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LEI No:
2138003A5Q1M7ANOUD76
Results for the financial
year ended 31 May 2024
25 July 2024
IG Group Holdings plc ("IG", "the
Group", "the Company"), today announces its results for the 12
months ended 31 May 2024 ("FY24").
Financial highlights[1]
Delivered resilient results in
slower market conditions and controlled costs well throughout a
period of leadership and organisational change.
- Total
revenue of £987.3 million (FY23: £1,022.6 million), down
3%.
- Net
trading revenue of £844.9 million (FY23: £941.8 million), down 10%
due to reduced trading activity.
- Net
interest income increased to £142.4 million (FY23: £80.8 million)
reflecting higher interest rates.
-
Adjusted[2] profit before tax of £456.3
million (FY23: £490.5 million), down 7%. Adjusted profit before tax
margin was within the guidance range of mid-to-high 40s at 46.2%
(FY23: 48.0%). Statutory profit before tax of £400.8 million (FY23:
£449.9 million), down 11%.
- Adjusted
basic EPS of 90.3 pence (FY23: 94.7 pence), down 5% on FY23.
Statutory basic EPS of 79.4 pence (FY23: 86.9 pence).
- Total
capital return of £422.7 million split across dividends paid and
shares re-purchased in the period (FY23: £363.4
million).
- Proposed
an increased total dividend per share of 46.2 pence (FY23: 45.2
pence) and a new share buyback programme of £150 million to be
completed by 31 January 2025.
Strategic and operational highlights
-
Following the appointment of Breon Corcoran as CEO in January 2024,
new organisational structure recently created to enhance product
velocity and client centricity. Initiated work to change IG's
culture to increase ownership and accountability.
- Launched
an operational improvement programme in October 2023, and we
continue to explore opportunities to enhance efficiency.
- High
quality and strength of risk management framework and controls
evidenced by a 40% reduction in the Group regulatory capital
requirement in August 2023.
-
Total active clients of 346,200 (FY23: 358,300)
down slightly in markets which were less volatile. First trades of
69,900 (FY23: 72,600) were down 4%.
-
tastytrade delivered record total revenue which increased 23% to
$251.8 million (£200.6 million) from $205.0 million in FY23 (£170.3
million) reflecting 10% growth in net trading revenue ($160.1
million) and 53% growth in interest income ($91.7
million).
Financial summary (continuing operations)
£
million (unless stated)
|
FY24
|
FY24
adjusted
|
FY23
|
FY23
adjusted
|
Change %
|
Change adjusted
%
|
|
|
|
|
|
|
|
Total revenue
|
987.3
|
987.3
|
1,022.6
|
1,022.6
|
(3%)
|
(3%)
|
Net trading revenue
|
844.9
|
844.9
|
941.8
|
941.8
|
(10%)
|
(10%)
|
Total operating
costs1,2
|
619.6
|
564.1
|
584.9
|
541.0
|
6%
|
4%
|
Profit before tax
|
400.8
|
456.3
|
449.9
|
490.5
|
(11%)
|
(7%)
|
Profit after tax
|
307.7
|
350.3
|
363.7
|
396.5
|
(15%)
|
(12%)
|
Basic earnings per share
(p)
|
79.4
|
90.3
|
86.9
|
94.7
|
(9%)
|
(5%)
|
Total dividend per share
(p)
|
46.2
|
-
|
45.2
|
-
|
2%
|
-
|
|
|
|
|
|
|
| |
1 Operating costs include net credit losses on financial
assets
2 FY24 adjusted operating costs exclude £36.4 million of costs
and recurring non-cash costs associated with the tastytrade
acquisition and integration (FY23: £39.7 million), £19.1 million
relating to the operational improvement programme and £4.2 million
in FY23 relating to the sale of Nadex.
Breon Corcoran, Chief Executive Officer,
commented:
"IG has a sound position in large,
growing markets, underpinned by an established brand and a loyal,
high-value client base. However, I've also identified areas
requiring change. We have lots of work to do to take IG to the next
level and address the challenges we face.
"We operate in a competitive
industry landscape that is changing rapidly. We must move at pace
to get closer to our customers, give them the products they want
more quickly, enhance efficiency, and add scale to win. My initial
priorities are to increase client centricity, accelerate product
velocity and develop our culture to increase ownership and
accountability.
"I'm excited by the enthusiasm of
our people and their commitment to delivering sustainable, stronger
growth. I'm confident that we have a solid platform on which to
build."
Further information
Analyst presentation
There will be an analyst and
investor presentation at 9:30am (UK Time) on Thursday 25 July at IG
Group, Cannon Bridge House, 25 Dowgate Hill, London, EC4R 2YA. The
presentation will also be available via live audio webcast
at
Webcast | IG Group.
If you wish to listen via conference call, please
use the following link
Conference call registration | IG
Group. The audio webcast of the
presentation and a transcript will be archived at:
Financial Results | IG Group.
Alternative performance measures
IG Group management believes that
the alternative performance measures included in this document
provide valuable information to the readers of the financial
statements as they enable the reader to identify a more consistent
basis for comparing business performance between financial periods.
