warrants and shall be entitled,
upon the exercise of their convertible loan notes, to be issued
ordinary shares (in satisfaction of the Minimum Interest Return, as
defined in the Circular), as shown in the table below:
Convertible Ordinary Shares to be issued Warrants
loan in
notes issued satisfaction of the Minimum issued
Interest
Return (assuming no tax
deductions)
GLIO Holdings Limited 59,952,038 20,983,213 80,935,251
Hargreave Hale 3,996,803 1,398,881 5,395,683
Mr Tyler Rameson 3,996,803 1,398,881 5,395,683
12. Convertible loan notes (continued)
The warrants issued to GLIO may be exercised in full or in part
in minimum tranches of 5,000,000 and the warrants issued to
Hargreave Hale and Mr Tyler Rameson may be exercised in full or in
part in minimum tranches of 1,000,000 at any time upon 10 business
days' notice up and until the maturity date, being 7 years from the
date of issue, provided that the equivalent number of convertible
loan notes have been converted.
In January 2015, a total of principal of 3,668,000 of the
convertible loan notes were converted to shares.
13. 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.
Trading Transactions
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 02:00 ET (06:00 GMT)
London Capital Hldgs (LSE:LCG)
Historical Stock Chart
From May 2024 to Jun 2024
London Capital Hldgs (LSE:LCG)
Historical Stock Chart
From Jun 2023 to Jun 2024
