IG Group reports solid growth
Financial spread betting business delivers solid numbers despite Asian legislation impacting Japanese division.
IG Group saw 9% growth in revenue in its pre-close trading update, while costs were in line with management expectations, the company announced this morning.
The group said it expects to report revenue of around £157m in the six months ended 30 November 2010 compared to £143.8m in the same period last year, an increase of 9%. Its UK financial business was the main source of revenue, growing by 4% to £83m, while its Australian arm saw a slight increase, growing from £22.2m to £23m. Both businesses saw an increase in traders, growing by 14% and 13% respectively over the past year, extending its lead as a major provider of financial betting services.
IG Group increased its revenue in the third quarter by 16%, it said in an interim management statement released in September this year.
European revenue was more profitable, with revenue growing to £27m “ an increase of 24%. All European offices delivered growth, but Germany proved to be the fastest growing, with revenues increasing by 56%. The group’s Singapore office also delivered growth in excess of 50%, with revenue of nearly £8m (2010: £5m).
As expected, the first of several regulatory restrictions on leverage impacted the group’s Japanese client activity levels and revenue after coming into effect in August, with an average monthly run-rate of £1.5m in revenue. However, 27% of this revenue came from equity indices, and with stricter regulation coming in at the start of 2011, this revenue is expected to drop sharply, the company added in a statement. IG Group’s US business was also affected by legislation through the introduction of leverage limits, which saw revenue fall to £0.8m.
During the period the group launched an iPhone application for its UK spread betting business. The company called early uptake “encouraging” and that a CFD version would be launched in the UK later this month and in IG’s other markets in early 2011.
Meanwhile extrabet.com, the company’s sportsbook, profited from the World Cup, with revenue growing by 23% to £3.7m.