They also provide more detail concerning the elements of
performance which the managers of these businesses are most
directly able to influence or are relevant for an assessment of the
Group. Furthermore, they reflect how operating targets are defined
and performance is monitored by IG Group management. However, any
alternative performance measures in this document are not a
substitute for statutory measures and readers should also consider
the statutory measures. Refer to the appendices for further
information and calculations of alternative performance measures
included throughout this document, and the most directly comparable
statutory measures.
AGM and Board
This year's Annual General Meeting
("AGM") will be held on 18 September 2024. Further details will be
provided in the Notice of Meeting in due course. Malcolm Le May
will retire from the Board at the conclusion of the 2024 AGM. We
thank Malcolm for his strong contribution as a valued member of the
Board during his nine-year tenure.
Forward-looking statements
This preliminary 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 FY23 Group 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.
No offer or solicitation
This announcement is not intended
to, and does not constitute, or form part of, any offer to sell or
an invitation to purchase or subscribe for any securities or a
solicitation of any vote or approval in any
jurisdiction.
No profit forecasts or estimates
No statement in this announcement
is intended as a profit forecast or estimate for any
period.
Some numbers and period on period
percentages in this statement have been rounded or adjusted to
ensure consistency with the financial statements. This may lead to
differences between subtotals and the sum of individual numbers as
presented. Acronyms used in this report are as defined in the
Group's Annual Report.
About IG
IG Group (LSEG:IGG) provides online trading
platforms and educational resources to empower ambitious clients
around the globe. Headquartered in the UK, IG Group is a FTSE 250
company that offers clients access to ~19,000 financial markets
worldwide.
Year in Review
The Group delivered resilient
results in FY24 in slower cyclical market conditions, supported by
execution of our strategy to expand and diversify by both product
and geography.
Total revenue declined 3% on the
prior year, as lower trading revenue was largely mitigated by
stronger interest income. Within total revenue, trading revenue
declined 10% as weaker OTC derivatives revenue was partly offset by
growth in exchange-traded derivatives, with stock trading and
investments revenue flat.
Operating margins remained strong
and adjusted costs were relatively well controlled in the year,
increasing 4% on FY23, reflecting the early benefit of efficiency
measures announced in October 2023.
The high quality and strength of
our risk management frameworks and controls was evidenced by a
significant reduction in our regulatory capital requirements in the
year.
OTC
derivatives
OTC total revenue declined 9%
driven by lower trading revenue reflecting moderation in active
clients and lower revenue per client. Active clients declined 6% in
the year, although weakness was largely seen in Q1 and client
numbers were broadly stable over the rest of the period.
Lower trading revenue was partly
offset by increased interest income, reflecting higher monetary
policy rates in several countries. These trends were broadly
similar across most geographies except Singapore which delivered
stronger trading revenue reflecting higher volumes from some of our
largest traders.
Trading revenue held up well
relative to the decline in volatility across a range of asset
classes as clients remained engaged on our platform and continued
to seek trading opportunities. Trading revenue continued to be
driven by clients onboarded in prior years and retention was
consistent with long-term trends.
Exchange-traded derivatives
Our exchange-traded derivatives
(ETD) business is dominated by tastytrade, our US options, futures
and equities business, which generates approximately 94% of the
Group's ETD revenue. Our ETD business also includes Spectrum, the
Group's European multi-lateral trading facility.
tastytrade total revenue increased
23% in the year in US Dollars, reflecting trading revenue up 10%
and interest income up 53%. Stronger trading revenue was driven by
increased revenue per client. Average market share of OCC options
volumes attributable to retail customers was up modestly relative
to the prior year.
Total client equity, which
includes free cash and the value of open positions, reached $5.1
billion at the end of FY24, a new record. Within this,
interest-bearing free cash balances were steady.
tastytrade's performance gathered
momentum throughout the year. FY24 was a record year for total
revenue and trading revenue, H2 was a record half on both metrics,
and Q4 was a record quarter.
Almost a third of new tastytrade
accounts come from outside the US, despite no marketing
historically, evidencing international demand for US options and
futures. This is also reflected in client surveys which show that
our existing OTC clients are interested in trading US options and
futures.
During the year, we completed our
preparations to launch tastytrade in the UK, which went live at the
beginning of June 2024. We plan to roll the offering out to other
international markets where IG already has a presence.
Spectrum revenue is driven mainly
by trading activity and trading revenue declined 12% in the year.
This reflected a strong Q3 in the comparative period, and a softer
H1 in the current year. As a newer business, with a smaller client
base, revenue can be more volatile than more mature parts of the
Group which are already operating at scale. Active clients were
broadly stable.
Stock trading and investments
Total revenue was up strongly
reflecting higher interest income, with trading revenue broadly
flat. Client numbers were down 4% but assets under administration
(AUA) increased to £3.9 billion at the end of FY24 (FY23: £3.3
billion), driven by market performance.
Operational efficiency
During the year we launched an
operational improvement programme and recently made changes to our
organisational structure and culture. These changes will help us to
bring new products to market more quickly and
efficiently.
As part of the implementation of
our operational improvement programme, we announced plans to reduce
headcount by approximately 300 which represented around 10% of the
total workforce at the end of FY23. We have made good progress
implementing these changes, with headcount at 31 May 2024 of 2,570
down 8% relative to 31 October 2023, when the measures were
announced. In FY24, we incurred £19.1 million of non-recurring
costs to achieve these efficiency measures, in line with guidance
of approximately £18 million.
