The parent company of retail Fx broker FOREX.com, GAIN Capital Holdings Inc (NYSE: GCAP), has released its second quarter 2018 earnings result. The figures are less compared with the previous quarter or year’s earnings report, as the company has sold its institutional Fx business division GTX to Deutsche Boerse AG’s 360T for $100 million which was acquired in the Q2. GAIN during the period also discontinued its FOREX.com money transfer business to fully concentrate on its retail offerings.
Overall from its retail business division, revenue derived from FOREX.com and City Index brands saw a revenue fall by 14 per cent to $84.2 million, against the restated $98.3 million in Q1 and 7 per cent fall year-over-year. The company remained profitable during the quarter with net income of $6.5 million which excludes after-tax Q2 gain of $61 million from the sale proceeds of GTX. Adjusted EBITDA came in at $19 million.
During the quarter, Retail average daily volume increased by 7 per cent year-over-year to $10.6 billion and direct volume per active account increased 11 per cent year-over-year. The company registered 8 per cent growth in new clients acquisition.
On June 29th, 2018, the company completed the process of the sale of its institutional unit, GTX ECN business to Deutsche Börse Group via its FX unit, 360T. The company received $85 million net of taxes and transaction-related expenses and fees. The proceeds from the sale will allow increased financial flexibility, pursue M&A and pursue both organic and inorganic growth. The company feels that the new regulation by ESMA concerning the leverage caps on CFD will affect the revenue and profitability in the next few quarters.
Glenn Stevens, CEO of GAIN Capital commented:
“The second quarter marked a key milestone for our Company as we announced the sale of our Institutional GTX ECN business and reaffirmed our commitment to invest in the long-term growth of our core Retail segment.”
“Despite the lower volatility environment during the second quarter, our results for the first half of 2018 remained strong with net revenue from continuing operations increasing 29% year-over-year, demonstrating our early success in executing on our strategic priorities to deliver more sustainable returns and drive growth. Looking ahead, we will continue to make significant investments in our products and services and marketing, execute on our operational excellence and revenue volatility reduction initiatives, and optimize our capital allocation to enhance GAIN’s shareholder value and further position us for long-term growth.”
