Trading 212 revenue tops 2021, but bottom line disappoints
Per its filing with the UK companies house, Trading 212 UK said revenue from online trading rose to £98.7 million in the fiscal year ending December 31, 2022, up five percent compared to £94 million a year earlier.
The mild increase in revenue was, however, offset by higher operational costs, which jumped by 15 percent during the period. Amid increased staff costs and other expenses involved in upscaling the business, the operational expenses were reported at £49 million in FY 2022 compared to £42 million the previous year.
As a result, the UK business of Trading 212 earned £41 million in net profit, down from the £45 million it booked in 2021.
Trading 212 has seen incredible levels of growth over recent years. Revenue has grown from £2 million in 2019 to £54.3 million in 2020, and then to £94.1 million in 2021, while profit/(loss) after tax has improved from (£0.3 million) to £21.9 million, and then £45.3 million over the same time.
Net assets have also increased during this time due both to the retained profit in the business as well as a £20 million share capital injection. Net assets now stand at £120 million, up from £95.8 million at the end of 2021.
Other business highlights
Trading 212 was the first retail UK broker to offer commission-free trading and its core product portfolio consists of stocks, ETFs, FX, and derivatives products.
For the stock trading business, the company operates a zero-commission model where clients do not pay commission for trading nor custody fees for the assets held. Instead, T212 earns fees from clients when they trade in a currency different to that in which their cash was deposited, and through a collateralised stock lending program.
While operating both a CFD and a stockbroking platform, T212 continues to shift focus towards stockbroking with the growth strategy delivering increases in client money and asset balances.
Trading 212 has recently made a series of changes to its management structure following the departure of two key players, Raj Somal and co-founder Borislav Nedialkov.
Outside of the UK entity, and following Brexit, Trading 212 revealed that it plans to transfer some of its clients around the group. This will see the UK entity transferring circa 14% of its clients (all being EU clients) to the new Cyprus entity by the end of 2023, while the Bulgarian entity will also be transferring its client to either the Cyprus or UK entity.
