TechFinancials sells its holding in MarketFinancials as exit from binary options-related ops continues

Maria Nikolova

The total consideration for MarketFinancials, a provider of market maker services and risk management to B.O. Tradefinancials, will be EUR 100,000.

Less than a year after B.O. Tradefinancials, a binary options business owned by TechFinancials Inc (LON:TECH), said goodbye to its Cypriot license, TechFinancials announces the sale of its holding in an entity related to B.O. Tradefinancials.

In a filing with the London Stock Exchange today, TechFinancials says it has entered into legally binding, conditional Share Purchase Agreement with Cypriot company Proverial, to sell its holdings in MarketFinancials Limited. Until February 28, 2018, MarketFinancials was the provider of market maker services and risk management to B.O. Tradefinancials (BOT). MarketFinancials’ only source of income in 2018 was derived from the provision of market maker and risk management services to BOT and, as a consequence of the cessation of BOT’s activities, MF has not traded since the end of February 2018.

As at end-June 2018, MarketFinancials had net assets of approximately US$88,600 and was held on the balance sheet of the Group at nil carrying cost. For the year to December 31, 2017, it made a net profit of approximately US$45,600.

The total consideration for this subsidiary will be EUR 100,000, subject to any closing balance sheet adjustments.

During the first half of 2018, tighter regulation continued to impact TechFinancials’ traditional business throughout markets across the world, including Asia.With regards to the TechFinancials’ B2C joint venture in the Asia Pacific region, DragonFinancials, this business also registered a sharp decline in both revenue and profit, primarily due to the tightening of regulations. Net profit from DragonFinancials, in which TechFinancials holds a 51% stake, decreased by 87% to US$ 0.27 million. No dividends were paid by DragonFinancials to TechFinancials for the period.

The Group’s turnover in the first six months of 2018 decreased to US$ 3.78 million compared to US$ 6.97m million in the equivalent period a year earlier. Revenues in the core software licensing business on a standalone basis decreased by 70% to US$ 1.07 million from US$ 3.58 million, mainly due to the stricter regulation in the industry that continued to reduce trading volumes, and the termination of customers’ agreements and a reduction in the license services provided to DragonFinancials. The trading platform revenues decreased by 59% to US$1.56 million from US$ 3.77 million in the first half of 2017.

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