Volatile markets give London Capital Group a boost as interim profits soar
Volatile market conditions helped profits more than double at spread betting firm London Capital Group over the past six months, its interim results revealed yesterday.
Profits before tax rose 52 per cent to £5.43m in the six months to the end of June as sharp falls in share prices tempted more people to try spread betting.
The number of spread betting clients increased by 96 per cent, while the average number of trades per day leaped by 136 per cent compared to a year ago.
“The current market conditions are attracting more people into financial activity although the actual income per client has hardly changed compared to previous years,” said Simon Denham, managing director of Capital Spreads, London Capital group’s spread betting brand.
Spreadbetting client funds rose by 59 per cent to £22.33m over the period, but Denham said clients were reducing their stake size.
“Two years ago the average bet size on the FTSE was £5 now it is more like £2-£3 as it can move up to 100 points in a day,” he added.
The group is now focusing on European expansion using local partners. It recently launched retail platforms in Germany and Denmark and in September it will open in Spain.
“We believe that international expansion is key to driving the long term growth prospects of the company,” said Investec analyst Daniel Havercroft. Shares in London Capital closed 5.2 per cent higher at 304p.