We expect further savings and
headcount reduction in FY25 as we focus on the offshoring of some
roles to our global centres of excellence, following a period of
dual running, as new teams are onboarded.
We have implemented a flatter
organisational structure and moved several central functions,
including marketing, product management and some technology teams,
into four geographically-aligned divisions to enhance client
centricity and product velocity. We have continued to optimise the
way that our global centres of excellence in Poland, India and
South Africa support the business and identify opportunities to
automate business processes. We are also developing our culture to
enhance ownership and accountability across the
organisation.
In the year, we also successfully
migrated our data centres to new locations, ahead of
schedule.
Capital allocation
We continue to allocate capital in
line with our Capital Allocation Framework.
Our first priority is ensuring
that we meet our regulatory capital requirements. On 1 January
2022, the Group transitioned to the Investment Firm Prudential
Regime ("IFPR"). As announced in September, following the first
Supervisory Review and Evaluation Process ("SREP") under the new
regime, the Group's regulatory capital requirement reduced from
£497.4 million at 31 May 2023 to £289.8 million as at 31 August
2023, evidencing the high quality and strength of our risk
management frameworks and controls.
As at 31 May 2024, our Group
minimum regulatory capital requirement was £298.6 million (31 May
2023: £497.4 million) and regulatory capital resources totalled
£936.9 million (31 May 2023: £996.3 million), equating to headroom
of £638.3 million (31 May 2023: £498.9 million).
We continue to allocate 1% of
post-tax profits to charitable causes. For FY24, this equates to
£3.5 million which will be proposed to be donated to charities
focused on empowerment through education.
A proposed final dividend of 32.64
pence per share represents a total dividend for the year of 46.2
pence per share, an increase of 1 pence on the prior year,
representing a progressive and sustainable increase.
Having assessed regulatory capital
headroom and alternative uses of capital, we have announced a £150
million share buyback which will start in the coming weeks and
complete by 31 January 2025.
Outlook and guidance
In FY25, the Group expects total
revenue and adjusted profit before tax to be in line with market
expectations which can be found on the IG Group
website.
The Group tax rate is expected to be approximately 24%.
IG has solid positioning in large
and growing target addressable markets but there is much more we
can do to unlock our potential. We have to get closer to our
customers to deliver better products tailored to their needs more
quickly, drive efficiency and add scale in the pursuit of stronger
growth.
We are also developing our culture
towards greater ownership and accountability across the
organisation. Delivering against these objectives will be key to
growing our market leadership and achieving sustainable, stronger
revenue growth.
Business Performance
Review
All results are presented on a
continuing operations basis which excludes items related to the
sale of Nadex operations which completed in FY22 and was classified
as a discontinued operation. In FY23, the Group subsequently
disposed of assets related to Nadex.
The following analysis on the
income statement is presented on an adjusted basis, which excludes
certain one-off items and recurring non-cash items. Further detail
on these adjustments and a reconciliation of alternative
performance measures used in this report is contained in the
appendix.
Summary Group Income Statement
£m
|
FY24
|
FY24
adjusted
|
FY23
|
FY23
adjusted
|
Change %
|
Change adjusted
%
|
Net trading revenue
|
844.9
|
844.9
|
941.8
|
941.8
|
(10%)
|
(10%)
|
Net interest income
|
142.4
|
142.4
|
80.8
|
80.8
|
76%
|
76%
|
Total revenue
|
987.3
|
987.3
|
1,022.6
|
1,022.6
|
(3%)
|
(3%)
|
Betting duty and other operating
income1
|
1.5
|
1.5
|
0.8
|
(2.5)
|
|
|
Net operating income
|
988.8
|
988.8
|
1,023.4
|
1,020.1
|
(3%)
|
(3%)
|
Total operating
costs2,3
|
(619.6)
|
(564.1)
|
(584.9)
|
(541.0)
|
6%
|
4%
|
Operating profit
|
369.2
|
424.7
|
438.5
|
479.1
|
(16%)
|
(11%)
|
Other net losses
|
(3.5)
|
(3.5)
|
(2.6)
|
(2.6)
|
|
|
Net finance income
|
35.1
|
35.1
|
14.0
|
14.0
|
|
|
Profit before tax
|
400.8
|
456.3
|
449.9
|
490.5
|
(11%)
|
(7%)
|
Tax expense
|
(93.1)
|
(106.0)
|
(86.2)
|
(94.0)
|
8%
|
13%
|
Profit after tax
|
307.7
|
350.3
|
363.7
|
396.5
|
(15%)
|
(12%)
|
Weighted average number of shares
for the
calculation of EPS
(millions)
|
387.8
|
387.8
|
418.7
|
418.7
|
(7%)
|
(7%)
|
Basic earnings per share (pence per share)
|
79.4
|
90.3
|
86.9
|
94.7
|
(9%)
|
(5%)
|
1 FY23 adjusted betting duty and other operating income
excludes £3.3 million of income for the reimbursement of costs
relating to the sale of Nadex
2 Operating costs include net credit losses on financial
assets
3 FY24 adjusted operating costs
exclude £55.5 million of one-off items and recurring non-cash items
(FY23: £43.9 million)
Total revenue
Total revenue consists of net
trading revenue and net interest income. Total revenue was £987.3
million in FY24, down 3% on FY23.
