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GAIN Capital Registers Increase in Q3 Forex Volumes, Profitability

GAIN Capital, the US securities giant behind Forex.com, has just announced its results for the third quarter of the year, with robust rises recorded in institutional and retail trading volumes, along with revenues and profits.

 

For the three months to the end of September 2013, the retail over-the-counter trading volumes amounted to $394.8 billion, a rise of 42% against $278.7 billion recorded a year ago. Institutional trading volumes also staged a rise – they went up by 79% year-on-year to $901.3 billion. The latter is not a surprise, given the strong emphasis of the group's business model on the institutional segment. The set of solid operational metrics was completed with the reading for total retail client assets – they rose by massive 60% year-on-year to $684.1 million.

 

The financial results are in tune with the ones from operations, with net profits for the third quarter reaching $4.7 million, 42% higher than a year ago. Net revenues for the same period were also good at $60.6 million, staging a jump of 52% from levels seen in the equivalent period in 2012.

 

GAIN Capital attributed the successful performance to improved market environment in the retail sector and the robust performance of the GTX institutional platform. GAIN Capital's chief executive Glenn Stevens underlined the importance of GFT's acquisition for the corporate performance and the growth of clients using GTX.

 

Apparently, the leading broker has what to be proud of: it continued its successful performance for a further quarter. By the way, this is hardly a surprise to those of you who have noticed how GAIN has outpaced its US rivals recently. 

 

You can find Forex.com's full report below.

 

BEDMINSTER, N.J., Oct. 31, 2013 /PRNewswire/ -- GAIN Capital Holdings, Inc. ("GAIN") (NYSE: GCAP), a leading global provider of online trading services, reported significantly higher results for the three months and nine months ended September 30, 2013.

 

"This was another strong quarter for GAIN. Our results demonstrate the success of GAIN's organic and acquisition growth strategies. Retail OTC trading revenue increased 48%, benefiting from an expanded array of products and improved market conditions. In our commission business, revenue rose 133%, and accounted for 21% of total net revenues, thanks to the double-digit growth of our GTX institutional platform and the acquisition of our futures business in late 3Q12. Profitability significantly outpaced revenue growth, despite year-to-date restructuring and acquisition-related expenses of $1.8 million, demonstrating the operating leverage inherent in our business," said Glenn Stevens, CEO of GAIN Capital.

 

"We believe GFT is a transformational acquisition for GAIN. It provides substantial scale, new partnerships in OTC trading, significantly expands our non-forex product offerings, and broadens the customer base for our GTX platform. Additionally, GFT deepens our global footprint, with an increased presence in key European, Middle Eastern and Asian markets. Integration is well underway, and we remain on track to achieve $35 million to $45 million of expected expense synergies over the next 12 months," Mr. Stevens concluded.

 

Third Quarter Metrics

 

(Comparisons below are referenced to third quarter 2012)

Net revenue of $60.6 million, up 52% from $40.0 million; including $2.8 million of GFT revenue

Adjusted EBITDA* of $12.0 million, up 90% from $6.3 million

Net income of $4.7 million, or $0.12 per diluted share, up 42% from $3.3 million, or $0.08 per diluted share

Adjusted net income* was $5.1 million, or $0.13 per diluted share1

Retail OTC trading volume of $394.8 billion, up 42% from  $278.7 billion

Institutional trading volume of $901.3 billion, up 79% from $503.6 billion

Futures Daily Average Revenue Trades (DARTs) of 12,483

Total retail client assets of $684.1 million, up 60% from $426.6 million

 

Year-to-date highlights

 

(Comparisons below are referenced to the nine months ended September 30, 2012)

Net revenue of $183.4 million, up 54% from $118.9 million

Adjusted EBITDA* of $47.3 million, up 188% from $16.4 million

Net income of $26.2 million, or $0.67 per diluted share, up 309% from $6.4 million, or $0.16 per diluted share

Adjusted net income* was $27.5 million, or $0.71 per diluted share2

Retail OTC trading volume of $1.3 trillion, up 30% from $1.0 trillion

Institutional trading volume of $2.9 trillion,  up 102% from $1.4 trillion

 

Retail OTC trading business

 

In the third quarter of 2013, GAIN's retail OTC trading business generated revenue of $50.9 million, compared with $34.3 million in the third quarter of 2012. Total trading volume was $394.8 billion, compared with $278.7 billion a year earlier. Total funded accounts totaled 131,068, compared with 82,411 a year earlier.

 

Commission business

 

GAIN's commission-based business, which comprises the GTX institutional and exchange traded futures businesses, generated total revenue of $12.7 million, compared with $5.4 million in the third quarter of 2012.

GTX revenue was $6.9 million in the third quarter, compared with $4.2 million in the third quarter of 2012. GTX trading volume was $901.3 billion, compared with $503.6 billion a year earlier.

The futures business, which was acquired on August 31, 2012, generated revenue of $5.8 million in third quarter, compared with $1.2 million in the third quarter of 2012. Third quarter 2013 DARTs were 12,483.

 

About GAIN Capital

 

GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of online trading services. GAIN's innovative trading technology provides market access and highly automated trade execution services across multiple asset classes to a diverse client base of retail and institutional investors.

 

GAIN's businesses include FOREX.com, which provides retail traders around the world access to a variety of global OTC financial markets, including forex, precious metals and CFDs on commodities and indices; GTX, a fully independent FX ECN for hedge funds and institutions; OEC, an innovative online futures broker; and GAIN Securities, Inc. (member FINRA/SIPC), a licensed U.S. broker-dealer.

 

GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe and the Asia Pacific regions.  For further company information, visit www.gaincapital.com.

 

TAGS: forex.com  forex.com broker  gain capital  gain capital forex  gain capital q3 2013  forex results  q3 2013  forex volumes  retail fx volumes  commissions  gain capital revenues  profits 

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