Worldspreads warns on revenue slowdown
The chief executive of financial spread betting group Worldspreads has told investors that revenues from its units in key continental European markets haven't risen as quickly as had been expected and that it may be some months before the performance improves.
The company warned that a slower than expected rate of revenue growth could result in the group reporting a small loss for the year ending this March, rather than a previously expected profit.
Bloxham Stockbrokers had been forecasting a €2m operating profit for the current financial year at Worldspreads.
Shares in Worldspreads sank more than 22pc in Dublin yesterday morning before regaining some ground to end the session down 16.6pc at 55 cent, valuing the company at €22m.
In a trading update issued by the Irish firm yesterday, chief executive Conor Foley said that new businesses the company launched in France, Germany, Denmark and Sweden last October had commenced operations during a period of lower than anticipated volatility.
"Consequently, while growth in revenues from our existing international businesses has continued, incremental revenues from these new territories have not yet materialised to the extent originally envisaged," said Mr Foley, who added that the board "remains convinced" that Worldspreads's strategy for overseas expansion would achieve its original objectives.
Transaction numbers at the firm climbed 50pc during the 2010 calendar year, while the number of active clients rose 40pc. Client funds in the period were 80cpc higher and the company had net assets of more than €20m.