21st Jan 2021 12:01
(Correcting announcement was made on Thursday.)
(Alliance News) - IG Group Holdings PLC on Thursday reported a "record" performance in its first half, seeing profit more than double on a year ago as it announced the USD1 billion acquisition of US online brokerage platform tastytrade Inc.
The FTSE 250 online trading services provider stated net trading revenue in the six months to November 30 surged 67% to GBP416.9 million from GBP249.9 million and pretax profit jumped to GBP231.3 million from GBP101.2 million a year before. Active clients rose 55% to 238,600.
Revenue in the Core Markets units was GBP340.6 million, up from GBP209.9 million the year prior and the Significant Opportunities portfolio recorded revenue of GBP76.3 million, up from GBP40.0 million.
"I am delighted to announce an outstanding performance over the first six months of our financial year. We delivered record revenue and profit, made excellent progress against our strategic growth objectives and continued to build a more sustainable and diversified global business. Demand for our products remained high, benefitting from favourable trading conditions," Chief Executive June Felix said.
Looking ahead, Felix added: "While the level of financial market volatility has reduced from the peaks seen in the fourth quarter of financial 2020, it remains elevated and the macro environment continues to be uncertain. Should we see further normalisation in financial market volatility, or a stabilisation in the macro environment we would anticipate some reduction in the level of client acquisition and activity. However, our active client base is now materially larger than the first half financial 2020 period, with levels of new client retention comparable to historical averages."
IG kept its interim dividend steady at 12.96 pence.
Separately, London-based IG unveiled its acquisition of tastytrade, a US online brokerage and trading education platform. IG will pay USD1.0 billion to tastytrade's shareholders, comprising USD300 million in cash and the issue of 61.0 million IG shares.
"This acquisition will materially expand and scale our business in the US and see us further diversify into the exciting high growth market of US retail options and futures, a market which is adjacent to IG's core retail trading skill set. The US market has more than 1.5 million retail traders and is the largest derivatives market in the world," Felix said.
Following completion of the acquisition, tastytrade Co-CEO Tom Sosnoff, Co-CEO & President Kristi Ross, tastyworks CEO Scott Sheridan and tastytrade Chief Technology Officer Linwood Ma will join the IG senior leadership team and continue in their current roles. They will collectively own around a 5.7% stake in IG.
Shares in IG Group were trading 3.8% lower at 869.50 pence Thursday midday in London.
By Ife Taiwo; [email protected]
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