Total revenue by product
|
Total revenue
(£m)
|
|
FY24
|
FY23
|
Change %
|
OTC derivatives
|
732.6
|
806.3
|
(9%)
|
Exchange-traded
derivatives
|
214.4
|
186.5
|
15%
|
Stock trading and
investments
|
40.3
|
29.8
|
35%
|
Total revenue
|
987.3
|
1,022.6
|
(3%)
|
OTC derivatives total revenue was
£732.6 million, down 9% reflecting softer market conditions in the
period, and lower levels of client activity. Exchange-traded
derivatives total revenue was £214.4 million, up 15% on the prior
period. This includes tastytrade total revenue of £200.6 million,
up 18%, as higher interest rates increased interest income, and net
trading revenue increased 5%. Stock trading and investments total
revenue was £40.3 million, up 35% on FY23, reflecting higher
interest rates, while net trading revenue was flat. Non-OTC
contributed total revenue of £254.7 million in FY24, up from £216.3
million in FY23.
Net trading revenue
Net trading revenue was £844.9
million, 10% lower than FY23 due to a reduction in OTC derivatives
revenue.
Net trading revenue performance by product
|
Net trading revenue
(£m)
|
|
FY24
|
FY23
|
Change %
|
OTC derivatives
|
681.0
|
782.0
|
(13%)
|
Exchange-traded
derivatives
|
141.1
|
137.1
|
3%
|
Stock trading and
investments
|
22.8
|
22.7
|
0%
|
Net trading revenue
|
844.9
|
941.8
|
(10%)
|
Net interest income
|
142.4
|
80.8
|
76%
|
Total revenue
|
987.3
|
1,022.6
|
(3%)
|
|
Active clients (000)
|
Net trading revenue
per client (£)
|
|
FY24
|
FY23
|
Change %
|
FY24
|
FY23
|
Change %
|
OTC derivatives
|
179.1
|
189.5
|
(6%)
|
3,803
|
4,126
|
(8%)
|
Exchange-traded
derivatives1
|
92.5
|
91.6
|
1%
|
1,526
|
1,490
|
2%
|
Stock trading and
investments
|
86.9
|
90.8
|
(4%)
|
263
|
250
|
5%
|
Total2
|
346.2
|
358.3
|
(3%)
|
|
|
|
1 Exchange traded derivatives revenue per client calculation
excludes revenue generated from the Group's US market maker in
FY23.
2 Total Group active clients have been adjusted to remove the
clients who are active in more than one product category
(multi-product clients) to give a unique client count. In FY24
there were 12,200 multi-product clients, compared with 13,700 in
FY23.
|
First trades (000)
|
|
FY24
|
FY23
|
Change %
|
|
OTC derivatives
|
41.1
|
45.5
|
(10%)
|
Exchange-traded
derivatives
|
24.0
|
21.9
|
10%
|
Stock trading and
investments
|
8.5
|
9.6
|
(12%)
|
Total1
|
69.9
|
72.6
|
(4%)
|
1 Total Group first trades have been adjusted to remove the
clients who traded in more than one
product category to give a
unique first trade count.
OTC
derivatives
OTC derivatives net trading
revenue of £681.0 million was down 13%, reflecting a reduction in
client activity, with active clients declining 6% on FY23 and
average revenue per client down 8%. The reduction in active clients
was observed in Q1, with clients remaining stable since. Lower
demand in the market resulted in first trades reducing by 10% on
FY23.
OTC derivatives trading revenue
declined year-on-year in all geographies, with the exception of
Singapore, where trading revenue of £72.1 million increased 6%,
reflecting an increase in trading from our larger clients. Average
revenue per client increased 31%, offsetting a 20% reduction in
active clients.
UK and EU trading revenue was
£342.5 million, down 14%. Within this, active clients declined 7%
year-on-year and revenue per client was down 8%.
Australia OTC derivatives net
trading revenue of £80.9 million decreased 15%, reflecting lower
active clients and revenue per client, down 5% and 10%
respectively.
Japan OTC derivatives net trading
revenue was £78.5 million, down 21% against the record FY23
performance. Active clients were down 2% and revenue per client was
down 19%.
US OTC derivatives net trading
revenue decreased 19% as net trading revenue per client declined
22% year-on-year, while active client numbers were up
4%.
Exchange-traded derivatives
Net trading revenue from
exchange-traded derivatives was £141.1 million, up 3% on
FY23.
In US Dollars, tastytrade's net
trading revenue was up 10% year-on-year to $160.1 million. In
reporting currency, tastytrade's net trading revenue in FY24 was
£127.4 million, up 5% on the prior year. Active clients increased
by 1%, while revenue per client increased 4%. First trades in the
period increased by 10% on FY23.
Spectrum's net trading revenue was
£13.8 million, 12% lower than FY23. Active clients increased by 1%,
with average trading revenue per client down 13%. First trades in
the period increased 10% on FY23.
Stock trading and investments
Net trading revenue from stock
trading and investments was £22.8 million, in line with FY23.
Active clients reduced by 4% on the prior period while average
revenue per client increased by 5%. Assets under administration
increased to £3.9 billion at the end of FY24, up from £3.3 billion
at the end of FY23. First trades were down 12% on FY23.
