Spread-betting specialist IG Group (IGG) is in the minority of financial services companies that have benefited from the volatile markets endured during the past 12 months. IG's trading activity peaked with sharp market movements during the first and third quarters of the reported period. Underlying net trading revenue grew 14 per cent to £456m, as active client numbers rose 12 per cent to 153m.
Chief executive Peter Hetherington says the business has experienced "extraordinarily high demand" for new accounts post-year-end, in the run-up to June's referendum. However, it has limited the amount of leverage clients could trade with in order to control risk in the event of huge market swings.
The online group has been concentrating on geographical expansion, with revenue growing across all regions. While the UK still accounts for half of group sales, the 'rest of the world' business (which also excludes Europe and Australia) grew revenue by almost a third. After experiencing weak initial demand, its UK execution-only stockbroking product has been re-branded Share Dealing and was launched in Australia.
Analysts at Numis are forecasting adjusted pre-tax profits of £236m and EPS of 50.6p for the year to May 2017 (from £211m and 44.6p in FY2016).
IG GROUP (IGG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 842.5p | MARKET VALUE: | £3.09bn | |
| TOUCH: | 842.5-843p | 12-MONTH HIGH: | 860p | LOW: 679p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 181p* | NET CASH: | £219m | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 367 | 186 | 37.9 | 22.50 |
| 2013 | 398 | 192 | 39.0 | 23.25 |
| 2014 | 408 | 195 | 40.4 | 28.15 |
| 2015 | 427 | 170 | 36.1 | 28.15 |
| 2016 | 492 | 208 | 44.9 | 31.40 |
| % change | +15 | +22 | +24 | +12 |
Ex-div: 29 Sep Payment: 28 Oct *Includes intangible assets of £125m, or 34p a share | ||||
