Sucden Financial sees Revenues drop 9% in 2020 to £53.9M
FX and CFDs execution and clearing broker Sucden Financial has reported its financial statements for 2020, indicating that the company did not fare nearly as well as the many retail brokers which it services.
In a year which saw a retail financial trading boom worldwide, Sucden reported that its revenues dropped by 9%, from £59.1 million in 2019 to £53.9 million in 2020. Profitability was hit even harder, with Sucden eking out a net profit of £1.6 million in 2020, down from £16.1 million the previous year.
One issue which hit the bottom line hard for Sucden was an £11.5 million write-off for bad trade debtors (versus just £211,000 the previous year). A diversified Commodity Merchant operating out of the UAE experienced short term liquidity issues related to their physical commodity operations, and subsequently was unable to meet its margin calls. Its parent company then filed for liquidation impacting a wide community of stakeholders in the financial services sector, including Sucden. During the year the creditors’ appointed liquidator worked to identify realisable assets, hampered by the restrictions due to COVID-19 and offices being closed. The latest report from the liquidators was extremely pessimistic on any meaningful recovery. Due to this update Sucden considered the fair value of the debt should be written down to zero as at the Balance Sheet date.
Since year-end Sucden has addressed some of its growth issues, recently hiring an entire FX sales and trading team from StoneX.
Marc Bailey, Chief Executive Officer of Sucden Financial Limited, commented on the results,
“Our investment in technology enhancements and business development over the last year are yielding very positive results. 2021 is proving to be a much stronger year, following challenging operating conditions in 2020, and we welcome the LME’s announcement that it intends to reopen the ring on 6 September.”
Sucden Financial acts principally as broker and dealer. It is a ring dealing member of the London Metal Exchange (“LME”) and is also a member of both the Intercontinental Exchange and Euronext Paris. The company is authorised and regulated by the Financial Conduct Authority.
The company operates subsidiaries in Hong Kong and USA and a representative office in Russia. The subsidiary in Hong Kong acts as an introducing agent for the company. The subsidiary in the USA receives and transmits orders from customers to the company.
Sucden provides execution and clearing services for exchange traded products, CFDs and OTC FX and Bullion products. The company has structured its business into two main business lines:
The company is a leading provider of derivative brokerage services providing access to a broad range of markets covering both exchange traded and OTC instruments across Commodities, FX, Precious Metals and Fixed Income products. The company has a diverse global customer base that ranges from large investment banks and funds to a variety of corporates.
As the company is a Ring Dealing Member of the LME it makes markets in Base Metals products predominantly to its corporate customer base. It also makes markets in FX, predominantly for its corporate customer base and has a small proprietary trading unit.
Sucden Financial’s 2020 income statement follows: