IG Group kicks off second phase of GBP 250 million share buyback

abdelaziz Fathi

Spread betting and CFDs broker IG Group plc today launched the second tranche of its expanded £250 million buyback program. This plan was announced back in July and began with a £100 million repurchase of listed ordinary shares in August.

The UK-listed online trading platform broker released a statement that it has entered into non-discretionary instructions with Morgan Stanley to conduct the second tranche, which will be limited to a maximum aggregate market value of £150 million. The buyback activity is scheduled to start on November 7, 2023 and will be completed on or before July 31, 2024.

IG Group added that the transaction will be carried out in accordance with the authority granted to the board at the broker’s annual general meeting held on September 21, 2022. As per this authority, the maximum number of shares that can be repurchased under the second tranche is 40,452,304.

Maintaining a balanced approach between funding growth in key channels and returning excess liquidity to shareholders, IG Group said that the sole purpose of the program is to reduce share capital.

Earlier in April, IG Group plc extended its share buyback program by £50 million. The extension, in addition to the broker’s previous 150-million-pound buybacks, took the total size of the program up to £200 million. The third tranche followed a previous £50 million special buyback program announced in January. In July 2022, IG commenced its buyback program of up to £150 million.

The board revealed that it aims to reduce ‎the company’s share capital by means of purchasing its ordinary shares from time ‎to time using existing cash resources. The company added that special share buybacks or other distributions will be considered on a regular basis.

IG Group announced last month announced its plan to cut around 300 jobs, roughly 10% of its total workforce as of the end of the 2023 financial year.

The UK-listed broker said this decision is part of a larger initiative aimed at reducing costs and streamlining operations in response to the current market environment.

The company expects to achieve structural savings of £10 million in 2024, with this figure rising to £40 million in 2025 and £50 million in 2026. In addition, variable costs in 2024 are projected to be cut by an additional £10 million due to the continued softer market conditions that have been prevalent since the first quarter.

These measures are being implemented as brokerage platforms, including IG Group, face reduced trading volumes due to wider economic pressures. A decline in active users was reported by IG Group in the first quarter, reflecting broader industry trends.

The FTSE 250-listed firm said that its total number of active clients stood at 358,300 compared to 381,500 a year earlier. Although this figure decreased by 6 percent, it still remains more than double the number of clients before the pandemic. First trades reduced as anticipated, but also remain well above pre-pandemic levels, the broker said.

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