IG Group gathers wins in spread betting
January 23, 2007admin No Comments »Spread betting specialist IG Group increased its half-year pretax profit by 45% on a similar gain in turnover fuelled by expanding abroad, the company said.
IG Group delivered a pretax profit £29.59 million in the six months to 30 November against £20.43 million during the same period in 2005.
Turnover increased by 44% to £55.7 million against £38.6 a year ago. Earnings per share increased by 43% to 6.2p.
Chief executive Tim Howkins said the company has enjoyed eight years of solid growth.
‘It’s a good set of results but not something that we’re not used to,’ Howkins said.
New operations in Singapore, Germany and Italy were all contributing to account openings, Howkins said.
Earnings before interest, tax, depreciation and amortisation rose 42% to £30.4 million. The dividend is 2p a share.
Bridgewell rated the shares ‘overweight’, but that didn’t stop investors from dumping them on the market in some profit taking.
IG Group shares were trading down 6.625p at 276.375p, valuing the company at £903.9 million.
The shares rose to 52-week high on 8 January of 303p from a low of 176p in mid-July.
‘IG Group’s interims suggest the upgrades we made to our full-year numbers in December will prove insufficient to reflect the continued strength of client recruitment across the business,’ Bridgewell said.
Spread betting uses the futures market and other contracts for difference to place money on whether stocks, bond, currencies or other instruments will increase in value or fall.
‘People don’t just want to sit back and let big institutions handle their money, they want to take more interests in their investments,’ Howkins said.
He said the company has invested significantly in its IT platforms and launched a new client education program, TradeSense, to increase its rate of recruiting UK clients. The training aims to give clients the knowledge to help them trade more successfully, the company said.
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