LCG profits down by close to one third
Group's Gibraltar-based ProSpreads incurs losses of £0.4m for the six months to 30 June 2012.
London Capital Group (LCG) has cited low volatility and continued restructuring for declining profits in the first half of 2012.
Low volatility during the early part of the year saw ProSpreads, the group’s Gibraltar-licensed financial spread betting business, incur losses of £0.4m for the six months to 30 June 2012, compared to a profit of £0.04m during the same period in 2011.
The financial services and online spread betting firm is expecting to report that adjusted pre-tax profit for the Group for the six months to 30 June 2012 will be in the region of £2m compared to £3m for the same period last year.
This drop does not take into account a charge for share based payment expense and a provision for £1.9m as previously disclosed relating to Financial Ombudsman Service (FOS) claims relating to a client complaint about commission rebating of a managed spot FX fund in 2009, LCG said in a statement.
Its retail spread betting and contracts for difference (CFD) business has fared better, with revenues 10% higher than the same period last year. Client acquisitions grew by 4.2%.
The Australian CFD business has doubled both its client base and trade volumes, however it has continued to generate losses which amounted to £0.3m for the first six months of 2012 compared to £0.3m in 2011. London Capital Group said it expects the business to be operating at a profitable level in the next 12 months.