Marketspreads says business grew 27% in last period despite suspension

PROFITS AT financial spread trading firm, Marketspreads, topped €900,000 in its last financial period, which included the time during which the Central Bank suspended its operations in April.

The company last week appointed Enrique Curran as chief executive. Mr Curran, a former Merrion Capital analyst, and his father, Ray, are key shareholders in the business.

Marketspreads is due to file accounts for the 16 months ended April 30th, which will show that revenues reached €6.7 million, compared with €3.95 million during 2010. Operating profits reached €917,000, up from €214,000 in 2010.

Taking into account that it is comparing 16 months of trading with 12, the company says that, on a pro-rata basis, its business grew 27 per cent during the period ended April 30th, which will mark the end of its financial year in the future.

Mr Curran formally takes over as chief executive this week with the approval of the Central Bank, which regulates spread trading firms.

At the weekend, he said trading levels have recovered 100 per cent since the company’s suspension, and the majority of its customers, including its largest clients, have returned.

He pointed out that their other options would have been to open accounts with British-based spread trading firms and that they instead chose to remain with the Irish company.

“A lot of them have told us that they would prefer to give their business to an Irish company,” he said.

The Central Bank suspended Marketspreads for three weeks in April, citing concerns over audit and capital adequacy issues.

The problems dated back to 2009, before the current owners and management took over the business from Worldspreads, which itself ceased trading in March.

The current board had to restate profits for the 12 months ended March 31st, 2009, to €1.5 million from €4 million and reduce net assets and retained earnings by €6.7 million to €1.1 million.

Through 2011 the current board discovered a series of irregularities, including the fact that former directors Brian O’Neill and Fergus Rice, who led the buyout from Worldspreads, diverted €1.4 million from another business in which they were involved, Sportspreads.

Both men have since left the company.

The company subsequently provided 2010 accounts, which were given a clean bill of health by the auditors, and Ray Curran converted a €2.4 million loan to the company to preference shares, to fulfil the Central Bank’s capital adequacy requirements.

The bank’s regulators gave Marketspreads the green light to restart trading in the last week of April.

Mr Curran said the business recovered from the suspension and returned to normal trade quickly. He added that the company now plans to consolidate its position over the coming months, before looking for growth opportunities.