Gain Capital UK sees improved performance in 2015 after City Index acquisition

Gain Capital UK Limited, the FCA regulated arm of global retail forex broker Gain Capital Holdings Inc (NYSE:GCAP), has reported its financial statements for 2015 indicating significant improvement for the company. The results are essentially for the City Index business which Gain Capital acquired in April 2015 for $118 million.

We’d also note that the results presented are for the last nine months of 2015, as City Index used to have a March 31 year-end, which Gain Capital has now shifted to December 31, in line with the rest of the company.

Gain Capital UK operates the and City Index retail brands in the UK and Europe.

For the nine month period (April-December 2015, inclusive) Gain Capital UK saw Revenues of £55.3 million (average of £18.4 million per quarter), versus £67.8 million for the full year ended March 31, 2015 (average of £16.9 million per quarter) – meaning a 9% increase in Revenue YoY. Of course, some of that increase consists of non-City Index business at Gain Capital which was folded into the combined company after the acquisition.

On the bottom line Gain Capital UK earned £11.4 million in the nine month period, an obvious improvement from City Index’s £0.4 million loss the previous year.

We’d note that Gain Capital did see a nice bump in retail trading volumes during most of 2015 in the months following the City Index acquisition – as would be expected. However after seeing retail volumes regularly top $350 billion monthly during most of 2015, Gain Capital volumes have shrunk considerably during 2016. August’s $191 billion figure marked the company’s slowest month since 2013. We understand that a lot of that volume leakage has come in the UK and Europe from former City Index clients which have migrated to other brokers and platforms.

Gain Capital UK’s income statement follows:

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