Pepperstone
Limited, the UK subsidiary of Australian foreign exchange group Pepperstone,
reported a profit of £9.9 million for the fiscal year ended June 30, 2024 (FY24),
down slightly from £10 million reported a year ago.

Pepperstone UK Reports
Slightly Lower Net Income, Higher Revenue in FY24

The
UK-based contract for difference (CFD) and spread-betting provider maintained
robust profitability despite a minor decline in trading revenue, which
fell 6.3% to £13 million from £13.9 million in the previous year. The
company offset this decrease through growth in other income streams,
particularly interest income, which surged nearly fourfold to £944,656 from
£240,484 a year earlier.

According
to the company’s annual financial report filed with Companies House, the total
other income reached £13.2 million, up 19.2% from £10.5 million in fiscal 2023,
largely driven by increased income from services provided to other entities
within the Pepperstone group. This pushed the company’s total revenue to £25.3
million, representing a 4.6% increase over the previous year.

“The
Company has been consistently profitable since it started operating in 2017,”
the directors stated in their report.”

The company recently made two key personnel changes, promoting Mariia Erokhina to General Manager of Information Security and Compliance, and appointing FP Markets’ Kim Reilly as Head of Client Experience.

£6.3 Million Dividend

During the
year, Pepperstone Limited declared and paid a £6.3 million dividend, the first
such distribution since at least 2022. Despite this significant outflow, the
company’s cash position strengthened to £35.4 million from £29.3 million a year
earlier, with £8.4 million held as the company’s own cash and the remainder
representing segregated client funds.

“During
the year the Company launched 212 new trading symbols across various asset
classes taking the total number of products offered to in excess of
1,400,” the directors stated in the strategic report.

The broker,
which operates under Financial Conduct Authority regulation , continued to
expand its workforce with average employee numbers increasing to 28 from 27 in
the prior year. Employee expenses rose significantly by 35.3% to £3.8 million
from £2.8 million, reflecting both the expanded headcount and higher
compensation per employee.

Consumer Duty

Pepperstone’s
directors highlighted the implementation of the Consumer Duty regulatory
requirements early in the period, noting that “the Board continues to
actively discuss and monitor its arrangements, along with the results from its
periodic assessments, to ensure ongoing adherence of the expected
standards.”

The company
maintained a strong capital position throughout the year, with regulatory Tier
1 capital of approximately £11 million. As of June 30, 2024, Pepperstone
Limited reported a capital adequacy ratio of 414% and a liquid asset ratio of
952%, well above regulatory requirements under the UK’s Investment Firms
Prudential Regime (IFPR).

Pepperstone
Limited’s total assets increased by 7.9% to £54.9 million, while net assets
grew by 21% to £21 million compared to £17.3 million a year earlier, with total
shareholder funds reaching £21 million.