Exclusive: BUX UK sees Revenues halved in 2021, posts £4M loss as Brexit hits results
FNG Exclusive… FNG has learned via regulatory filings in the UK that BUX Financial Services Limited, the London based FCA regulated arm of Netherlands domiciled neobroker BUX, saw a significant decline in activity in 2021, which the company attributed to a number of reasons.
Overall, Revenues at BUX UK fell by 49% in 2021, £9.2 million versus £18.0 million in 2020. The company posted a net loss of £4.2 million for 2021, versus a breakeven result (£55K net loss) the previous year.
Less than 10% of BUX UK’s revenues actually came from UK clients (i.e. £861,000), with the remainder coming from “rest of the world”.
Client funds held by BUX UK fell dramatically by 84% during the year, £5.8 million at year-end 2021 versus £37.1 million in 2020.
BUX UK said that FY 2021 was again dominated by the pandemic which impacted the firm’s operations and client trading behaviour. Equity market gains benefited clients and volatility only came back in the fourth quarter. Unfortunately, due to external circumstances described below the overall revenues have dropped to £9,199,042 turning the overall result into a loss of £4,206,954.
In Q1 the firm stopped all EU marketing and onboarding activities to comply with regulatory requirements resulting from Brexit. While this has had a sizable impact on revenues, the customer base has been engaged and loyal thus limiting attrition.
In Q4 the firm completed the migration of its full EU resident client base to a newly acquired group entity based in the EU, which meant a reduction in the direct revenues in Q4 and going forward. The firm is however the trading counterparty for this new entity and will retain a significant part of the indirect revenues.
Following the lifting of the Covid restrictions, the firm has encouraged its staff to return to the office on a regular basis, testing out the new hybrid model in Q3 before again abiding by government working-from-home guidelines in December. Overall, the directors are satisfied that the remote/hybrid model works flawlessly. A new CEO, Salim Sebbata, has taken over from Yorick Naeff in Q3 and overall staffing levels have been flat in the expectation of a reactivation of marketing activities and launching of new revenue generating initiatives.
The company is looking to relaunch marketing activities for its flagship BUX X (since rebranded as Stryk), as well as its CFD and financial spread betting product, in the very near future and is planning to hire a full growth marketing team to be based in the UK.
The key decision and project undertaken in 2021 was the full set up of a group office in Cyprus and migration of applicable client accounts. This allowed the company to retain and service its client base.
BUX UK’s income statement and balance sheet for 2021 follow.