WorldSpreads in Profit

Spread betting provider Worldspreads has reported profits before tax of €1.67m for the six months to the end of September, up 22% on the €1.37m reported for the corresponding period in 2008.

Revenues increased 30% to €6.04m, while revenues from its international division was up 53% to €1.91m.

The number of active Worldspreads’ traders was up 56% to 2,598 during the six months.

Worldspreads stated that trading since September has been remarkably strong with November 2009 being a record month for the company. Average spread bets per day were up 18% to 4,487 despite the return to less volatile conditions in comparison with the year previous while the number of active clients were up 56% to 2,598.

Revenues from the United Kingdom increased 21% to €4.12m in the 6 months to September compared to the prior year period, while the international business – consisting of 8 markets where the company now has a presence; saw revenues increase by 53% to €1.91m over the corresponding period.

In contrast, the now disposed Irish division saw revenues decline by 44% to €1.99m over the corresponding period, which the group blamed to the well-known problems with the Irish economy and the exceptional trading enjoyed in the comparative period last year.

In addition to the disposal of the sports betting operations in April 2009 the spread betting company recently finalised the sale of its Irish financial spread trading arm to a management buyout led by Brian O’Neill, the group’s former chief operating officer. Under the terms of the disposal, WorldSpreads will receive €9.9m in total consideration, of which €3.2m is deferred over the next two years. WorldSpreads will also receive the proceeds from the sale of nearly 1.9 million WorldSpreads shares held by the former management team.

Worldspreads has emphasised that this sale will allow the group to gear up its international expansion and to reduce dependence on a single market where the economic conditions are uncertain.

‘Our focus remains on penetration of international markets outside Ireland and the UK and investing in the technological and product infrastructure which will be required to underpin this strategy.’

WorldSpreads CEO Conor Foley further stated ‘The board and management of the group have been repositioning the business over the past six months and we firmly believe that the increased focus and investment on international expansion will demonstrate significant growth potential over the coming months,’

‘Trading since the start of the period has been extremely positive for the UK and international markets. In particular, the month of November was the single most profitable month in the history of the UK and international divisions,’ he added.

WorldSpreads, however warned that profits in 2010 will be dented by significant increases in expenditure related to the company’s ‘resource base and systems needed to support… growth’ as the group expands its international reach. The company plans to expand its international and United Kingdom operations to fill the void caused by the sale of its Irish division and the board believes the strategic plan will deliver long-term shareholder value.

Comments: WorldSpreads may still be small in relation to IG but they know what they’re doing. WorldSpreads and London Capital Group are well positioned with balance sheets to support their growth plans but they need to deliver new partnerships to achieve accelerated growth.

Tags: world spreads, worldspreads

This entry was posted on Wednesday, December 23rd, 2009 at 7:57 pm and is filed under Financial Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.