24th Apr 2020 09:19
(Alliance News) - IG Group Holdings PLC said Friday the financial market volatility seen since the end of February has continued, resulting in "exceptionally high" client transaction fees.
The group's revenue, which is driven by client transaction fees, has therefore also been "exceptionally high during this period", IG said.
The online trading platform provider said its revenue in the first 36 trading days - out of 61 - in its fourth quarter saw revenue of GBP173 million, which is higher than GBP139.8 million in the third quarter and compares to GBP249.9 million in the first half.
"The high levels of volatility have persisted through March and into April, and the group has continued to see high levels of client trading activity and further increases in the number of active clients," IG said.
The company said it has continued to attract new, "high quality", over-the-counter leveraged clients, with record numbers of applications during the 36 day-period.
In the first 36 trading days of the fourth quarter over 22,500 new OTC leveraged clients have traded with IG for the first time, the company said, compared with the 36,000 new OTC leveraged clients in the first three quarters of financial 2020.
"Each client cohort that the group recruits has an enduring value for IG generating revenue for many years," IG said.
IG has also upped its operating expenses guidance for financial 2020. The company now expects to report GBP300 million in expenses, up from GBP290 million previously.
IG explained: "This is primarily due to additional investment in prospect acquisition to continue to promote the IG brand, to grow the size and quality of the client base, and to establish the new businesses in the EU and the US."
The firm said it is difficult to predict its fourth quarter revenue.
"The recent sustained level of financial market volatility and revenue is unprecedented, and it is not possible to determine how long it will persist or how clients will continue to respond," IG said.
The company also reiterated its intention to maintain its 43.2 pence per share annual dividend.
Shares in IG Group were 0.3% higher in London on Friday morning at 737.85 pence each.
By Paul McGowan; [email protected]
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