Capital Index (UK) Sinks into Loss in 2021 as Market Volatility Vanishes

Mar 30, 2023

The broker reported a pre-tax loss of £300,389.

It changed its management at the end of last year.

Capital Index (UK) Limited, a London-based CFDs trading and spread betting broker, ended 2021 with a turnover of £1.7 million. The number decreased by more than 29 percent when compared to £2.44 million generated in the prior year.

Additionally, the broker sank into an operating loss of £286,889 from a gain of £122,150 in the previous year. Considering interests and other expenses, the company’s pre-tax loss for the year came in at £300,389 from a profit of £108,650 generated in 2020.

The net loss, after a tax credit, came in at £238,796.

“2021 was a challenging year for the company,” the latest Companies House filing of the broker added.

“The company has coped well with the operational difficulties associated with the pandemic, but a lack of volatility compared with the previous year cut into expected revenues and difficult decisions had to be made.”

Another London-Based Broker

Capital Index’s offerings include CFDs and spread bets for FX, indices, commodities and bonds. The numbers are only for the businesses generated by the broker’s UK subsidiary, which is a wholly-owned subsidiary of Capital Index (Cyprus) Limited. However, the company voluntarily renounced its Cypriot license in 2018.

The company primarily earns its revenue from the transactional spreads of trading. Thus, the decline in revenue shows that trading volume on the platform declined significantly, though it did not release those metrics.

In a previous filing, Capital Index revealed its plans to launch a proprietary trading platform by the third quarter of 2021 for generating a new revenue stream. However, that did not materialize as the broker is still offering services with MetaTrader 4.

Now, to take the business on the path to profitability, the company onboarded a new management team at the end of 2021 and highlighted that “plans are in place to grow revenues with new initiatives.”

“The Directors are satisfied that the Company continues to be a going concern and with the changes already made to the organizational structure coupled with the return of volatility in the markets, return to profit in 2022,” the filing added.