Net interest income
Net interest income on client
balances in FY24 was £142.4 million, up 76% on the prior year total
of £80.8 million as interest rates remained elevated. Interest
income represented 14% of total revenue, increasing from 8% in
FY23, reflecting the consistently high interest rates across the
period and significant client balances.
In our US businesses, client cash
balances at the end of the period were $1.9 billion (31 May 2023:
$1.9 billion). This contributed £75.6 million of interest income
(FY23: £50.4 million).
Outside the US, client balances of
£2.7 billion were in line with prior year (31 May 2023: £2.7
billion). This included £380.3 million of qualifying money market
funds (31 May 2023: nil) for which the interest is recognised in
net interest income and £430.5 million of client funds on the
balance sheet (31 May 2023: £420.4 million) for which the interest
is recognised within net finance income. Interest income earned on
the segregated client money balance and money market funds was
£66.8 million compared with £30.4 million in FY23.
Adjusted operating costs
Adjusted operating costs exclude
£55.5 million of one-off items (FY23: £43.9 million) and recurring
non-cash items in order to present a more accurate view of
underlying performance. A reconciliation of alternative performance
measures used in this report is shown in the appendix. Adjusted
operating costs for FY24 were £564.1 million, 4% higher than
FY23.
Adjusted operating costs
£m
|
FY24
|
FY23
|
Change %
|
Fixed remuneration
|
199.1
|
188.5
|
6%
|
Advertising and
marketing
|
83.1
|
93.5
|
(11%)
|
Revenue related costs
|
57.5
|
47.9
|
20%
|
IT, structural market data and
communications
|
51.5
|
42.5
|
21%
|
Depreciation and
amortisation
|
44.5
|
29.6
|
50%
|
Legal and professional
|
31.9
|
25.9
|
24%
|
Other costs
|
50.4
|
63.1
|
(20%)
|
Variable remuneration
|
46.1
|
50.0
|
(8%)
|
Total operating costs
|
564.1
|
541.0
|
4%
|
|
|
|
|
Headcount - average
|
2,695
|
2,616
|
3%
|
Headcount - year end
|
2,570
|
2,672
|
(4%)
|
FY24 fixed remuneration was £199.1
million, up 6% on FY23. This reflects inflationary salary
increases, a 3% increase in average headcount across the period as
we continued to invest in the Group's strategic and incubator
projects, and a reduction in the capitalisation of salary costs in
year, which decreased £3 million on FY23. Following the launch of
the operational efficiency programme in October 2023, headcount
reduced in H2, with year-end headcount of 2,570, down 4% on FY23
(FY23: 2,672).
Advertising and marketing spend in
the year was £83.1 million, a decrease of 11% as acquisition spend
was scaled back in line with lower market demand. Further savings
were realised as a result of more targeted resource allocation to
enhance marketing return on investment.
Revenue related costs include
market data charges, client payment charges, provisions for client
and counterparty credit losses and brokerage trading fees. Revenue
related costs increased by 20% to £57.5 million, due to higher
client and counterparty credit losses (increasing to £15.5 million,
from £1.1 million in FY23). This was due to an isolated provision
for debts arising from a small number of professional clients. All
other costs in this category decreased year-on-year, reflecting
lower levels of client activity.
IT maintenance, structural market
data charges, and communications costs were £51.5 million,
increasing 21% on FY23, reflecting ongoing investment in technology
including security enhancements, deployment of our cloud strategy
and projects to support future growth. Inflationary pressures on
contract renewals also increased costs in this category.
Depreciation and amortisation
increased by £14.9 million to £44.5 million in FY24. Our
organisational restructure led to a reprioritisation of certain
investment and development activities. As a result, the remaining
value of the dailyfx.com domain name has been impaired and certain
intangible work in progress has been derecognised leading to
non-recurring costs of £11.1 million. The increase also reflects
the full year impact of the Small Exchange, Inc. intangible assets
acquired in March of FY23 and an increase in capital expenditure
and internal development in prior periods to support operational
projects, including the data centre migration.
Legal and professional fees were
£31.9 million, an increase of 24%, reflecting higher costs in
relation to strategic and operational projects and ongoing
litigation.
Other costs, which include travel
and entertainment, regulatory fees and irrecoverable VAT, decreased
by 20% to £50.4 million, reflecting a reduction in irrecoverable
VAT, regulatory fees, and lower staff-related costs.
Variable remuneration of £46.1
million includes the general bonus accrual, share schemes and sales
bonuses. The charge for the general bonus pool was £21.8 million,
down 21% reflecting the Group's performance against internal
targets relative to the comparative period. Share scheme costs,
which relate to long-term incentive plans for senior management,
increased by 12% to £18.8 million (FY23: £16.8 million) including
one-off acceleration of charges for outgoing executives' share
awards.
Net finance income
Net finance income in the period
was £35.1 million, up from £14.0 million in FY23. Within this,
finance income was £59.9 million (FY23: £30.2 million), partly
offset by finance costs of £24.8 million (FY23: £16.2 million).
Group finance costs are largely fixed, however finance income,
which reflects the interest earned on corporate balances including
client funds on balance sheet, benefitted from higher interest
rates.
