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TechFinancials slides as trading platform revenues dive by 70%

By Duncan Ferris

Date: Tuesday 18 Jun 2019

TechFinancials slides as trading platform revenues dive by 70%

(Sharecast News) - TechFinancials' shares plummeted on Tuesday after the company swung to an annual loss as revenue from its trading platform dropped by 70%.
The Fintech service provider, which operates its 51%-owned business-to-consumer trading platform DragonFinancials, incurred in a loss before tax of $5.0m for 2018, compared to $0.6m of red ink for the year before.

Overall, sales were 42% lower at $7.8m, while trading platform revenues dropped by 70% to $2.7m as the business suffered on the back of tighter regulations.

The AIM traded company had cash and cash equivalents of $1.7m at the end of the year, down from $3.5m at the same point 12 months earlier, with its financial performance negatively impacting its cash flow.

Christopher Bell, non-executive chairman said: "We have dealt with the impact of regulation through growing new revenue streams by way of the simplified forex platform, mobile trading solutions and the add-on contract for difference platform. What has been particularly important is the growth observed in revenues from blockchain related technologies which have grown fifteen fold to $3.8m, representing almost 50% of 2018 revenues."

Blockchain-related ventures that TechFinancials is currently invested in include its sports venue ticketing subsidiary Footies Tech and blockchain-based global diamond exchange CEDEX, in which it holds a 2% interest with an option for a further 90%.

Post period end, the AIM traded company was forced to cancel the sale of its non-core loss-making subsidiaries BOT and MarketFinancials Limited after the prospective buyer failed to secure the relevant regulatory approvals.

A new sales agreement has been entered into for the disposal of MarketFinancials for €100,000, but the deal remains subject to approval from the subsidiary's regulator, the Seychelles Financials Securities Authority.

TechFinancials' shares were down 25.33% at 4.56p at 1604 BST.

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