IG Group forecasts revenues of £115m in Q4 FY19

Maria Nikolova

In the first three weeks of May market conditions have been more favourable and IG’s client base took opportunities to trade.

Online trading major IG Group Holdings plc (LON:IGG) has earlier today published a trading update for the fourth quarter of its FY19 financial year. 

The company noted that the low levels of volatility and market activity experienced in Q3 FY19 continued into the first two months of the final quarter of the year to end-May. In the first three weeks of May, however, market conditions have been more favourable and the Group’s client base have identified and taken opportunities to trade.

As a result, revenue in the fourth quarter is expected to be around £115 million compared with £108 million in the third quarter of the year. The full year net trading revenue is therefore projected to be around £475 million (FY18: £569 million).

The projected 17% year on year reduction in net trading revenue is blamed on the 26% reduction in OTC leveraged revenue in the ESMA region, which is barely surprising given the restrictions on CFD offering to retail clients. OTC leveraged revenue in the rest of the world was up by 2%. Both of these figures are underlying changes, adjusting for the clients who previously contracted with a UK entity who are now trading with an entity outside the ESMA region.

The Group’s total operating costs for FY19 are expected to be around £285 million (FY18: £290 million), including variable remuneration of around £28 million (FY18 £36 million).

The Group’s operating profit for FY19 is expected to be around £190 million, markedly down from £281 million registered in the preceding year.

IG expects to maintain the 43.2p per share annual dividend until the Group’s earnings allow the Company to resume progressive dividends.

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