Profit before tax
Profit before tax was £456.3
million on an adjusted basis, down 7% (FY23: £490.5
million).
Taxation
The adjusted tax expense of
£106.0 million (FY23: £94.0 million) is
higher than the prior year, despite lower profit before tax, due to
the increase in the effective tax rate from 19.2% in FY23 to 23.2%
in FY24 reflecting the increase in the UK Corporate Tax rate from
19% to 25% on 1 April 2023.
The effective tax rate continues
to be lower than the main rate of UK Corporate Tax as a result of
lower tax rates in overseas jurisdictions where the Group operates
and through the Group's use of standard tax incentives in line with
its tax strategy which is available on the IG Group
website.
The Group is not expected to be
significantly impacted by the implementation of a global minimum
effective tax rate of 15%. The effective tax rate will continue to
be sensitive to several factors, including taxable profit by
geography, tax rates levied in those geographies, and the
availability and use of tax incentives and tax losses.
Earnings Per Share
Basic earnings per share reduced
to 90.3 pence (FY23: 94.7 pence) on an adjusted basis. This was due
to a reduction in adjusted profit after tax of 12%, which was
offset by a lower weighted average number of shares, reducing from
418.7 million shares in FY23 to 387.8 million shares in FY24, as a
result of the ongoing share buyback.
Return of shareholder funds
In line with the Capital
Allocation Framework, for FY24 the Board has recommended a
progressive final dividend per share of 32.64 pence (FY23: 31.94
pence). This will be paid on 17 October 2024, following approval at
the Company's Annual General Meeting, to those shareholders on the
register at the close of business on 20 September 2024. This
represents a total FY24 dividend of 46.20 pence per share (FY23:
45.20 pence).
During FY24, the Group has also
repurchased 35,727,693 shares for total consideration of £247.5
million (including related costs of £4.0 million) as part of the
approved share buyback programme.
Summary Group Balance Sheet
The Group continues to operate
with a strong and liquid balance sheet, with net assets at 31 May
2024 of £1,889.5 million (31 May 2023: £2,014.6 million). The
balance sheet is presented on a management basis which reflects the
Group's use of alternative performance measures to monitor its
financial position. A reconciliation of these alternative
performance measures to the corresponding UK-adopted International
Accounting Standards balances is shown in the Appendix.
£m
|
31 May 2024
|
31 May 2023
|
Change %
|
Goodwill
|
599.0
|
611.0
|
(2%)
|
Intangible assets
|
216.6
|
276.5
|
(22%)
|
Property, plant and
equipment1
|
20.3
|
17.6
|
15%
|
Operating lease net
liabilities
|
(2.3)
|
(2.2)
|
5%
|
Other investments
|
1.8
|
1.2
|
50%
|
Investments in
associates
|
9.9
|
12.5
|
(21%)
|
Fixed assets
|
845.3
|
916.6
|
(8%)
|
Cash2
|
912.3
|
795.2
|
15%
|
Net amounts due from
brokers
|
783.1
|
825.3
|
(5%)
|
Own funds in client
money
|
47.3
|
75.1
|
(37%)
|
Financial investments
|
115.7
|
234.1
|
(51%)
|
Liquid assets
|
1,858.4
|
1,929.7
|
(4%)
|
Issued debt
|
(299.5)
|
(299.3)
|
-
|
Client funds held on balance
sheet
|
(430.5)
|
(420.4)
|
2%
|
Turbo warrants
|
(4.5)
|
(2.7)
|
67%
|
Own
funds
|
1,123.9
|
1,207.3
|
(7%)
|
Working capital
|
(55.2)
|
(74.4)
|
(26%)
|
Net tax receivable
|
2.2
|
2.7
|
(16%)
|
Net deferred income tax
liability
|
(26.7)
|
(37.6)
|
(29%)
|
Net
assets
|
1,889.5
|
2,014.6
|
(6%)
|
1 Excludes right-of-use assets
2 As per the Consolidated Statement of Cash Flows
The Group continues to be highly
cash generative, with £360.0 million (FY23: £221.4 million)
generated from operations. For management purposes the Group
measures the strength of its liquidity position using an own funds
measure rather than cash, which is a combination of assets held by
the Group, which already are, or can be
deployed to meet its liquidity requirements, less restricted cash
or amounts payable to clients. This broader measure is a more
stable metric to assess the Group's liquidity position.
The Group saw a decline of £71.3
million in the carrying value of its fixed assets in the period.
Most of the Group's intangible assets, including goodwill, are US
Dollar assets and foreign exchange movements resulted in a fall in
the value of fixed assets by £16.5 million. There was also
continued amortisation of intangible assets associated with the
tastytrade acquisition of £31.3 million and depreciation of the
Group's tangible assets of £18.9 million. Organisational changes
during FY24 which included allocating technology and marketing
resources from central teams into divisional teams, resulted in a
reprioritisation of internal development activities, and the
derecognition of £3.1 million intangible
work in progress. The decision to discontinue investment in the
dailyfx.com website led to an £8.1 million impairment of the domain
name.
