London Capital Group produced interim results in line with earlier guidance but
no less robust for that. Turnover was up by 54% to £12.5m, EBITDA by 56% to
£6.2m, net cash almost doubled to £9.7m and there was minimal bad debt. EPS rose
by 54% and the interim dividend was doubled to 2.5p.
Objective's view:
The results contained no surprises after the guidance given with the trading
statement in July. But that does not diminish them as a tribute to the
effectiveness and discipline of the LCG model. Revenues rose by over 50%, net
cash almost doubled and bad debts were de minimis. The combination allowed an
aggressive but comfortably affordable doubling of the interim dividend. Spread
betting remains the powerhouse and we expect further growth from this
inherently scalable business with the development of CFDs as a possible gateway
to the Orient. Estimates and valuation maintained.
