For businesses, change can cost. Pre-tax profits were slightly lower at the half-way stage for online spread-betting specialist IG Group (IGG), but this reflected an increase in spending on new growth initiatives. Higher betting duty and lower interest on client funds also dragged. But at the top line, turnover rose by 8 per cent, and recent investments are expected to boost this further.
The UK, which remains the group's largest market, pushed revenue ahead by 3.4 per cent, compared with Australia growing at 5.7 per cent. But these were outpaced by Europe, where turnover increased by 13 per cent, and even stronger growth elsewhere in its international operations.
The execution-only stockbroking facility, launched in September 2014, has been extended outside the UK and Ireland to include the Netherlands, Germany and Austria. While growth has been a little below expectations, IG has already built up 7,000 client accounts, a majority of these being new to the company. Plans are also in place to develop an entirely new front-end web trading platform, while a development and operational hub has been set up to exploit the growing use of mobile apps.
Analysts at Numis are forecasting adjusted pre-tax profits of £204m for the year to May and EPS of 44.3p, compared with £192m and 41.1p in 2015.
| IG GROUP (IGG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 750p | MARKET VALUE: | £2.75bn | |
| TOUCH: | 749-751p | 12-MONTH HIGH: | 814p | LOW: 679p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 163p* | NET CASH: | £162m | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 214 | 101 | 21.5 | 8.45 |
| 2015 | 231 | 99 | 21.0 | 8.45 |
| % change | +8 | -3 | -3 | - |
Ex-div: 28 Jan Payment: 26 Feb *Includes intangible assets of £124m, or 34p a share | ||||
