Worldspreads profit rises 81%

Worldspreads, the Dublin-based spread trading company said net profits rose 81 per cent last year as the number of customers betting on stock, commodity prices, currencies and interest rates increased.

In a statement Worldspreads said net income grew to €1.9 million ($2.9 million), or 5.4 cents a share, in the year to March 31st, up from €1.05 million, or 6.3 cents while pre tax profits rose to €3.5m. Sales increased by 87 per cent to €12.3 million.

The company said profit was boosted by the opening of a derivatives unit during the year. Increased market volatility spurred more gamblers to open accounts, enabling the company to predict better-than-forecast annual earnings when it reported a doubling of first-half profit in November. 

Spread trading works by paying the person who places a bet for every point by which the market being wagered upon deviates from a specified range. They can also lose money if the markets move contrary to their bet.

The company was set up by Conor Foley and Brian O'Neill eight years ago and has offices in London and Athens, and joint ventures in Spain, Germany, Austria, Hungary and South Africa. Worldspreads joined the junior market IEX on May 15th.

Mr Foley said the advances in its financial spread betting product have not been repeated in sports which had reported a disappointing year. 

He said sports revenues for the year were €1.6 million, representing 13 per cent of total group revenue, down from f €2.3 million or 35 per cent of in the comparable period last year.

Mr Foley said sports spread betting industry appears to have fallen behind financial spread betting in terms of popularity and that a decision on the future of this division will be made in August.

Despite the turmoil in world markets Mr Foley said the company remained confident that it would continue to expand into "selected international markets within the EU and beyond".

Worldspreads fell 1.5 pence, or 1.3 per cent, to 111.5 pence in London trading yesterday. The shares cost 47 pence each when they were first sold to investors last August and have advanced 36 per cent in 2008.

Additional reporting Bloomberg