IG Group Holdings PLC: Third Quarter Trading Update
IG Group, a global leader in online trading, today issues the following Trading Update for the three months to 28 February 2015, the third quarter of its 2015 financial year. The trends and figures highlighted below refer to this period and the corresponding period last year.
Clients were presented with a range of trading opportunities throughout the period. An unseasonably strong December was followed by good levels of financial market and client activity in January, before markets quietened a little from the middle of February. As was reported at the time, financial performance in the quarter was negatively impacted by the sudden movement in the value of the Swiss franc on 15 January 2015; this reduced revenue by £11.8 million to £91.8 million, 5.1% behind the same period last year (2014: £96.7 million). Excluding this, on an underlying basis, revenue was up by 7.1% to £103.6 million. The sudden Swiss franc movement also resulted in client debts of £18.4 million, of which the majority are expected to be provided for. Although half of the debtor accounts have now been settled, this relates to only a small proportion of the original £18.4 million; the majority of remaining debtors may not be in a financial position to clear their debt in full.
To provide the best understanding of performance in the period, the key performance indicators in the following table and the commentary below refer to underlying revenue, excluding the impact of the Swiss franc movement.
Revenue in the UK and Australia was ahead by almost 9% and 16% respectively, primarily due to strong growth in average revenue per client, but with both regions also posting their second consecutive quarter of year-on-year growth in client numbers. In Europe revenue was behind by just over 3%, as the strong year-on-year increase in client numbers was more than offset by a fall in average revenue per client. In Rest of World, revenue was ahead by 9%, with growth in all countries. Active clients numbers were ahead by 13%, with particular strength in the US and South Africa.
The Group’s execution-only stockbroking business, which was launched in the UK in the second quarter of this financial year, continued to grow well in the period. At the end of February, IG had over 2,600 funded stockbroking accounts, of which around 70% are clients new to IG.
IG continued to enhance its Major Markets app for iPad, rolling it out into further geographies and launching a version for Android phone. The Major Markets app forms part of IG’s increased focus on improving its recruitment and conversion of clients, particularly via mobile.
Looking forward
The performance in the third quarter and a good start to the final quarter positions IG well for the full year. The company continues to make good progress on its strategic initiatives, as it diversifies both geographically and through the offering of additional products, taking further steps towards its aim to become the default choice for active traders globally. As part of this, in the final quarter of the year, IG anticipates acquiring a licence and launching its broader offering in Dubai and, over the next twelve months, extending its stockbroking offering to at least three more countries, as it commences a targeted international roll-out.
Today there will be a conference call for analysts and investors at 8.30am (UK time). The call can be accessed by dialling +44 20 3059 8125. A replay of the conference call will be available for a week after the event by dialling +44 121 260 4861 and using passcode 0421563#, and it will be archived for access at www.iggroup.com/investors.
The next planned performance announcement from IG is a short pre-close trading update, currently scheduled for 28 May 2015.
Source: IG Group
