Sign up United Kingdom
Proactive Investors - Run By Investors For Investors
Why invest in TECH?

Techfinancials digs in while online trading markets settle

A bright spot was another good performance by consumer facing subsidiary DragonFinancials
picture of percentage
Techfinancials believes clear regulatory guidelines will help its business

Binary options and other types of online trading have come under close scrutiny in a number of countries.

Platform software specialist TechFinancials PLC (LON:TECH) believes ultimately it will be a beneficiary of the moves by the regulators and sees strong protection of consumer interests as a good thing. 

The group says it works hard to maintain its competitive advantage by ensuring its trading platforms and solutions are regulatory compliant in all relevant jurisdictions.

Even so, the environment for online trading platform developers is uncertain at present and TechFinancials has been has been cutting costs and developing new products to adapt.

A simplified forex platform, mobile trading solutions and add-on CFD platform have already been introduced but the tightening up on binary options means a switch towards Forex and CFD products is likely to accelerate.

Fortunately, it also looks to have the financial strength to batten down until there is more clarity in the marketplace and the regulatory backdrop becomes more settled.

READ: Techfinancials to pick up US$1mln dividend from Asia subsidiary

Revenues dropped to US$6.97mln (US$9.86mln) in the half year to June, which also reflected a major blow as its largest B2B customer, owner Richfield Capital, moved to an in-house system.

Core software licensing revenues totalled US$3.58mln (US$5.82mln), while trading platform revenues totalled US$3.77mn (US$4.47mln).

Interim group profits were US$282,000 (US$1.33mln) with cash at half year of US$5.8mln, the company said in a statement.

DragonFinancials the star

DragonFinancials was the stand-out performer. Turnover at the Hong Kong-based consumer-facing business rose by almost 10% to US$3.57mln while net profit climbed by 30% to US$2.06mln.

After the half year DragonFinancials also paid a dividend of US$2mln, of which TechFinancials received US$1.02mln pro-rata for its 51% stake.

READ: TechFinancials has significant financial buffer against current choppy market conditions

Diversification the plan

Asaf Lahav, group chief executive, said: "We anticipate the remainder of this financial year continuing to be challenging within the binary options market until there is clarity surrounding the on-going regulatory consultations.

“Nonetheless, we remain focused on diversifying our business in order to withstand these pressures and we have plans to introduce further products in the coming years.

"We are actively looking at potential projects that will leverage the company's technology and its expertise in online financial trading solutions and we will provide an update to our shareholders on our progress in due course."

At 6.9p, up 4% on the interim numbers, Techfinancials is valued at about £5mln.

What TechFinancials does

In a nutshell, it is a creator of electronic trading platforms.

Its business-to-business arm (B2B) provides software and back-up to brokers, enabling them to allow their customers to trade binary options, foreign exchange and certificates for deposit (CFDs).

The business-to-consumer division (B2C) includes the aforementioned DragonFinancials and is largely focused on binary options trading – a win or lose (hence “binary”) a fixed amount variant on traditional options.

View full TECH profile View Profile

TechFinancials Timeline

Related Articles

Network security
March 13 2018
The company was arguably late to change to a software-as-a-service model, but the change is beginning to take hold
Mergers & acquisitions - takeover
January 11 2018
"Vermeg's acquisition of Lombard Risk will create a leading global financial software provider," said Badreddine Ouali, founder and chairman of Vermeg
Rail car on a track
July 26 2018
The US has more than 1.5 million freight cars and Duos Technologies has found a faster and innovative way to safely maintain them

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use