Broker Valutrades faces financial turmoil in 2023
Broker Valutrades faces financial turmoil in 2023
Valutrades, the FCA-regulated FX and CFD broker, has suffered a severe financial setback in 2023, in stark contrast to its successful 2022. The company, which saw revenue grow by 47% to £6.5m in 2022, saw a steep 77% drop in 2023, when revenue fell to just £1.5m.
This sharp decline resulted in a substantial loss of £3.8m, wiping out the majority of shareholder equity, which fell from £4.7m to £1.7m by the end of the year.
The collapse in Valutrades' financial performance can be attributed to several factors. The company described 2023 as a “challenging year”, citing market volatility confined to large ranges, which negatively impacted its internalization of trading. In addition, many clients have shifted their focus to more dynamic markets such as equities, which have experienced an upturn, making forex and CFDs less attractive.
Significant losses have also led to a reduction in retail client funds held by Valutrades, falling from £3.4m in 2022 to just under £2.0m at the end of 2023. In response to these financial challenges, Valutrades took cost-cutting measures, including the dismissal of several senior managers and staff. Notable redundancies included head of dealing Samin Aref Zaher, who moved to SGX CurrencyNode, head of business development Lauren Connor and finance director Liam Bonfield.
Despite the setbacks, Valutrades remains committed to its long-term strategy, emphasizing that it understands the cyclical nature of the markets in which it operates. The company expects difficult years to be balanced by more prosperous ones over time. In the short to medium term, Valutrades plans to focus on growth rather than immediate profitability.
A significant contributing factor to the slowdown in business in 2023 was a year-long project to upgrade the core technology of Valutrades' client area. The benefits of this upgrade, including a new website and client area, only became available in December. Nevertheless, the company reports positive initial feedback and believes the updated system has paved the way for the launch of a new native mobile app in 2024, along with improved customer interaction tools.
Valutrades said its current business strategy, in place since 2016, has consistently met expectations. The firm intends to continue to invest in technology, people and business relationships, which it believes will ultimately lead to improved profitability. The firm's shareholders remain supportive, committing to reinvesting profits and contributing business expertise and infrastructure investments. They expressed full support for Valutrades' 2024 plans and optimism about the company's future.
Under the leadership of CEO Graham Watkins since 2015, Valutrades continues to offer forex, CFD and commodities trading services to clients through the Metatrader4 and Metatrader5 platforms, as well as FIX API connectivity. The London-based company is controlled by Indonesian investors Aman Lakyani and Anil Bahirwani.
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