FNG Exclusive… FNG has learned via regulatory filings, as well as from discussions with company officials, that Retail FX, CFDs, and spreadbetting broker ETX Capital had a very up and down two years in 2019 and 2020, mirroring the state of the UK and EU forex industry during that time frame.
Following the FCA’s and ESMA’s limiting of leverage for retail traders to 30x in late 2018, London based ETX Capital saw revenues fall by 34% in 2019, coming in at £21.4 million versus £32.3 million in 2018. The company was able to trim some costs, but the drop in revenue resulted in a loss of £2.6 million for 2019, versus a net profit of £1.9 million the prior year.
However we understand that the company’s fortunes – like at many of its Retail FX peers – improved markedly in the just finished 2020 year, with revenues back up about 50% from 2019, putting them back close to what they were in 2018, at about £32-33 million. We also understand that the company returned to profitability in 2020.
ETX Capital, which is operated by FCA regulated Monecor (London) Limited, was acquired during the course of 2020 by Swiss fintech investor Guru Capital SA, run by former Swissquote FX executives Ryan Nettles and Luca Merolla.
ETX Capital has been branching out into different areas of finance since the Guru acquisition. As was reported exclusively by FNG, ETX Capital entered investment banking and started brokering a number of capital raisings for small to mid cap publicly traded companies, most recently for Online Blockchain plc.
The company has also been reshaping its management ranks and board, hiring Dan Gladding as Chief Risk Officer, former FXTM exec Nandik Barbhaiya as CMO, and adding venture capitalist Saurabh Sharma to the ETX board.
Phil Adler, CEO of ETX Capital said to FNG about the results:
“2019 was the first full year of the new ESMA regulatory regime which, combined with sustained low volatility was financially challenging for all UK firms including ETX Capital as seen in our 2019 financial results.
In 2020, despite a challenging year due to COVID-19, we have been able to successfully optimise areas of our business in order to scale more efficiently – we see our revenues over 50% higher compared to 2019 and a return to profitability. In addition, we have been further energised due to the purchase of the business in Q4 2020 by Guru Capital. We look forward to continuing to deliver value to our clients in 2021.”