26th May 2016 10:01
LONDON (Alliance News) - TechFinancials Inc, the AIM-listed provider of technology to binary options brokers, on Thursday reported that it swung to a pretax loss in 2015, hit by a 12% fall in revenue, as a "tougher trading environment" hit its business-to-consumer trading platform.
In a statement, TechFinancials said it made a USD376,000 pretax loss in 2015, compared with a USD794,000 pretax profit a year earlier, as revenue dropped to USD13.6 million from USD15.5 million. Together, the costs of research and development, selling and marketing, and administration rose to USD9.7 million from USD8.0 million.
Techfinancials, which listed on London's AIM in March 2015, did not declare a dividend. The company intends to pay a dividend to shareholders "in the future when the group returns to profitability". As well as providing technology to brokers, the company runs its own online broking activities.
Although TechFinancials' core software licensing revenues increased to USD8.6 million from USD6.6 million, revenue from its B2C trading platform decreased to USD5.0 million from USD8.9 million.
Chief Executive Officer Asaf Lahav said the company's business-to-business software licencing division continued to perform well in 2015, though Chairman Christopher Bell said the B2C OptionFair business suffered from a "tightening" regulatory environment. The B2C arm suffered as new CySEC regulations in Cyprus resulted in a lower than expected rate of customer conversion. The number of active customers fell by 71%, hitting trading volumes on the platform.
"2015 saw a worldwide tightening of regulatory guidelines and increased monitoring of binary options trading. Whilst the implications of this were challenging for the company, management strongly believes that TechFinancials technological edge in supporting regulatory compliant trading will provide it with a clear competitive advantage and a catalyst for growth in the longer term," Bell said in a statement.
"In response to this," Lahav said, "the group undertook a number of actions to reverse the difficulties it faced due to increased regulatory supervision and we are confident that the group is now better positioned moving forwards and that we have built strong foundations for renewed growth."
TechFinancials will continue to invest "heavily" in research and development, new markets, regulatory compliance and marketing activities to boost global awareness of its brand, Lahav said.
His focus in 2016 is to integrate TechFinancials' new agreements with Optionfortune Trade Ltd - to run a new B2C binary options trading platform focused on the Asia Pacific Region - and IBID Holdings Ltd - to grow Techfinancials' existing B2C binary options trading brands.
Lahav, who wants to build on efforts to restore the B2C activities to profitability, said trading in the first quarter was in line with market expectations.
"We remain committed to creating value for shareholders and we look forward to updating the market on our progress in due course," Lahav said.
Shares in Techfinancials were up 9.9% at 13.19 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
TECH.L