Octagonal PLC Trading Update for Trading Subsidiary (5540M)
May 12 2020 - 2:00AM
UK Regulatory
TIDMOCT
RNS Number : 5540M
Octagonal PLC
12 May 2020
For immediate release
12 May 2020
Octagonal plc
("Octagonal" or the "Company")
Trading Update for Trading Subsidiary
Following completion of the reporting period to 31 March 2020,
Octagonal provides the following trading update for its principal
and wholly owned trading subsidiary - Global Investment Strategy UK
Limited ("GIS").
The Board is pleased to announce that GIS expects to report
EBITDA of GBP1.65million, on sales of GBP5.8 million for the year
ended 31 March 2020. Although this is a 6.8% decrease in profits
(2019: GBP1.77 million) and 7.4% increase in sales (2019: GBP5.4
million) from the previous year, these results reflect the
reduction of overall profit margins reported in 2019 and additional
administration cost incurred in association with the development of
its subsidiaries. The impact of Covid-19 saw a decrease in event
driven equity volumes, but an increase in credit trading.
Highlights
-- Sales increased by 7.4% against FY2019
-- EBITDA reduced by 6.8% against FY2019
-- Net EBITDA profit margins 28%
-- Strong net cash position, over GBP5m.
The Group's audited results will be announced in due course.
John Gunn, Chairman, said, "Over the past few months, we have
seen increased market volatility and uncertainty as a result of the
impact of Covid-19. This has been the greatest challenge to the
financial service industry since the financial crisis of 2008.
During these periods of increased volatility, the board of GIS took
steps to limit client exposure to riskier assets and strengthen our
liquidity resources. The strategy in which we chose to navigate the
period, given the conditions, is a testament to the strength of our
business model. Our investments in technology has enabled us to
continue to serve our clients around the World, with all employees
working from home, offering clients a seamless 24-hour 5 day a week
service from London, Mumbai and Hong Kong. I am proud of the hard
work and conscientiousness of the team, with many facing personal
challenges given the impact of the Covid-19 lockdown. Whilst
largely relating to the pre-crisis period, the 2020 results
demonstrate the stability of our business model and protection of
our stakeholders' interests. Our balance sheet, capital and
liquidity position remain strong and we remain well positioned to
facilitate client activity during these uncertain times. For now,
our focus remains on the welfare of our employees and the financial
soundness of the business".
Highlights for the period to March 31(st) :
Discussions continue with the FCA as regards SynerGis
activity.
We continue to undergo an evaluation process with our regulator,
and we believe we've made good progress in demonstrating the
businesses' robust processes and controls that are essential for
intended specialist lending activity.
In light of the current though challenging conditions within the
lending sector, GIS will need to consider these conditions with the
launch of SynerGIS delayed until we see normal market conditions
restored.
GIS has in the period become a CREST participant and we will
shortly launch our service offering in the UK to regulated entities
and professional clients.
We have recently seen an increase in requests for our services
from UK and European regulated entities, who are seeking to reduce
their operational costs by engaging with GIS as their global
settlement and custody partner. We are encouraged by this trend and
we be developing a modest advertising campaign over the year ahead
to increase the awareness of our global service offering.
GIS HK is fully operational and has establish an impressive
network of Asia Pacific relationships to offer service to both its
London based parent and regional clients. The HK office has
contributed attributable income to its London parent, but we hope
the year ahead will see it demonstrate its fiscal autonomy as a
stand-alone entity, working in cooperation with its parent, but
also servicing Asia based clients looking for a global service
offering.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please visit www.octagonalplc.com or
contact:
+44 (0) 20 7048
Octagonal Plc 9400
John Gunn, CEO
Beaumont Cornish Limited (Nominated Adviser
and Broker) +44 (0) 20 7628
James Biddle / Roland Cornish 3396
www.beaumontcornish.com
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END
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