IG Group revenue drops 9% in the first semester

abdelaziz Fathi

Spread betting and CFDs broker IG Group has released its interim results for the six months ending 30 November 2023. The report indicates a downturn in financial performance compared to the previous year, amidst softer market conditions.

The company’s total revenue for the first half of the fiscal year 2024 (H1 FY24) stood at £472.6 million, marking a 9% decrease from £519.1 million in H1 FY23. Net trading revenue saw a more significant drop of 19%, coming in at £402.4 million, compared to £494.9 million in the previous year.

The UK online trading leader attributed its lackluster performance in the six months through November 2023 to materially lower market volatility across a range of asset classes.

However, net interest income presented a contrasting picture, increasing to £70.2 million, up from £24.2 million in H1 FY23. This rise was driven by higher interest rates across all markets.

On a half-yearly scale, tastytrade bucked the trend by recording a 29% increase in total revenue, reaching $117.8 million compared to $91.4 million in H1 FY23.

IG’s new client acquisitions somewhat moderated during the period as anticipated in less volatile market conditions. The number of active clients dropped to 296,300 from 312,000 in H1 FY23, while new clients acquired in the period also saw a decrease. Adjusted total operating costs for H1 FY24 were up 9% to £281.1 million, compared to £256.8 million in H1 FY23. The statutory total operating costs rose by 11% to £310.4 million.

The adjusted profit before tax for H1 FY24 was £205.7 million, a 21% decrease from £260.7 million in the same period last year. The statutory profit before tax also declined to £176.4 million from £240.5 million in H1 FY23. The adjusted profit before tax margin remains at 43.5%, down from 50.2% in the previous year.

Basic earnings per share (EPS) also took a hit in the first semester, with adjusted basic EPS at 38.9p (down from 49.7p in H1 FY23) and statutory basic EPS at 33.4p (down from 45.8p in H1 FY23). However, the interim dividend per share saw a slight increase to 13.56p from 13.26p in H1 FY23.

IG Group’s operational highlights for the period include a plan to cut around 300 jobs, roughly 10% of its total workforce as of the end of the 2023 financial year. 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.

The company also repurchased £149.2 million of shares in the period, with £124.5 million as part of a £250 million share buyback scheme.

The FTSE 250-listed firm also confirmed the appointment of Breon Corcoran as Chief Executive Officer, effective from 29 January 2024.

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