The impact on net assets of the
fall in value of fixed assets and own funds was offset by a £19.2
million decrease in working capital requirements and a £10.4
million fall in current and deferred tax liabilities. Working
capital requirements at 31 May 2024 were lower than at 31 May 2023
due to a lower bonus reflecting the Group's performance for the
year, and higher interest receivable on Group cash balances due to
continued higher interest rates. Current and deferred tax
liabilities have reduced predominately from the unwinding of a
deferred tax liability which was recognised upon the acquisition of
tastytrade.
The Group's own funds decreased by
£83.4 million during FY24 due to a £71.3 million decrease in liquid
assets and a £10.1 million increase in client funds on balance
sheet. The ongoing share buyback continues to be a key driver in
the reduction of the Group's own funds balance. The Group made cash
payments of £245.6 million (FY23: £175.2 million) to acquire and
cancel shares in the period.
£m
(unless stated)
|
FY24
|
FY23
|
Own funds generated from operations
|
453.0
|
467.5
|
As a percentage of operating
profit
|
123%
|
107%
|
Income taxes paid
|
(102.9)
|
(116.6)
|
Net own funds generated from operations
|
350.1
|
350.9
|
Net own funds generated from/(used in) investing
activities
|
11.9
|
(18.8)
|
Purchase of own shares held in
Employee Benefit Trust
|
(13.3)
|
(14.6)
|
Payments made for share
buyback
|
(245.6)
|
(175.2)
|
Equity dividends paid to owners of
the parent
|
(178.3)
|
(188.1)
|
Net own funds (used in) financing activities
|
(437.2)
|
(377.9)
|
Decrease in own funds
|
(75.2)
|
(45.8)
|
Own funds at the start of the period
|
1,207.3
|
1,253.8
|
Decrease in own funds
|
(75.2)
|
(45.8)
|
Impact of movement in foreign
exchange rates
|
(8.2)
|
(0.7)
|
Own funds at the end of the period
|
1,123.9
|
1,207.3
|
Liquidity
The Group maintains a strong
liquidity position, ensuring sufficient liquidity under both normal
circumstances and stressed conditions to meet its liquidity
requirements. These liquidity requirements
include broker margin, regulatory liquidity and working capital
needs of its subsidiaries, and the funding of adequate buffers in
segregated client money accounts.
£m
|
31 May 2024
|
31 May 2023
|
Change %
|
Liquid assets
|
1,858.4
|
1,929.7
|
(4%)
|
Broker margin
requirement
|
(677.7)
|
(678.2)
|
-
|
Cash balances in non-UK
subsidiaries
|
(381.1)
|
(383.5)
|
(1%)
|
Own funds in client
money
|
(47.3)
|
(75.1)
|
(37%)
|
Available liquidity
|
752.3
|
792.9
|
(5%)
|
Available liquidity is a measure
of the Group's ability to meet additional liquidity requirements at
short notice, typically increases in broker margin. Balances such
as non-UK cash balances and own funds in client money are excluded
from this measure as these cannot be immediately
allocated.
The Group optimises its liquidity
position by centralising funds within the UK, where the majority of
market risk resides. This ensures sufficient liquidity can be
deployed as required. The Group continually reviews and optimises
the return on deploying this liquidity, through fixed income
instruments, money market funds and bank deposits. Significant time
has been invested into developing strong banking relationships to
ensure competitive interest rates on bank deposits.
The Group's available liquidity is
supported by its strong and diverse funding profile. This
includes £328.7 million of liquidity
through title transfer arrangements. The Group has a £400.0 million
revolving credit facility and a £250.0 million committed repo
facility providing the ability to quickly and efficiently convert
financial investments into cash.
The Group's funding profile is
further supported by its £1.0 billion Euro Medium-Term Note
programme, from which it has £300.0 million notes in issue,
maturing November 2028. The Group maintains an active dialogue with
a variety of debt stakeholders, leading to the Group's long-term credit rating from Fitch being placed on
positive outlook in September 2023.
In addition to the cash recognised
on the balance sheet, as at 31 May 2024,
the Group held £2,282.6 million (31 May 2023: £2,303.9 million) of
client money in segregated bank accounts and qualifying money
market funds, which are held separately from the Group's own cash
balances. Client balances are excluded from both the Group's
balance sheet and liquid assets as the Group does not have control
over these balances.
Regulatory capital
The Group is supervised on a
consolidated basis by the UK's Financial Conduct Authority (FCA),
which requires it to hold sufficient regulatory capital at both
Group and in its UK-regulated entities to
cover risk exposures. The Group's capital headroom was £638.3
million (31 May 2023: £498.9 million).
£m
|
31 May 2024
|
31 May 2023
|
Shareholders' funds
|
1,889.5
|
2,014.6
|
Less foreseeable / declared
dividends
|
(118.0)
|
(127.6)
|
Less remaining share
buyback
|
(29.7)
|
(22.5)
|
Less goodwill and intangible
assets
|
(767.3)
|
(829.9)
|
Less deferred tax assets
|
(24.6)
|
(23.2)
|
Less significant investments in
financial sector entities
|
(11.7)
|
(13.7)
|
Less value adjustment for prudent
valuation
|
(1.3)
|
(1.4)
|
Regulatory capital resources
|
936.9
|
996.3
|
Total requirement
|
298.6
|
497.4
|
Headroom above minimum capital requirement
|
638.3
|
498.9
|
The Group's regulatory capital
resources, which totalled £936.9 million at 31 May 2024 (31 May 2023: £996.3 million) are an adjusted
measure of shareholders' funds. Shareholders' funds comprise share
capital, share premium, retained earnings, translation reserve,
merger reserve and other reserves.
