IG Group reports stable revenues in Jun-Aug quarter, client acquisition eases

abdelaziz Fathi

Spread betting and CFDs broker IG Group plc has today released its trading update for the first quarter of its new fiscal year ending on 31 August 2021.

The UK online trading leader said high levels of trading activity among clients helped grow revenue 6 percent year-on-year. The revenue figure was reported at £227.5 million for the first quarter of the FY22.

Excluding one-off gains associated with the tastytrade acquisition, the adjusted net trading revenue was £221.7 million, higher from Q1 FY21’s figure of £209.0 million. On a quarterly scale, IG Group’s revenue also marked 3 percent increase from £214.1 million for the fourth quarter of FY21, and was also consistent with its previous guidance.

Out of these figure, tastytrade contributed £20.8 million in Q1 revenues. Excluding that, IG Group’s adjusted net revenue was down 4 percent on a yearly basis, which the company says it reflected anticipated moderation in trading activity.

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

The FTSE 250-listed group said its performance was driven by the continued increased levels of trading activity from existing clients, as well as the growing new customers.

Other business highlights show that over-the-counter (OTC) leveraged revenue fell by 3 percent year-on-year to £188.3 million, while exchange traded derivatives jumped 310 percent to £25.8 million. Revenue from stock trading and investments was virtually unchanged form a year earlier.

IG Group also noted that the revenue generated in its core markets – countries regulated by the European Securities and Markets Authority, Australia, Singapore, Switzerland, Dubai and South Africa – amounted to £192.1 million. This figure is down 4 percent form £199.9 million in the corresponding period last year, reflecting the impact of ASIC regulation in Australia.

IG Group also pointed out to strong customer growth despite lower levels of new client acquisition compared to the exceptional metrics seen throughout the previous year. Specifically, total active clients increased 12 percent year-on-year to 287,200 from 201,500 in the Q1 FY21. Some 27,500 new clients placed their first trade in the quarter, down 37 percent year-on-year from 34,600.

“The strong business performance in the quarter reflects the size and quality of the Group’s active client base. The Group remains confident of achieving its medium term targets for the Core Markets+ and High Potential Markets portfolios,” the company said.

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