IG Group reports record profits in FY 2021 on back of Covid volatility

abdelaziz Fathi

IG Group Holdings PLC (LON:IGG) today said its trading revenues for its fiscal 2021 was around one third higher than last year, buoyed by similarly strong quarters of growth.

The online broker explains that a combination of pandemic-induced market volatility and high levels of activity among clients helped contribute to the strong performance.

Europe’s largest spread better reported that the elevated trading volumes across the larger group led to net revenue of around £853.4 million ($1.17 billion), up 31.6% from £649 million a year earlier.

The FTSE 250-listed group also revealed a pretax profit of £450.3 ($617.6 million) for the 12 months ended May 31, a 52% increase from £295.9 million it earned in fiscal 2020.

Another area of strong growth for IG Group was the number of its active clients. The online trading broker reported the figure at 313,300 in its most recent quarter, up 31% from 239,600 the previous year.

New client retention rates remain comparable to historical averages and was the key to its much larger active client base, IG explained. However, rivals CMC Markets and Plus 500 have also seen similarly strong client acquisition amid the higher trading volatility of financial markets, sparked by the effects of the Covid-19 pandemic.

There was a great start to the new fiscal year as well, IG says, although there could be some moderation from the exceptional performance in the FY 2021.

“Following a sustained period of strong acquisition, elevated demand and new client retention, IG now services a substantially larger client base, which provides a quality asset going into FY22. Today, we believe that we are in a better position than ever before. We have announced revised and upgraded growth guidance that reflects our outperformance in FY21, our strategic acquisition of tastytrade and the quality of our client proposition, putting us in a position of strength to continue to deliver sustainable value for our shareholders,” said June Felix, CEO at IG Group.

The CFDs broker also announced a final dividend of 30.24 pence per share, bringing the full-year distribution to 43.2 pence, unchanged from the profit it distributed in 2020.

Finally, IG Group said it has completed the acquisition of Chicago-based fintech startup tastytrade on June 28. The $1 billion deal includes $300 million in cash and 61 million IG shares, which were valued at this time at $700 million.

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