18th Dec 2015 12:36
LONDON (Alliance News) - Octagonal PLC on Friday reported lower first-half pretax profit, as better revenue was more than offset by higher administrative expenses and the costs of Octagonal's reverse takeover of Global Investment Strategy in June.
Octagonal currently generates the bulk of its revenue through GIS, which provides global settlement and safe custody services to investors.
Pretax profit fell to GBP139,000 in the six months ended September 30 from GBP260,000 the corresponding half the prior year, as revenue grew to GBP1.9 million from GBP1.5 million.
Aggregate trade volumes exceeded 47,800 for the six months, an increase of 35% on 2014, with June setting a monthly record number of transactions for the business at over 12,000. July was another strong month with a 66% increase compared to the same month in 2014, Octagonal added. A total of GBP470,000 of costs were incurred due to the fees of the reverse takeover and subsequent costs of admission to trading on AIM.
"The prospects for the second half remain very positive, and the board is confident of achieving market expectations for the full year," Chairman Grant Roberts said in a statement.
Roberts said the business is looking at measures to save money, aimed at its direct settlement costs, which should benefit profit.
In addition, the company wants to grow revenue by providing execution-only services to existing clients in addition to the current settlement and custody services. On top of that, the company aims to grow its nascent asset management and investment advisory services.
Efforts to boost revenue will have a "limited" immediate effect, with the company looking for more meaningful growth to come through in the 2017 financial year.
The company's new Altimis cloud-based settlement and client reporting IT system will go live very shortly, according to the chairman, being deployed into the business during December and early January.
"This system is the successor to Flagship (GIS's current IT system) and is a fully automated settlement and custody and client reporting system that provides significantly improved client reporting and experience. This fully automated system should enable cost savings and provide a fully scalable platform for future growth," Roberts said.
Shares in Octagonal were down 9.4% at 0.702 pence on Friday.
By Samuel Agini; [email protected]; @samuelagini
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