IG Group expects to report revenue 17 per cent higher at £366.8m in the year to May, according to a trading statement. Growth was particularly strong in the fourth quarter, with revenue accelerating from 1.5 per cent growth in the third quarter to 12 per cent. Costs were a little higher, but operating margins were stable at an impressive 50 per cent. The shares have performed well, given the weak performance in equity markets, and we remain buyers.
Trading was strong across the group's global operations, with UK generated revenue rising 15 per cent to £192m, underpinned by active client growth of 5 per cent and a 10 per cent hike in revenue per client. Trading in Europe was even stronger, with revenue up 26 per cent at £72.2m, with a 5 per cent fall in revenue per client more than offset by a 32 per cent rise in the number of active clients. And although relatively small, operations in the rest of the world - excluding Australia and Japan - saw revenue jump 43 per cent to £28.4m.
Numis has nudged up next year's forecasts to pre-tax profits of £183.1m and EPS of 36.9p.
