Courtesy of the London Stock Exchange:
Trading Update and Resignation of Director
The Board of WorldSpreads Group plc provides the following update on current trading.
Since our interim results, which were released on 30 November 2011, the Group has continued to demonstrate substantial improvement in its key performance indicators. In the 12 months to 31 January 2012, transaction volumes increased by more than 60%, active clients increased by more than 35% and new funded clients increased by 40% over the comparable period for the previous 12 months.
The Group has continued to invest in its IT systems. Its new mobile interface was delivered at the beginning of 2012 and our proprietary CFD trading platform is scheduled for launch in early March. The Group's international expansion has also progressed with strong growth seen in France and Germany in particular. As previously announced, the Group opened a new sales office in Tel Aviv and we have begun to see strong interest in our products from both introducing brokers and clients.
At the time of announcing our interim results, the Board expected that Group revenues would be weighted towards the second half of the financial year ending 31 March 2012. However, despite the strong growth across the Group's key performance indicators, this has not translated into top line revenue growth particularly in the period since 1 January 2012. A combination of benign market conditions and low volatility in certain key markets has significantly impacted revenues. As a result the Board now anticipates that the Group will report a loss for the full financial year. The Board believes that the Group has recently been experiencing an unusual pattern of client trading and fully expects a more normal trend to prevail in future. The Group maintains a strong balance sheet with net cash of €7.0 million as at 31 January 2012.
As a separate and unrelated matter, Director and CFO of the Group Niall O'Kelly has submitted his resignation after eight years' service to the Group. Mr O'Kelly is based in Ireland and has been involved for some months in preparing the way for a move of the Group Finance function to the London regulated subsidiary where the Group's risk management function is centred. Mr O'Kelly has a 12 month notice period and will continue to work for the Group and assist with the handover process to his replacement. The Board will agree his final date once a suitable replacement can be found.
Conor Foley, Group CEO, commented: "Despite the successful implementation of our sales and marketing campaign, improving performance from our new overseas operations and the successful cost management structures in place, we are disappointed to report that revenues for the second half of the Group's financial year ended 31 March 2012, will be behind our previous expectations. Market conditions since 1 January 2012 have been such that, whilst transaction volumes have been high, revenues have not increased at the same pace. We continue to review the returns delivered by our trading strategy and are confident that the recent trend in our clients' trading results will reverse over the medium term.
Mr O'Kelly has made a major contribution to the development and growth of the Group over the past eight years. On behalf of the Board I'd like to thank Niall for his hard work and service."