IG Index in Profit Warning
June 6, 2007admin No Comments »Spread betting firm IG Group said today that “substantial” investment in staff and IT would impact full-year margins despite strong trading and client growth.
IG, which allows its clients to bet on financial and foreign exchange markets as well as sporting events, said underlying margins for the year to May 31 would be “slightly below” the previous 12 months.
But the company said it had benefited from recent volatility in world markets to increase client numbers by around 1,200 a month in the UK.
It is expecting full-year revenues of around £120m (€176.8m), 35% ahead of the previous year.
IG said it had also seen a boost in spread betting customers after the launch of its TradeSense programme in January, which educates its customers on the increased risks of spread betting and allows them to play the markets with smaller amounts.
The company also highlighted international growth with client recruitment rates in its Australian business running at more than double a year ago.
New offices in Singapore and Germany are also showing good levels of client recruitment, and its sports business had made “good progress”, the company added.
Analysts were upbeat on the firm despite the margin warning depressing IG’s share price today.
Citigroup analyst Richard Taylor said the business was in “excellent health” with recruitment “well ahead” of previous years.
He said: “Client sign-ups in the UK are running at very strong record levels.”
IG – which stands for Investors Gold – was first formed in 1974 to allow clients to bet on the price of the precious metal.
The company listed in 2000, was taken private in 2003 after a management buyout backed by private equity firm CVC, then rejoined the stock exchange in 2005.
Last year the firm posted underlying earnings of £52.6m (€77.53m) on revenues of £89.4m (€131.77m).
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