London Capital Hldgs Share Discussion Threads

[showmethehoney] 11/7/2013 10:40

I will buy a beginners accounting book next week.

Where did the net current assets of £16m figure come from please?

[britishb] 11/7/2013 09:51

They're different things muscat. eg still a provision in net cur lia's for FOS issues etc. Try reading a beginners accounting book.

[topvest] 11/7/2013 09:21

Yes, great news. This confirms what I had thought to be honest which was the previous management team were rubbish and basically running a high cost unfocused business. A bit of financial discipline and sound management with some better market conditions and we are back to reasonable profits. Yes, looks very cheap if the new CEO is going to turn this around. We have to remember that the share price is on the floor due to 5 years of mishap. Bodes well for the first time in a few years.

[oregano] 11/7/2013 08:54

if this is replicable, this looks seriously cheap. but there appears to a supply of stock. unsure who is selling.

[britishb] 11/7/2013 08:32

Quite a turnaround from H2 last year. Looks daftly cheap (£6.2m pa op profit annualised) and given net current assets £16m.

If current run rate persists must be worth £1/share non?

Risks with FOS stuff and deterioration in trading but even so, up looks more likely than down, non?

[masurenguy] 11/7/2013 08:20

RNS Number : 0868J
London Capital Group Holdings PLC
11 July 2013

Trading update

The Board of London Capital Group Holdings plc ("the Group"), the financial services and online spread betting and CFD company, is pleased to give the following trading update in respect of the first half of the current financial year and announces that it will release interim results for the period ended 30 June 2013
on 22 August 2013. The Group is expecting to report that adjusted profit before tax from continuing operations for the six months to 30 June 2013 will be in the region of £3.1m compared to £2.1m for the same period last year and a loss of £2.3m for the second half of last year. Adjusted profit before tax from continuing operations is stated before recognising a charge in relation to share based payments of £0.03m, previously announced costs associated with the current change in IT platform of £0.9m, and non-recurring restructuring costs of £0.7m.

Following the difficult trading conditions of the second half of last year, there was an increase in market volatility which led to improved revenues and KPIs in 2013 more in line with those seen in the first half of 2012. Revenue from continuing operations was £16.2m (2012: £17.8m), of which £13.2m (2012: £12.8m) was derived from the retail spread betting and CFD business and £3.1m (2012: £4.8m) was derived from the institutional FX and broking businesses. During the period the Australian subsidiary's trade was wound down and the entity was disposed of. It is anticipated that the sale of ProSpreads, the Gibraltar based subsidiary, will be completed in the next 4-6 weeks. The profit from discontinued operations for the period was £0.1m (2012: loss of £0.7m). Overall the Group is well capitalised and as at 30 June 2013 had net cash resources and amounts due from brokers amounting to £24.4m.

Commenting on the results, Mark Slade, Chief Executive, said: "We have enjoyed strong trading conditions in the first half of the year and our financial performance has benefited from improved market conditions. We have also made good progress reshaping the business and while we are moving in the right direction there is still much work to be done for the company to achieve its full potential."

[masurenguy] 09/7/2013 12:28

Rachel Woodford steps down from the BoD today.

[masurenguy] 28/6/2013 15:11

A couple of 50K sells and a 71K sell between 35p - 36p has pushed the price down today.
I wonder what prompted those trades !

[topvest] 13/6/2013 20:37

Yes, all this volatility must be helping a great deal. Just the tonic for LCG, but not great for the rest of the portfolio!

[davidosh] 13/6/2013 10:57

I suspect they are doing very well right now so long as they have enough customers left trying to judge and trade the market movements. There should be an update due within next few weeks.

[mister md] 13/6/2013 10:51

Shouldn't this be doing well in these volatile markets ?

[masurenguy] 20/5/2013 16:22

They normally provide an interim trading statement during the second week in July.

[sparkymoc] 20/5/2013 15:27

Anyone know when the next results/ IMS is due?

Cant find any info on their website.

[canteatvalue] 17/5/2013 14:26

topvest, I completely agree with that sentiment. Sparkymoc - indeed it is, it's heavily determined by how well Mark Slade can execute on operations here.

One interesting valuation metric is a price to sales comparison to their competitor, IG Group (Sharelockholmes source):

IG: 5.08x
LCG: 0.78x

IG obviously deserve a good premium for more consistent margin performance, a more diversified business and a dominant market share but the comparison is staggering and shows the potential upside if Mark Slade can really execute well here. Even at a 50% discount to IG that's 225% upside - a huge margin of safety and even fairly weak execution should see a re-rating IMO.

[topvest] 17/5/2013 07:58

It is at the moment, but has to be quite a bit of upside particularly if markets get more volatile. In my view it's largely down to the new CEO. I'm probably not the only person to say that I think the company has been very poorly run over the last 3/4 years. The core business is fundamentally sound and they have some good platforms. If the new CEO can stop the mistakes and reduce cost, with better market conditions then this could be quite profitable again.

[sparkymoc] 15/5/2013 15:13

Hard to put a value on this company

[topvest] 13/5/2013 17:35

Another bit of buying from a director. Recovery taking hold?

[masurenguy] 13/5/2013 16:44

Director & CIO Bill Newton invests £64,500 to buy a further 150,000 shares!

RNS Number : 5972E
13 May 2013
London Capital Group Holdings plc
Director Share Dealing
The Company has been informed that on 13th May 2013 William Newton purchased 150,000 of the Company's ordinary shares at a price of 43 pence per share. Following this transaction William Newton has voting interests in 350,000 ordinary shares representing 0.66% of the Company's issued share capital.

[sparkymoc] 12/5/2013 20:16

Ok cheers CEV.

I'm just trying to decipher if this could be a potential turnaround story or a value trap but I think it could be worth a punt.

Does anyone know how credible the new CEO is? Recently bought some shares so that's bodes well

[canteatvalue] 12/5/2013 13:47

sparkymoc,

They did a restatement a few years ago after the accounting rules changed so the cash they display now is entirely 'own cash' - although it's not all excess cash as a lot of it is used for regulatory capital.

With respect to tier capital ratios, there's a lot of disclosure around this at the very back of their annual report. From what I can see, LCG are very comfortable in this regard and have decent headway over the regulatory requirements.

[sparkymoc] 12/5/2013 11:39

Hi

Can someone explain two basic things for me from the annual report?

1. How much of the cash & cash equivalents is their own (I.e not their clients money)?

2. I see they mention tier capital ratios. Are LCG well within their ratio limits?


Thanks in advance

[topvest] 10/5/2013 19:54

Yes, that's more like it!

[canteatvalue] 09/5/2013 13:22

That's more like it Marky! £92.5k worth of shares bought in the market now by him - good to see confidence from him.

[topvest] 24/4/2013 19:30

Thanks for the write-up...interesting. Lots of value here if the new CEO can take cost out and market conditions normalise a little.