The UK subsidiary of the Pepperstone global brokerage group has reported a high increase in its revenue and profits for the financial year ending 30, June.
Based on the report, there was a surge in the number of clients from about 5,200 in 2019 to 7,650 in December 2020.
It also showed that retail and professional clients increased their participation on the platform, as profit reached £12.7 million compared to the £6.8 million recorded last year. This represents an 86% increase on a year-on-year basis.
Pepperstone excelling after Brexit
Based on the report, the broker carried out certain implementations to improve its systems and operations. This has helped the broker improve on its revenue and profit levels.
Additionally, the parent company is partnering with its UK subsidiary to accumulate the full raw spread on its hedged deals. The move has also impacted positively on its revenue.
So, despite the lower volumes recorded for the year, the company has succeeded in recording higher revenue.
Apart from the deal with the parent company, Pepperstone has also partnered with two European licensed subsidiaries in Cyprus and Germany. The partnership will help the broker maintain its European business link even after Brexit.
The brokers kicked off its operations four months after it received a license from German regulator BaFin.
The Pepperstone brand has been growing abroad. It has secured financial services licenses in Dubai and entered the Kenyan forex trading market.
With these developments, the Australian headquartered firm seems to have made adequate preparation for its UK subsidiary for the Brexit.
A positive impact on pre-tax profit
Pepperstone Limited provides clients trading services with CFDs and leverage forex. The broker gets its revenue from spreads and commissions, especially via spread bets, CFDs, and spot FX. The company doesn’t have traded market risk.
The increase in revenue has also had a positive impact on its pre-tax profit. According to the report, Pepperstone U.K. generated a pre-tax profit of 140% higher than its previous yearly revenue. The company reported a pre-tax profit of £3.2 million in the previous year but managed to hit £7.7 million in the 2020 financial year.
Also, the profit is a reflection of both the revenue increase and the lower sales costs. The report shows that the broker had a net profit of £6.27 million after taxes were deducted.
Pepperstone has enjoyed an eventful year in 2020, especially in terms of internal advancements and macroeconomic reasons.