TradeTech Revenue Drops as ESMA, Low Vol Bite

PlayTech, the owner of retail brokerage group TradeTech, released its financial results for the first half of 2019 on Thursday.

The report provides some insights into TradeTech’s own financial performance. Based in London, the group operates retail broker Markets.com, liquidity provider CFH Clearing and acts as a technology provider.

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Over the first half of this year, those three firms were able to raise revenue of 39.1 million euros ($43.3 million). That was compared to 52.3 million euros ($58 million) in the first half of last year.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) were equal to 8.1 million euros ($9 million) this year, as opposed to the figure of 25.2 million euros ($27.9 million) that the group reported in 2018.

Markets.com pivoting to pros

In its report, PlayTech attributed this decline in revenue to a mixture of regulatory impact – from the European Securities and Markets Authority – and a sustained period of low volatility in the first quarter of this year.

The decline in revenue was more prominent in TradeTech’s B2C segment than its set of B2B operations. Revenue in B2C was down by 65 percent on a year to year basis, compared to a 12 percent decline in its B2B operations.

Having said that, the group said that revenue from TradeTech’s white label and turnkey solutions declined by 70 percent.

In a video presentation on Thursday morning, PlayTech CEO Mor Weizer said that Markets.com had made a decision to pivot towards higher-end clients via its Marketsx service.

Launched quietly in June, the broker is marketing the new offering as a “VIP Service.” Weizer noted that, despite only launching a couple of months ago, the broker is starting to see more professional clients depositing more money into their accounts.

“The company is making a shift towards a smaller number of more sophisticated clients,” said Weizer.

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