IG ticked all the right boxes in the financial year to the end of May by delivering an increased number of active clients and revenue per client, higher profits and a sharp rise in the dividend. The spread-betting specialist is also sitting on a useful cash pile worth 63p a share net of client deposits. Moreover, with market volatility set to continue, the shares retain their attraction.
Admittedly, the prior year's reported profits were distorted by a £143m goodwill write-off which clouds the underlying picture, but strip these out and on an an underlying basis adjusted pre-tax profit rose by 14 per cent to £185m. UK revenue - which accounts for just over half of group turnover - grew by 15 per cent to £192m, driven by a 5 per cent rise in the number of active clients and a 10 per cent increase in revenue per client.
Progress in less mature markets was even more impressive, with the Singaporean business achieving 49 per cent revenue growth. Even the troublesome Japanese business is showing signs of stabilising: revenue has been steady there for the last three quarters.
Numis Securities is forecasting flat EPS of 36.9p, although IG's guidance is for revenue growth for the year as a whole.
| IG (IGG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 448p | MARKET VALUE: | £1.6bn | |
| TOUCH: | 448-449p | 12-MONTH HIGH: | 505p | LOW: 379p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 123p* | NET CASH: | £228m | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 184 | 97 | 14.7 | 12.0 |
| 2009 | 257 | 111 | 20.6 | 15.0 |
| 2010 | 299 | 140 | 22.4 | 18.5 |
| 2011 | 355 | 13 | -5.7 | 20.0 |
| 2012 | 411 | 186 | 37.9 | 22.5 |
| % change | +16 | - | - | +13 |
Ex-div: 19 Sep Payment: 23 Oct *Includes intangible assets of £115m, or 32p a share | ||||
