Gain Capital managed to increase its net profit by 83 percent to £32.5 million in 2020 due to high market volatility after a heavy loss in 2019.
Gain Capital UK Limited, a subsidiary of the StoneX Group, has reported its financial data for 2020, ending 31 December, with a net profit of £32.5 million. The British company ended 2020 with a gross profit margin of 83%, an increase from the previous year of 55%.
This extraordinary income was achieved due to the increase in trading activity following high market volatility. This result makes a dividend payment of £60m in 12 months to its parent company, Gain Capital Holdings.
Gain Capital, which oversees brands such as Forex.com and the City Index brand, was acquired by StoneX Group in mid-2020 for $236 million.
Following the completion of the Gain Capital acquisition on 31 July 2020, planning began with an internal reorganization of a group of companies, including the transfer of the Gain Capital UK business.
Record High after Heavy Loss in 2019
Interestingly, the gains come a year after the company suffered heavy losses in 2019. In contrast to conditions in the previous year, the COVID-19 pandemic created significant volatility across financial markets, pushing the company to record highs in terms of client acquisitions, active clients, and trading volume.
This can be seen in Gain Capital's revenue which posted more than £90 million in 2020, compared to £16.43 million in 2019. In fact, after being acquired by StoneX, this figure continued to grow in the first quarter of 2021 when Gain made $71.2 million from StoneX's $471.4 million.