Small Talk: WorldSpreads takes a gamble to boost business
Monday 13 September 2010
'When you go into Tesco, you don't just buy a loaf of bread and a pint of milk, do you?" asks Conor Foley, the chief executive of WorldSpreads, the Alternative Investment Market (Aim)-listed financial spread-betting group. Indeed not. And Mr Foley is hoping that the same philosophy applies to his industry after last week announcing that his group would be offering punters a zero-spreads option on some of its most popular markets.
The savvy spread better might be forgiven for thinking that this may not be the wisest of business strategies, especially as Mr Foley concedes that he will not be making any money from the move. The clever bit, he hopes, is that as clients come into play the popular, zero-spreads markets, so they will be attracted to the higher-yielding ones.
"In our experience, most clients trade a range of markets. While we expect many new clients to trade [on the zero-spread] markets, we do expect they will also trade on the other 2,000 markets we offer at normal spreads," says Mr Foley. "There is no catch. We are combining the old and the new; bringing what is best about old-fashioned financial market betting to the most modern financial service, eliminating hidden costs and operating purely as a market maker. No other financial service offers such transparency or value for money."
He adds that the move is not a gimmick and will be around for the long term.
The group has been growing well since listing on Aim in 2007. Mr Foley, who founded the company, says his clients come from every walk of life, from south London bus drivers to professional traders. And all are turning to spread betting, he says, because betting duty is the only charge you pay on your winnings.
Earlier this year, 188BET, an "in-running" football-betting service, penned a deal with WorldSpreads to be its financial spread-betting partner.
It has been an up and down, topsy-turvy past couple of years for Cubus Lux, the Austrian-run, Croatian-based and London Aim-listed tourist group, which has rights to build hotels, casinos and golf courses along a stunning piece of Adriatic coastline in the former Yugoslav republic.
While the group concentrates its efforts on coastal resorts, a graph of its share price over the past couple of years looks more like a downhill ski slope, however, with the stock falling from more than 150p to a nudge over 15p today.
The company was not helped when one of its principal backers, believed to be Bank of Austria, withdrew financing for a number of the group's projects after coming under pressure in the face of the recent financial storm.
Thankfully, Cubus Lux's chairman, Gerhard Huber, and director, Christian Kaiser, stumped up to buy 3.2 million new shares at 10p apiece, before other financial backers were found, and news last week that Cubus Lux had managed another placing will also encourage the market that the company has seen off the worst of the situation. This time, the company placed 2.3 million new shares at 14p apiece, compared with the market share price of 16.5p, and representing 9.6 per cent of the enlarged share capital.
The company will announce its annual results later this month, and has been working away to get the necessary money in place to finance a new "Olive Island" resort. It will no doubt be hoping positive news in this respect will help to drive the share price back up, but it could be a long time before it returnst to its previous, heady heights.
- 1 Kermit the Frog has a new girlfriend named Denise
- 2 The excuses your boss is most likely to believe when you call in sick
- 3 Moscow voted the world's unfriendliest city
- 4 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 5 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
The one chart that shows how George Osborne is almost certainly going to be our next Prime Minister
The excuses your boss is most likely to believe when you call in sick
Three-year-old ultra-Orthodox Jewish children told 'the non-Jews' are 'evil' in worksheet produced by London school
Bono's group has made more money from Facebook investment than from all his music
Wikipedia rocked by 'rogue editors' blackmail scam targeting small businesses and celebrities
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...