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IG Group expects better annual results

ig groupFinancial spreadbetting provider IG Group Holdings has published a trading statement regarding its performance for the twelve months to the end of May showing that it expects total trading revenues to be one percent lower year-on-year at £361.9 million.

IG Group revealed that trading revenues for its fourth quarter should be in the region of £104.3 million, which would represent a rise of eight percent when compared with the same period in 2012, largely helped by an improvement of some 14 percent year-on-year in quarterly business from Australia at £15.9 million.

“In the final quarter of the year, although April provided the largest year-on-year uplift, both April and May were strong revenue months as clients responded to a number of separate market events including the Cyprus bail-in, a significant fall in gold prices, continuing strength in the global equity markets and movements in the Yen and the Nikkei driven by Bank of Japan intervention,” read a statement from IG Group.

With regards to client numbers, IG Group said that its fourth quarter saw it post a two percent decline year-on-year although revenues per customer swelled by ten percent when compared with the same three-month period in 2012.

“The strong fourth quarter was a continuation of the shift experienced at the start of the second half when better market conditions began to produce more trading opportunities for clients,” read the statement from IG Group.

“Trading patterns were also similar to the third quarter with the year-on-year uplift in revenues driven primarily by higher average revenues per client in the more mature markets of the UK and Australia and by active client growth in the Europe and the rest of the world. Revenues for the second half of the year were ahead by 13 percent at £192.9 million.”

IG Group declared that its expects its annual profit before tax to be ‘ahead of the prior year’ following the rationalisation of its online strategy after the acquisition of the domain name with more investment planned over the next twelve months ‘to drive future growth’.

“Following the reduction in operating costs in 2013, IG Group expects these to rise in 2014,” read the statement from the London-based firm.

“The primary drivers here are the resetting of employee variable compensation into the new financial year, the impact of inflation on people costs, an increase in the FSCS levy and additional investment in growing the business. This investment will focus on specific initiatives aimed at enhancing the group’s offerings for active traders and further geographic expansion to drive long-term revenue and profit growth. It is not anticipated that this investment will deliver any significant revenue benefit in the current year.

“IG Group’s ongoing investment in technology and brand coupled with its market leadership and strong financial position leave it well positioned for the future growth in its global markets.”