19th Jul 2016 11:47
LONDON (Alliance News) - Online financial trading firm IG Group Holdings posted higher profit and revenue and declared a bigger dividend payout on Tuesday, as it said it traded well during a turbulent year for financial markets amid changes at the top of the company.
IG replaced its chief executive and chief financial officer over the course of its recent financial year. Peter Hetherington was made permanent chief executive in December, having done the job on an interim basis since October 2015 following the retirement of predecessor Tim Howkins.
This was accompanied by a change at the top of finance. In July, IG hired Paul Mainwaring, formerly of interdealer broker Tullett Prebon PLC, as its permanent CFO. He has taken over from Mark Ward, who had handled the role on an interim basis after Chris Hill had left in 2015 to join fund supermarket Hargreaves Lansdown PLC.
Despite the handovers at the helm, IG delivered a pretax profit of GBP207.9 million in its financial year to the end of May, up from GBP169.5 million the year earlier. Trading revenue for the year grew to GBP487.9 million from GBP422.1 million, with growth seen in all the company's geographic regions and sharp spikes in trading activity seen in the first and third quarters of the financial year, which benefited IG.
IG said revenue grew by around 9.0% in the UK and by 8.0% in Australia, while revenue from its European operations grew 22% year-on-year in part thanks to a strong performance from its new office in Switzerland, which traded ahead of IG's expectations. Revenue from IG's Rest of World division grew 30%, with a strong performance in the US and trading from its new Dubai office also coming in ahead of expectations.
IG said new clients on its books, defined by those undertaking their first trades, rose 29% year-on-year. In total, the company had 152,600 clients on its books at the end of the financial year, up from 136,100 a year earlier. This growth in new clients resulted in higher costs for the business, related to increased data fees and higher employee costs as IG recruited to handle the bigger customer base.
IG said it will pay a final dividend of 22.95 pence, taking its total payout up to 31.40p, a 12% year-on-year hike.
"We made good progress in 2016, strategically, operationally and financially, and the business starts this year in good shape," said Chief Executive Hetherington. He said demand for IG products remains strong, and IG intends to increase its marketing spend in the current financial year in order to capitalise on this demand.
Hetherington said it was pleased with how IG had handled itself in the volatility which emerged following the UK's EU referendum result. In the short-term, he said Brexit will not change much for IG, but the company will divert resources to ensuring it is well-prepared to ensure it can continue to operate across Europe dependent on the outcome of the UK's exit negotiations.
Shares in IG were up 0.5% to 849.50 pence Tuesday. The stock is up 5.7% so far in 2016.
By Sam Unsted; [email protected]; @SamUAtAlliance
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