23rd Jul 2020 10:15
(Alliance News) - IG Group Holdings PLC on Thursday reported a sharp rise in annual profit and revenue on the back of a "record" performance in the fourth quarter.
For the year ended May 31, IG recorded a pretax profit jump of 52% to GBP295.9 million from GBP194.3 million.
Net trading revenue grew 36% year on year to GBP649.2 million from GBP476.9 million. In the first three quarter of the financial year, net trading revenue improved 9%, but then doubled year on year in the final quarter.
"This reflected the unprecedented level of client trading activity from the sustained period of volatility across global financial markets triggered by the Covid-19 pandemic and other macro events," IG explained.
OTC Leveraged trading revenue rose 37% year on year to GBP617.2 million. Exchange Traded Derivatives grew 9% to GBP18.4 million, while Stock Trading & Investments improved 57% to GBP13.6 million.
IG's active clients rose 34% to 239,600, with OTC Leveraged clients rising 36%.
During the fourth quarter, record levels of client onboarding saw 35,300 new OTC Leveraged clients, 17,900 new stock trading clients, and 3,200 new on-exchange clients placing a first trade in the period.
Chief Executive June Felix said: "It's been a successful first year in our three-year growth strategy to become a more sustainable, diversified, and global business. We concluded financial 2020 well on track to deliver on our medium-term targets and are confident in achieving the goals we've set. I'm delighted with the tangible progress we've made, the resilience we've shown as a company, and the record results we've delivered."
IG declared an annual dividend of 43.2 pence, unchanged on the year before.
"Capital, funding, and liquidity remain very strong, supporting further investment in growth and the dividend payment," IG said. "The board reiterates its intention to maintain the 43.2 pence per share annual cash dividend until the group's earnings allow for progressive dividends."
Looking ahead, IG expects to maintain the momentum seen in its Core Markets, and hit medium-term targets - which remain unchanged at Core Market revenue growth between 3% to 5% and an incremental GBP100 million of revenue by the end of financial 2022.
"The group anticipates a reversion to more normalised levels of market volatility during the course of financial 2021. Although current trading has continued to reflect elevated levels of volatility, this has moderated since the peak seen in March," IG said.
Felix added: "Our success is built on their long-standing support and loyalty. In financial 2020, we experienced growing client demand across the world for IG's products and services even prior to the exceptional period in the fourth quarter, and delivered record results."
Shares in the contracts for difference trading platform were down 6.4% in London on Thursday morning at 780.67 pence each.
Winterflood Securities said IG provided a "solid set" of results in line with the company's June update, but noted that the stock already had risen far from its March low of about 550p.
By Paul McGowan; [email protected]
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