ADS Securities London Limited, the FCA regulated London-based subsidiary of United Arab Emirates forex and bullion trading brokerage ADS Holdings LLC, reported its 2015 financial results (see income statement below) indicating significant growth in the business, but also a large net loss for the year.
ADS Securities’ 2015 Revenues nearly doubled from the previous year, hitting £3.4 million ($4.9 million), up from £1.9 million in 2014. About half of the company’s revenues are attributable to Institutional clients. However the company’s expenses skyrocketed as well, with Salary related expenses alone topping £5.1 million versus £2.0 million last year.
Overall, ADS Securities UK reported a net loss of £5.5 million ($8.0 million) for the year.
The parent company in the UAE continues to pour a lot of cash into ADS Securities UK, more than £13.3 million ($19 million) since the beginning of 2014 – including £5.25 million in 2015 and £3.5 million at the end of Q1 2016.
As we have written in covering other similar financial reports of UK subsidiaries of international forex brokerages, (such as our recent articles on the 2015 results at OANDA UK and at Henyep Group UK sub HY Markets), the financials don’t always tell the whole story. ADS Securities UK acts in an execution only capacity on a matched principal basis. All trades are executed via a back-to-back trading agreement with another group entity, ADS Securities LLC in Abu Dhabi. Meaning, that the net income reported in ADS Securities UK is essentially managed by its parent corporation, and most of the ‘real’ trading and market making revenues are recorded at the parent company in the UAE.
However we can still get a fairly good indication from the ADS Securities UK books as to the general direction of the company, and its overall health.
James Watson, CEO of ADS Securities London Limited commented to LeapRate regarding the company’s financials:
ADS Securities London is one year old and in 2015 the company made a considerable capital investment in setting up its operations. This was in line with the business plan and the firm is on target to achieve its business goals. ADS Securities is committed to building a very strong presence in London working under the regulation provided by the FCA.
Some other key notes from the report include:
- Despite the already-noted growth in salaries paid and expenses, ADS Securities UK remains committed to hire additional sales staff to keep things growing.
- ADS Securities plans to expand its product offering, to include a full white label version of the Orex Optim platform for London, enabling it to offer FX Spot, CFD, spread betting and mobile trading.
- Forwards and non-delivered forwards will be delivered to the platform later in the year to offer a more rounded FX product suite.