Shares in AIM-listed financial services company London Capital Group dropped after announcing that it fell into the red last year, for which reason it decided to slash its total dividend by two thirds.
The company further reported that revenue decreased 27% to £28.6m. An adjusted loss before tax of £0.2m was recorded, in contrast to an adjusted profit of £7.1m in the previous year.
Net cash and short-term receivables of £20.4m were recorded at the year-end compared to £25.1m in 2011.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Divisional revenue was down 26% in the company' UK financial spread betting segment.
Financial spread betting average trades per day decreased 24% to 25,029 compared to 33,042 in the previous year. New client acquisitions were also down, totalling 10,123, slightly less than the 10,398 recorded in 2011.
Trade volumes decreased to $383bn from $544bn a year earlier in the group's institutional foreign exchange segment, while divisional revenue for this segment fell to £6.1m from £8.0m.
Chairman: lower volatility resulted in less trading opportunities for LCG customersGiles Vardy, Chairman of London Capital Group, commented: "As anticipated, 2012 proved to be a difficult year for the group. Financial results were disappointing with a marked decline in customer trading activity, especially in the second half of the year.
"Whilst it is often easy to blame market conditions, it remains true that lower levels of volatility in markets overall meant that there were less trading opportunities for LCG's customers to pursue. As a result revenues were 27% lower than 2011 and profits declined throughout the year leading to a £0.2m adjusted loss before tax for the year as a whole."
Dividend policyHe added: "Given the results, and having paid a 1.3p dividend at the half year, the board does not consider it appropriate to pay a final dividend. The board's policy is to pay dividends from available profits whilst considering the current and future capital requirements of the business."
London Capital Group's share price was down 4.04% to 47.50p at 12:54 on Wednesday.
MF
-
What happens if you can’t pay your tax bill, and what is "Time to Pay"?Millions are due to file their tax return this Friday as the self-assessment deadline closes. Though the nightmare is not over until you pay the taxman what you owe - or face a penalty. But what happens if you can't afford to pay HMRC your tax bill, and what is "Time to Pay"?
-
What does Rachel Reeves’s plan for growth mean for UK investors?Rachel Reeves says she is going “further and faster” to kickstart the UK economy, but investors are unlikely to be persuaded
