TIDMIGG
RNS Number : 3713M
IG Group Holdings plc
14 September 2023
14 September 2023
LEI No: 2138003A5Q1M7ANOUD76
IG GROUP HOLDINGS PLC
First Quarter Revenue Update
'Solid Group revenue performance set against much softer market
conditions, driven by strong client retention rates and continued
high levels of client money balances.'
IG Group Holdings plc, the home of active traders worldwide,
today issues its scheduled revenue update for the three months to
31 August 2023 ("Q1 FY24"), representing the first quarter of the
financial year ending 31 May 2024 ("FY24").
Business performance
Total revenue of GBP242.9 million reflected the benefit of
business diversification over the past few years, as some
moderation in OTC derivatives revenue in the quarter was offset by
exchange traded derivatives and stock trading, both of which grew
revenues significantly year over year.
Total revenue by product Q1 FY24 Q1 FY23 % Change
(GBPm)
OTC derivatives 182.7 199.0 (8%)
Exchange traded derivatives 49.8 36.4 37%
Stock trading and investments 10.4 6.4 61%
Total revenue 242.9 241.8 -
------------------------------- -------- -------- ---------
Similar to trends seen in Q4 FY23, a decrease in net trading
revenue reflected substantially lower volatility across a range of
asset classes, which was more than offset by strong growth in
interest income, which resulted from a combination of higher
interest rates and stable client money balances from the year
end.
Net interest income within total revenue was GBP34.4 million (Q1
FY23: GBP7.1 million). Of this, GBP11.8 million related to OTC
derivatives (Q1 FY23: GBP1.2 million), GBP18.0 million was
attributable to exchange traded derivatives (Q1 FY23: GBP5.6
million) and GBP4.6 million related to stock trading and
investments (Q1 FY23: GBP0.3 million).
Total revenue by portfolio Q1 FY24 Q1 FY23 % Change
(GBPm)
Core Markets+ 188.7 200.3 (6%)
High Potential Markets 54.2 41.5 30%
Total revenue 242.9 241.8 -
---------------------------- -------- -------- ---------
Total revenues within the Core Markets+ portfolio reduced by 6%
to GBP188.7 million, reflecting softer market conditions through
most of the quarter, although client money balances remained
strong, indicating clients' interest in and propensity to trade
when they see opportunities in the market.
Within the High Potential Markets portfolio, tastytrade achieved
another record level of quarterly total revenue (USD), which
increased by 48% to $60.0 million; on a reported GBP basis, total
revenues increased 39% to GBP47.1 million (Q1 FY23: GBP33.9
million). Within total revenue, net trading revenue increased by
10% and 3% in USD and GBP terms, respectively, to $37.1 million (Q1
FY23: $33.8 million) and GBP29.1 million (Q1 FY23: GBP28.3
million). Total client equity on the platform reached record levels
with average balances in the quarter up 9% on the prior quarter, as
we continue to attract large balance accounts.
Total active clients across the Group in the quarter were
267,000 (Q1 FY23: 279,300), a resilient performance reflecting the
quality of our clients and our ability to engage and retain client
cohorts through superior technology, trade execution, and overall
customer service.
Total client money balances of GBP4.1 billion remained stable on
the year end balances as clients maintained their interest in
trading financial markets around the world.
Capital update
In July, the Board announced a GBP250 million share buyback
programme. The first tranche of GBP100 million commenced during the
quarter. As at 12 September, approximately 5.9 million shares have
been re-purchased, at a cost of GBP39.6 million. The first tranche
is anticipated to be completed on or before 12 December 2023.
On 1 January 2022, the Group transitioned to the Investment Firm
Prudential Regime ("IFPR"). Following our first Supervisory Review
and Evaluation Process ("SREP") under the new regime, the Group's
regulatory capital requirement reduced from GBP497 million at 31
May 2023 to GBP290 million as at 31 August 2023, evidencing the
high quality and strength of our risk management frameworks and
controls, following years of steady investment and development. The
Group continues to be highly cash-generative, and this reduction in
our regulatory capital requirement further strengthens our
financial capacity for strategic growth initiatives and to deliver
distributions to our shareholders. The Board will continue to
allocate capital in a disciplined manner, in line with our Capital
Allocation Framework adopted last year.
Outlook
The Group remains confident of achieving its medium-term
targets. We are progressing with plans to drive even greater cost
efficiency, leveraging the scale advantages that we have as a
global Group.
As announced on 29 August 2023, the Board has commenced a
comprehensive search process for a permanent CEO and expects to
make an appointment in the coming months.
The Group's next scheduled market announcement will be the half
year FY24 results in January 2024.
For further information, please contact:
IG Group Investor IG Group Press FTI Consulting
Relations
Martin Price / Simon Angela Warburton / Alayna Edward Berry / Katherine
Wright Francis Bell
07703 330 199 / 079 7687
020 7573 0020 / 0099 020 7633 5382 / 5395 0961
investors@ig.com press@ig.com edward.berry@fticonsulting.com
/ katherine.bell@fticonsulting.com
Disclaimer - Forward-looking statements
This statement, prepared by IG Group Holdings plc (the
"Company"), may contain forward-looking statements about the
Company and its subsidiaries (the "Group"). Such forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "projects",
"estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors which are beyond the
Company's control and are based on the Company's beliefs and
expectations about future events as of the date the statements are
made. If the assumptions on which the Group bases its
forward-looking statements change, actual results may differ from
those expressed in such statements. There are a number of factors
that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements, including those set out under "Principal Risks" in the
Company's annual report for the financial year ended 31 May 2023.
The annual report can be found on the Company's website
(www.iggroup.com).
Forward-looking statements speak only as of the date they are
made. Except as required by applicable law and regulation, the
Company undertakes no obligation to update these forward-looking
statements. Nothing in this statement should be construed as a
profit forecast.
About IG
IG Group (LSEG:IGG) is an innovative, global fintech company
that delivers dynamic online trading platforms and a robust
educational ecosystem to power the pursuit of financial freedom for
the ambitious. For nearly 50 years, the Company has evolved its
technology, risk management, financial products, and education and
content to meet the needs of its retail and institutional clients.
IG Group continues to innovate its offering for the new generation
of tomorrow's investors through its IG, tastytrade, IG Prime,
Spectrum, and DailyFX brands.
Established in 1974, IG Group is a London-headquartered FTSE 250
company offering its clients access to 19,000 financial markets
through its offices spread across Europe, North America, Africa,
Asia-Pacific and the Middle East.
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September 14, 2023 02:00 ET (06:00 GMT)
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