Adjust for the Japanese operation, and spread betting group IG managed a reasonable half-year performance. Indeed, adjusted pre-tax profit grew 5 per cent in the period to £81.6m and, while clients have been spending less on taking positions, that has been offset by a steady increase in active client numbers.
Still, new legislation restricting bet leverage levels in Japan did mean an impairment charge of £143.1m. But, reflecting accountancy standards, that was based on a forecast which assumed a continuation of the Japanese operation's cost base as recorded at the period end - management is, however, reducing this. With further legislation coming into force this month, though, and more due in August, Numis Securities reckons that first-half Japanese turnover of £11.1m will shrink to £13.2m for next year's full year.
Elsewhere, IG's operations in continental Europe and Singapore performed well - European revenue grew 23 per cent to £26.7m, while revenue in Singapore rose 53 per cent to £7.7m. There was also decent progress in the UK and Australia, with active client numbers rising 14 and 13 per cent, respectively.
Numis expects full-year pre-tax profit of £167.1m, giving EPS of 33p (2010:£157.6m/30.8p).
| IG GROUP (IGG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 475p | MARKET VALUE: | £1.7bn | |
| TOUCH: | 475-476p | 12-MONTH HIGH: | 560p | LOW: 356p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 94p* | NET CASH: | £105m | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 168 | 69.0 | 13.9 | 5.00 |
| 2010 | 173 | -69.1 | -22.3 | 5.25 |
| % change | +3 | - | - | +5 |
Ex-div: 1 Mar Payment: 26 Jan *Includes intangible assets of £120m, or 33p a share | ||||
