Hirose Financial UK results showed a sharp rise in costs in the year to March 31, while profit weakened after the firm stopped taking new retail clients outside Japan.
Revenue increased 18% to GBP 1.63 million. However, administrative expenses rose faster, climbing to GBP 1,343,113 from GBP 956,324. As a result, operating profit fell 32% to GBP 285,594.
The accounts mark the first full year since the company ended new retail client intake outside Japan. The firm filed the accounts at Companies House on July 29, and Azets audited them.
Hirose Financial UK Results Show Margin Pressure
Operating margin dropped to 17.5% from 30.6%. Meanwhile, turnover growth slowed from the prior year, when it had jumped 92% from GBP 717,000. This year, turnover added 18%.
Profit for the year came to GBP 354,285, down from GBP 701,339. However, profit before tax fell 19%, not 49%, because the deferred tax credit narrowed to GBP 7,132 from GBP 272,184. The company paid no current corporation tax in either year.
It also carried forward GBP 2,513,371 of losses against future trading profits. At the year end, client money held under Financial Conduct Authority rules stood at GBP 292,515. Its own cash totaled GBP 3.78 million.
Client Base and Cost Mix Shift
Staff costs fell to GBP 267,075 as average headcount dropped to six from seven. Operational staff declined to two. Four of the six employees were directors, and directors received GBP 177,556 of the total staff bill.
Notably, active B2B corporate clients rose to 36 from 31. The company said it runs on a riskless principal basis, offsetting each client currency exposure to its parent. Therefore, it said it carries no material market risk of its own.
Hirose Financial UK said its income comes from two sources. One is a turn on client transactions. The other is a payment from Hirose Tusyo based on transaction numbers, although the filing did not split the GBP 1.63 million between them.
The directors also did not break turnover down by geography, saying the markets supplied do not differ substantially. The balance sheet showed GBP 6,317,000 of paid-in share capital and an accumulated deficit of GBP 2,019,218.
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Source: Finance Magnates
