London Capital Group Narrows Losses in FY21 Despite 86% YoY Fall in Revenue

London Capital Group (LCG), a London-based leading provider of online trading services, generated over £1.58 million revenue in the financial year 2021 ended on 31 December, a 86% slump in compared to the prior year, according to the Companies House filing. This resulted from the declining trading volume, which was down 58% on a yearly basis to £68 billion.

"A significant structural change to the company, the ongoing impact of Brexit, regulatory changes to the CFD industry, and market volatility have all impacted business performance for the twelve months ended 31 December 2021. Overall, the company has experienced a material fall in revenues, but reduced costs have resulted in a smaller operating loss for the year versus the year prior," the filing noted.

Besides, the number of the broker’s monthly active clients stood at 4,461, dripping 27% over 2020. Its gross profits for the year declined 89% on a yearly basis to £1.09 million. Whereas, the company narrowed the pre-tax losses from 2020’s £2.13 million to £1.74 million.

"LCG's transition to a new business arrangement with its parent company (FlowBank SA) required a major adjustment to day-to-day operations, and management expects to continue to devote significant time into making it a success. The structural changes have reduced costs but resulted in an expected reduction in average monthly trading volume and revenues," the filing added.

Last month, LCG has formed a partnership with IG Group​, a brokerage firm listed in London. The partnership enables LCG to leverage IG's platform, pricing and execution.