IG Group tumbles as mature markets slow

IG Group said this morning that revenues increased 35% to £62 million for the three month period ended February 28th 2008, buoyed by significant growth in its newer businesses. A decline in revenues at its two most established businesses in the UK and Australia however has seen shares in IG Group drop by over 30% in London this morning.

- Stock down over 30 pct, as core business revenue slows

- Doubtful debt down to less than 3 pct of revenue

The group’s UK financial business achieved revenue of approximately £31.5m, compared to £34.0m in the corresponding period in the previous financial year. The Group’s Australian business achieved revenue of £6.4m, compared to £6.9m in the corresponding quarter of the previous year.

IG Group’s Japanese division, FXOnline, achieved revenue of approximately £11m in the quarter. Revenue for the final month of the quarter was disappointing apparently due to a less volatile Yen and deteriorating economic conditions in Japan.

The firm said it had seen significant growth in its newer businesses — revenue grew by 35 percent to 62 million pounds fuelled by the group’s offices in Singapore, France, Germany, Spain, Italy and the US, which delivered ‘very strong growth’.

Thoughts: Turnover up 35%, bad debt under control. Net cash in the bank. A sharp 30% tumble in the share price appears unwarranted and a market overreaction. Spreadbetting and CFDs may not be the super growth business they were in the UK as the market matures, but there is still huge scope for further growth internationally.

Tags: bad debt, CFDs, IG Group, IG Index, igindex, Japan, spread betting, spreadbetting

This entry was posted on Tuesday, March 10th, 2009 at 10:09 pm and is filed under Financial Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.