Capital.com UK Faces 60% Profit Decline in 2023 Due to Rising Costs, Despite Revenue Growth
#10FCOINGiveaway# Read&LIKE to get 10 FCOIN!
Traddoo, a prominent player in the retail proprietary trading space, has announced a temporary suspension of challenge sales for new clients. The firm is currently rolling out significant updates to its platform, including the introduction of a new client dashboard and expanded payment options.
Traddoo Pauses New Challenges Amid Platform Enhancements
As revealed on Discord by Dylan Worrall, CEO of Traddoo, the decision to pause new challenge purchases is part of the company's efforts to improve its platform, which will take several weeks. While these upgrades are being implemented, existing clients can continue with their challenges, trading activities, and withdrawals without interruption. Worrall assured customers that the company is focused on maintaining smooth operations throughout the update process.
What’s Coming for Traddoo Traders?
The new dashboard aims to provide enhanced usability and more comprehensive information for traders. Additionally, the firm plans to introduce credit and debit card payment options and refine its trader evaluation model in the coming weeks.
Industry-Wide Trend: Prop Firms Facing Challenges
Traddoo's suspension of new challenge sales comes at a time when other prop firms are facing more serious issues. Recently, Fundedlions announced a suspension of operations after claiming to have been "attacked and blackmailed" by its technology provider, prompting a shift to MetaTrader 5. Similarly, UK-based Indigo Trader Funding and Karma Prop Traders have both ceased operations in recent months, citing business failures and market challenges.
Capital.com’s UK division has reported a sharp decline in net profit for 2023, despite seeing a slight rise in revenue. The company's profit dropped over 60%, down to $1.5 million, mainly due to increased administrative expenses.
2023 Financial Results Show Profit Drop
Capital Com (UK) Limited, which handles Capital.com’s UK operations, posted $29.7 million in net trading profit for 2023, compared to $29.1 million in 2022. Gross profit also increased to $26.9 million, up from $22.8 million. However, administrative costs surged by $7 million, reaching $23 million, which significantly cut net profit to $1.5 million from $4.1 million in the previous year.
Notably, Capital.com UK paid a $5 million dividend to shareholders in 2023, a contrast to 2022, when no dividends were issued. The company’s investments in IT infrastructure and regulatory compliance also pushed staff costs from under $11 million to over $16.5 million, driven by a 27% increase in its workforce.
CEO's Perspective
Rupert Osborne, CEO of Capital.com UK, emphasized the company’s strong financial position, noting it holds £9.2 million in cash and £7.4 million in capital. While planned expenditures led to lower profits, Osborne stated that these investments are key to the company's long-term success.
Global Performance and Expansion
On a global scale, Capital.com has seen substantial growth. The company’s trading volume surpassed $1.2 trillion in 2023, and in the first half of 2024, revenue increased by 35%, with registered accounts growing by 63%. The firm continues to expand its operations, recently launching a bug bounty program to enhance platform security and appointing Jessica Bliesner as Group Chief Operating Officer.
London Capital Group (LCG) has released its financial results for 2022, revealing an increase in revenue, yet a deeper net loss for the year. The UK branch, owned by the struggling FlowBank, earned nearly £2 million, marking a 25% increase from the £1.6 million reported in 2021. However, the company's net loss grew by 30%, reaching £2.4 million.
LCG's 2022 Financial Performance
Despite the revenue growth, LCG UK reported operational losses of £3.7 million, though this is an improvement from the previous year. The net loss for 2022 was £2.4 million, up from £1.7 million in 2021. The company’s revenue was primarily generated through a back-to-back hedging arrangement with FlowBank.
Parent Company Liquidation
FlowBank, LCG’s parent company, entered liquidation in June 2024 following a decision by Swiss regulators. This has impacted LCG UK, as the British FCA briefly restricted LCG from onboarding new clients, though the restriction was lifted in July. Additionally, LCG’s Bahamas branch has been shut down due to FlowBank's collapse.
Future Plans for LCG UK
Despite these challenges, LCG’s board remains optimistic, outlining plans to return the company to profitability in 2024. Meanwhile, FlowBank’s liquidators have announced their intention to sell a 100% stake in LCG UK and discontinue operations in the Bahamas. Around 84% of secured deposits from FlowBank's 9,000 accounts have already been reimbursed by the liquidators.
Hirose Financial UK Ltd, an online retail FX trading provider, reported a substantial 79.7% increase in net profit for the fiscal year ending March 31, 2024. Despite a modest 1% rise in revenue, net profit grew to £530K, up from £295K the previous year.
Key Financial Highlights:
Revenue: £717K, a 1.03% increase from £710K in the prior year.
Administrative Expenses: Slight decrease to £431K from £432K.
Operating Profit: Improved to £285K from £282K.
Profit Before Tax: Rose by 2.64% to £303K.
The company attributed its success to tighter cost control and a focus on B2B market opportunities, despite ongoing regulatory pressures.
Strategic Shifts Post-Brexit:
Following Brexit in 2020, Hirose UK stopped accepting clients from the EEA, shifting its focus toward UK B2B clients. This strategic pivot has helped bolster the company’s growth amid a challenging regulatory landscape.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.