Binary options platform provider and operator TechFinancials Inc (LON:TECH) today announced its results for the year ended 31 December 2016.
The financial highlights are:
- Revenue increased by 57% to US$21.3 million (2015: US$13.6 million)
- Core software licensing revenue increased by 22% to US$10.4 million (2015: US$8.6 million)
- Trading platform revenues increased by 117% to US$10.9 million (2015: US$5.0 million)
- Revenue from DragonFinancials of UD$9.3 million; net profit of US$5.6 million – Company holds a 51% stake in DragonFinancials
- Net cash generated from operating activities increased to US$5.9 million (2015: US$0.1 million)
- Gross margins increased to 78% (2015: 71%)
- Operating profit increased to US$5.0 million (2015: operating loss US$0.1 million)
- EBITDA attributable to shareholders was US$2.8 million (2015: US$0.6 million)
- Pre-tax profit attributable to shareholders was US$1.3 million (2015: pre-tax loss of US$0.4 million)
- Strong cash position of US$7.7 million as at 31 December 2016 (2015: US$3.4 million)
- Basic earnings per share (EPS) have increased to a profit of US$ 1.72 cents in 2016 from a loss of US$ 0.73 cents in 2015
- DragonFinancials, the Company’s 51% subsidiary, paid an interim dividend of US$2.0 million in November 2016 and an additional final dividend of US$3.0 million was paid in March 2017
- Additional consideration of US$1.54 million payable in shares to owners of Optionfortune (noncontrolling interest holders of TechFinancials) based on DragonFinancials’ results for 2016 – contingent consideration of US$4.53 million payable on results for 2017 Operational Highlights Software Licensing (B2B)
- B2B software licensing division continued its strong performance with significant revenue growth
- Launch of an add-on Contract For Difference (CFD) trading platform in the second half of 2016
- Continued international expansion – major push into the Asia Pacific region opening Chinese office to expand B2B services to China
- R&D focused on solutions for Asian markets and on development of products to meet regulatory changes.
- Strengthened R&D team in Ukraine
Trading Platform (B2C)
• Returned to profitability in the B2C division through the successful integration and operation of DragonFinancials, a new B2C trading platform focused on the Asia Pacific Region
Asaf Lahav, Group Chief Executive Officer of TechFinancials, commented:
The Group enjoyed a good year in which we have seen profitability restored as a result of the decisions we took as a Board to diversify our product offering and focus on high growth markets such as Asia.
However, going forwards we expect 2017 will be challenging due to the loss of our largest customer and the uncertain and tightening regulatory environment particularly in Europe. We anticipate these regulatory changes will have an impact on the B2B performance for the rest of 2017, both on its revenues and on earnings.
Our focus in 2017 will be on mitigating the loss of our largest customer and adapting to the tougher regulatory environment by diversifying our product offering with the introduction of Forex and CFD online trading solutions and with plans to introduce further products in coming years. We will also build on the success achieved by our B2C offering and focus on Asia.
We do feel that ultimately the regulatory changes will strengthen the industry and that there will be clarity by the end of 2017, and once that occurs, with a strong balance sheet, we will be well positioned to serve the market from 2018 onwards.