IG Group reports 25% revenue rise
Spread betting company benefits from competitor's closure - pledges to invest in marketing and IT to continue growth.
Financial spread betting operator IG Group has recorded significant first half gains, with revenues rising 25% to £195.6m for the six months to 30 November.
Growth was driven by a 13% rise in the number of active clients, and an 11% increase in revenue per client helping IG Group post strong growth across almost all of its markets. This comes despite the closure of its sports spread betting business Extrabet, which was written off during the quarter after failing to find a buyer.
Its UK business achieved £102.1m in revenue, a year-on-year increase of 23%, while its European operations grew 41%, from £26.7m to £38.7m. Germany was the best-performing European market, growing 46%, while the newly-established operations in Sweden and the Netherlands brought in revenues of £1.8m, up from the same period £0.7m last year.
The closure of competing financial betting business MF Global Holdings aided growth in Australia and Singapore, as former MF Global players moved across the IG Group. The Australian business grew 43%, aided by a 20% increase in active clients, while Singapore, which accounts for 80% of the group’s rest of the world revenue, grew 53% in the period. This helped the rest of the world businesses, which also include the US and South Africa, to grow revenues from £9.4m to £14.5m, with a 40% increase in revenue per client.
IG Group’s only underperforming market was its Japanese business, which fell sharply after the introduction of a number of leverage restrictions. This had resulted in an overall loss of £80m in the corresponding figures for 2010, prompting the group to work on reducing their cost base in Japan.
The group has announced that it will continue to look to expand into new markets and increase its product range, investing heavily in marketing and technology to do so. IG Group recently signed a deal with marketing analytics company Featurespace to improve its targeted marketing strategies.
James Hollins, analyst at Evolution Securities, said: “IG is making the right investments, benefiting from helpful market conditions, driving market share gains, and delivering strong revenue.”