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London Capital Group expects interim pre-tax profit down on last year

Published: 10:56 10 Jul 2012 BST

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London Capital Group Holdings (LON:LCG) shares fell 11 per cent today as it revealed it expected adjusted pre-tax profit for the half year to be around £1 million less than for the same period last year.

For the six months to June 30, the firm which offers online trading services and releases interims on August 22, expects profit before tax to be in the region of £2 million compared to £3 million in 2011.

"Although market volatility and volumes remained low in the first half of the year, the retail spread betting and CFD (Contracts for Difference) business continues to trade well and revenues were 10 per cent higher than the same period last year," the company said in an update.

It said client acquisitions grew by 4.2 per cent, highlighting that a number of significant new white label partners due to begin trading in the second half of this year had been added.

In Australia the CFD business had doubled both its client base and trade volumes though continued to generate losses, it said.

Overall the group continues to trade well, is well capitalised and as at June 30 this year had net cash resources and amounts due from brokers amounting to £25.6 million.  

"The board is focused on ensuring the group's cost base remains low whilst maintaining sufficient flexibility to progress its growth strategy," it said.

As at 10.55am, the shares were down 11.03 per cent, at 64.5 pence.


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