Growth stalls at financial website

The expansion in financial transactions over the internet seems to be slowing.

One of the leading financial websites, interactive investor international, or iii, has reported virtually no growth in users and revenues since the spring.

But the company is pressing ahead with the launch of internet-based stocktrading next year.

In the company's fourth quarter, to 30 September, the number of monthly page impressions fell from 42m to 40m in the previous quarter, while the number of first visits (an approximate measure of the number of users) stayed stable at around 1.3m (with just over 1m registered accounts).

Revenues from commission sales fell in the same period to £377,000 from £430,000, while advertising income fell even faster from £1m to £770,000.

The company said that July and August were always a slow month for equities, and the weakness of the UK market added to the problem.

But it is still the biggest UK financial website, and says it has more page views than FT.com.

Fall in profits

Overall, gross profits for the quarter were down from £177,000 to £42,000, lower than one year ago - while operating losses were down slightly at £4.4m, compared to £4.8m the previous quarter.

For the financial year as a whole, the company's results looked more impressive.

The revenues from advertising more than doubled to £6m, while transaction revenues increased for the year to £1.6m, more than three times the level in the previous financial year.

The company had a cash balance of £57m after operating losses of £19m for the financial year, suggesting it was not likely to run out of cash in the near future.

Much of its cash balance was generated by its stock market flotation in February at the height of the dot.com boom, when shares in the company soared to 415p, compared to just 39p on Wednesday, valuing the company at just £64m.

Last week rival financial website MoneyExtra was sold to Bristol and West, the building society owned by the Bank of Ireland for £26m.

But with a substantial investment from Hollinger, the owners of the Daily Telegraph newspaper, iii is unlikely to suffer the same fate.

Shift in strategy

The company also announced that it was shifting its strategy from providing advice and information to acting as a portal for selling financial products.

Tomas Carruthers, the chief executive officer, said that the new financial year had "started satisfactorily" and that the company was "well positioned to take advantage of the increased financial activity preceding the end of the tax year."

He also confirmed that the company was scaling back its plans for international expansion to concentrate on the UK, including the development of WAP services over mobile phones and interactive television services.

The company had sold its Hong Kong subsidiary.

Mr Carruthers said that iii would launch its own stockbroking service on the internet in 2001, including trading in mutual funds and unit trusts, and an ISA centre.