IG Group Third Quarter Revenues Up 11%

IG Group, the powerhouse behind leading CFD and spread betting providers IG Markets and IG Index respectively reported revenue for the quarter ending February to be about £69 million pounds compared to £62 million in the corresponding quarter in the prior year of 2009.

The derivatives and margin trading provider stated that this represents an increase of approximately 11% (10% on a constant currency basis). In addition, IG’s UK, Australian, European and Singaporean divisions, taken as a whole, which businesses made 90% of the Group’s revenues in the period, experienced good growth at 29% (26% on a constant currency basis).

Operating costs were held in line with management expectations. IG managed to achieve this growth against marked lower volatility in both the security and foreign exchange markets and new client accounts openings continued apace. Excluding Japan, new account openings across the Group totalled 14,900, compared with 14,300 a year earlier. Japan had 3,200 new accounts, down from 4,600 in the same fiscal 2009 quarter.

The equity rally further helped to boost client trade through much of 2009 although this rally showed signs of weakness in the first two months of this year. IG is still having difficulties getting its Japanese division back to growth levels with revenue at £5 million for the first three months, considerably down on the £10.8 million achieved in the corresponding three months in 2009. Since IG’s acquisition of a Japanese online foreign exchange platform in 2008, competition for the Japanese’s retail foreign exchange customers has intensified, forcing IG Group to cut its margins to attract customers. Having said that a company spokesman did point out that there are signs that volume and revenue in the divisions are recovering, with revenue for February being the highest seen since last October.

IG further cautioned that it ‘remains difficult to predict future trends in volatility or customer reaction to changing market and economic conditions,’ but the ‘strong account opening and the continued development of the group’s offering leave the group well positioned for further growth.’

Tags: IG Group, igindex, igmarkets

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