TechFinancials stays downbeat on FY 2015 prospects, as OptionFair weighs on results

Binary platform provider and operator TechFinancials Inc (LON:TECH) has just reported its results for the first six months of 2015, with the report confirming a steep decrease in operating profits, reflecting increase in expenses and some disappointing performance of OptionFair, the binary options brand and main source of revenues for TechFinanials.

In a previous update, the company warned that OptionFair was failing to achieve its anticipated level of business. Today, TechFinancials confirmed that it will be unable to meet the forecasts for profits and revenues for the full year to December 31, 2015, because of the weak performance of OptionFair.

While TechFinancials’ platform licensing business continued its steady growth (see revenue chart below), OptionFair revenues in 1H-2015 dropped more than 30% from 2H-2014:

TechFianncials results 1H2015


Whereas TechFinancials has instigated changes to the management and operations in OptionFair to restore and improve its rate of customer conversion, the Board does not believe that these changes will take effect in time to enable OptionFair to achieve its anticipated level of business.

Consequently, as stated in the announcement dated 21 August; the Company would not meet market expectations regarding revenue and profit for the year to 31 December 2015.

The Board expects OptionFair to return to a higher level of customer conversion and improved profitability in the next financial year.

Financial Highlights for H1 2015

  • Revenues at OptionFair dropped 20% year-on-year to $3.31 million ($4.12 million in H1 2014).
  • Software licensing revenues increased 30% year-on-year to $4.03 million ($3.03 million in H1 2014).
  • Overall revenue increased to $7.34 million (H1 2014: $7.16m).
  • Gross Profit increased by 16% to $5.18 million (H1 2014: US$4.46m).
  • Gross Margin increased by 9% to 71% (H1 2014: 62%).
  • Operating profit decreased by 86% to $0.10 million (H1 2014: $0.74 million).
  • EBITDA decreased by 31% to US$0.55 million. (H1 2014: US$0.80m), mainly due to a greater proportion of R&D being expensed compared to capitalised in the prior comparison period
  • Cash position at the period end was US$4.6m (H1 2014: US$2.3m).

Asaf Lahav, Group Chief Executive Officer of TechFinancials, commented:

“Notwithstanding a decrease in profit, the Group’s operational performance has been positive and the board remains confident about the Group’s future prospects. We have a strong cash position as a result of our AIM listing in March 2015, and it will be utilised to further invest in marketing and R&D as well as evaluating potential joint venture and acquisition opportunities to help facilitate future growth.”

To view the official filing with the LSE, click here.

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