Capital Index UK, an established London-based forex and CFD brokerage, has revealed a significant drop in its 2023 revenue, which the company attributes to the ongoing cost-of-living crisis affecting the UK. The firm reported that its trading revenue for the year stood at £1,035,073, marking a 29% decline from the previous year’s £1,463,501.
Improved Trading Profit Margin
Despite the drop in revenue, Capital Index UK’s trading profit margin saw a notable improvement, increasing to 93% in 2023 from 77% in 2022. The firm also reported cash and cash equivalents totaling £240,305 as of December 31, 2023, down from £315,471 at the end of the previous year.
However, the company experienced deeper losses, reporting a net loss of £256,045 for the year, compared to £201,638 in 2022. As a result, Capital Index did not issue any interim dividends, and no final dividend was recommended by its directors.
Challenges and Future Outlook
In its financial report, Capital Index emphasized the impact of the UK’s cost-of-living crisis on its business, noting a reduction in both client numbers and trading activity. However, the company remains optimistic, anticipating that revenue will rebound in 2024. Alongside plans for cost-cutting measures, the directors expressed confidence in a potential return to profitability.
“The cost-of-living crisis in the UK has continued to affect client numbers and trading volumes,” the company noted. “However, we are optimistic that revenues will increase in 2024, supported by a reduction in overhead costs, which could pave the way for profitability.”
Looking Back at Previous Reports
This year’s decline follows a 14% drop in revenue in 2022, making it the third consecutive year of reduced earnings for the firm. In 2022, the company generated £1.46 million in revenue, down from £1.71 million in 2021 and a significant decrease from the £2.44 million posted in 2020.
Capital Index reported a net loss of £202,000 for 2022, which was slightly lower than the £239,000 loss in 2021. Additionally, clients’ funds held by the company fell dramatically to £3.6 million by the end of 2022, a steep decline from the £5.5 million held in 2021.
In 2021, the broker saw a 29% drop in turnover, recording £1.7 million in revenue compared to £2.44 million in 2020. The company also reported a pre-tax loss of £300,389 for that year.
