WorldSpreads pretax profits soar on volatility

Dublin-based financial spread betting group WorldSpreads has reported a 137 per cent rise in pretax profits to €3.1 million for the six month period to the end of September.

In a statement this morning WorldSpreads said overall revenues were 69 per cent higher at € €8.43 million, adding that the current market volatility had been positive for the business.

Operating costs increased by 50 per cent year-on-year over the period to €4.49 million, due to greater investment in marketing and from IT development costs.

Average bets per day rose by 104 per cent to 4,793, while the number of active financial clients rose by 45 per cent to 2,525. basic earnings per share were up 700 per cent to €0.064.

Conor Foley Chief Executive Officer said while the market volatility has been favourable getting new clients and successfully managing risk had been central.

"I am confident that WorldSpreads will continue to grow through the expansion of our activities in the UK, Ireland and in an increasing number of international territories over the coming periods," he said.

By betting on the movement of stock prices, market indices, commodities and other investment products without actually buying them, clients of spread-betting firms can take positions on these investments going up or down.

Because they do not depend on rising markets to get a return, spread-betting is seen as a particularly attractive option when share prices are falling.

The company said the number of bets per day reached an average of 7,532 in September compared to an average of 2,929 for the same month the previous year.

WorldSpreads said group in its financial spread betting divisions grew 82 per cent over the period to €8.18 million. For the six months to the end of September the firm's international revenues grew to €1.25 million, up from €0.52 million over the same period a year earlier.

Mr Foley said the company had recently secured Irish Financial Services Regulatory Authority approval under the new Markets in Financial Instruments Directive (MiFID).

This approval gives the group a "harmonised regulatory framework with which to expand its business internationally," he said.

In London at 9.45 am shares in Worldspreads were trading at £0.62 up almost 6 per cent on the day but off year highs of £1.13 at the end of May. At today's share price the company has a market cap of £24.41 million (€30.61 million).