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IG Group flags return to normal after volatility surge

The spread-betting specialist was boosted by market volatility in recent months
July 23, 2020

Traders looking to take advantage of oscillating markets in the wake of the pandemic meant IG Group’s (IGG) net trading revenue more than doubled during its fourth quarter and pushed the group figure up more than third over the year. A record number of new clients signed-up to use the spread-betting specialist’s trading platforms, which generated 14 per cent of the total over-the-counter leveraged revenue - but client attrition rates were also higher than usual.

IC TIP: Hold at 776p

Market volatility has already moderated and management expects core markets revenue growth to follow suit this year. IG is looking beyond its core European operations to drive growth. An increase in client numbers and trading from Japan and emerging markets pushed revenue from its ‘Significant Opportunities’ portfolio of business lines up 85 per cent to £108m, against a 2022 target of £160m. 

Numis forecasts adjusted pre-tax profits of £229m and EPS of 50.3p for the year to May 2021, rising to £274m and 60.1p the following year. 

IG GROUP (IGG)    
ORD PRICE:776pMARKET VALUE:£ 2.87bn
TOUCH:776.5-778.5p12-MONTH HIGH:873pLOW: 526p
DIVIDEND YIELD:5.6%PE RATIO:12
NET ASSET VALUE:253pNET CASH:£357m
Year to 31 MayTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201645620844.931.4
201749121446.232.3
201856928161.743.2
201947719443.143.2
202064829665.343.2
% change+36+32+52 
Ex-div:24 Sep   
Payment:22 Oct