Spreadex profit slumps by a fifth for fiscal year
Privately owned spread betting operator’s full-year turnover climbs 3% year on year to £71.2m
Spreadex has recorded a 21% fall in pre-tax profits for its financial year ending 31 May 2022, according to accounts supplied to Companies House.
The St Albans-based firm generated £27.7m in profit before tax, down from £35.1m achieved in the previous financial year. Profit after tax also slid 21% from £28.5m to £22.5m.
Turnover rose almost 3% from £69.2m to £71.2m, however administrative expenses jumped 38% to £36.1m.
Its balance sheet “remains strong”, the firm said, with net assets of £96.8m, while dividend payments during the financial year amounted to £12.5m compared with £25.1m for the prior 12-month period.
Spreadex, which employed an average of 155 people during the year, paid out £13.6m in wages and salaries – broadly in line with 2021.
On its fiscal 2022 performance, the company wrote: “After a record year in 2021, supported by some non-occurring external factors, profit reduced year on year as we also invested in the foundations required for long-term growth plans.”
These external factors were said to be “additional sporting fixtures due to pandemic-related delays and increased share of clients’ discretionary leisure spend during Covid-19-related lockdowns and restrictions”.
Spreadex continued: “We have invested in the business, most significantly in marketing, via branding and sponsorship activity (Burnley in the Premier League and Fulham in the Championship) and via other direct paid marketing channels.
“While this change in emphasis has resulted in additional in-year costs, we have seen positive early signs on the potential payback of this investment.”
The privately owned firm has also embarked on a “significant drive” to recruit software developers and business analysts to improve productivity and efficiencies going forward.
Earlier this year, David MacKenzie was appointed CEO as part of a management reshuffle.
Later, in August, Spreadex agreed to a £1.36m settlement with the UK Gambling Commission (UKGC) over failings regarding its social responsibility and AML policies. This related to a period before MacKenzie assumed the top job.
On the settlement following the conclusion of UKGC’s investigation, which included a “two-day virtual assessment” of the business, Spreadex said: “The Commission noted the swift and robust action we’ve since undertaken, and they have imposed no conditions, or follow up actions post the completion of the review.”