The Group's regulatory capital
requirement as at 31 May 2024 was £298.6 million (31 May 2023:
£497.4 million), which has reduced significantly compared to the
previous year. The FCA completed its Supervisory Review and
Evaluation Process during the year and the outcome was a reduction
in the overall regulatory capital requirement. This reduction
reflects the removal of the transitional Individual Capital
Guidance, and regulatory capital is now based on the Group's own
assessment of capital requirements which varies daily with our
internal risk assessment.
The main factors which drive the
Group's internal risk assessment are market, credit and operational
risks. Credit risks include potential
client debts in the event of a sudden market move as well as
exposure to hedging counterparties and banking counterparties
should one or more of them default. Operational risk covers a wide
range of potentially severe events, from a ransomware attack to a
manual error when entering a trade on the dealing system. Market
risk varies on a daily basis since the Group is counterparty to a
high volumes of trades from clients around the world and positions
are changing constantly. The largest daily
movement in capital requirements during FY24 was £32.6
million.
The Group also has regulated
entities in overseas jurisdictions which are subject to the rules
set by other regulators. These regulations are calculated on a
different basis to the FCA regulations and may result in
incremental capital requirements or the holding of additional
buffers.
1. Basis of
preparation
The financial information in this
announcement is derived from IG Group Holdings plc's Group
Financial Statements but does not, within the meaning of Section
435 of the Companies Act 2006, constitute statutory accounts for
the years ended 31 May 2024 or 31 May 2023.
Although the financial information
has been prepared in accordance with the recognition and
measurement criteria of UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 (UK
IAS), this preliminary statement does not itself contain sufficient
information to comply with UK IAS and the applicable legal
requirements of the Companies Act 2006. The Group will publish its
Annual Report and Financial Statements for the year ended 31 May
2024 in August 2024 and these will be delivered to the Registrar of
Companies following the Company's Annual General Meeting on 18
September 2024.
The Group's auditors,
PricewaterhouseCoopers LLP, have reported on those Financial
Statements and the report was unqualified, did not emphasise any
matters nor contained any statements under Section 498(2) or (3) of
the Companies Act 2006.
Copies of full Financial Statements
will be available via the Group's corporate website at
www.iggroup.com in August 2024. Copies will also be available for
posting to all shareholders upon request from the Group's
Headquarters, Cannon Bridge House, 25 Dowgate Hill, London, EC4R
2YA.
The Financial Statements are
prepared on a going concern basis and are consistent with the
Group's 2023 Annual Report.
There were no new standards,
amendments or interpretations issued and made effective during the
current year which have had a material impact on the
Group.
Restatement of comparatives
Proceeds from sale of financial
investments of £251.8 million (31 May 2023: £251.7 million) and
payments for purchase of financial investments of £89.9 million (31
May 2023: £477.5 million) were presented on a net basis in prior
year. However, in the current year these balances have been
presented as separate line items in the Consolidated Statement of
Cash Flows, in accordance with requirements of IAS 7 - Statement of
Cash Flow. To ensure consistency with the current year, comparative
figures have also been presented separately.
2. Segmental analysis
The Executive Directors are the
Group's Chief Operating Decision Maker (CODM). Management has
determined the reportable segments based on the information
reviewed by the CODM for the purposes of allocating resources and
assessing performance.
The Group manages market risk and a
number of other activities on a Group-wide portfolio basis and
accordingly a large proportion of costs are incurred centrally.
These central costs are not allocated to individual segments for
decision-making purposes for the CODM, and, accordingly, these
costs have not been allocated to segments. Additionally, the
Group's assets and liabilities are not allocated to individual
segments and not reported as such for decision making purposes to
the CODM. Therefore, the segmental analysis does not include a
measure of profitability, nor a complete segmented balance sheet,
as this would not reflect the information which is received by the
CODM on a regular basis.
The CODM are presented a view of
total revenue split by product. Total revenue is an alternative
performance measure which comprises net trading revenue and net
interest on client funds.
Total revenue by reportable segment
Net trading revenue represents
trading revenue that is generated from clients trading activities
after deducting introducing partner commissions. Net interest on
clients funds represents interest earned on client money balances
after deducting interest paid to clients. These two amounts
collectively make up total revenue. The CODM uses total revenue as
the primary measure of performance of the segments. The CODM
considers business performance from a product perspective, split
into OTC derivatives, exchange-traded derivatives, stock trading
and investments and net interest on clients funds. The products
shown in the segmental analysis are aggregated where these products
are economically similar in nature.
2.
Segmental analysis (continued)
The segmental breakdown of total
revenue is as follows:
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
OTC derivatives
|
681.0
|
782.0
|
Exchange-traded
derivatives
|
141.1
|
137.1
|
Stock trading and
investments
|
22.8
|
22.7
|
Net trading revenue
|
844.9
|
941.8
|
Net interest on client
funds
|
142.4
|
80.8
|
Total revenue
|
987.3
|
1,022.6
|
The CODM also considers business
performance based on geographical location. This geographical split
reflects the location of the office that manages the underlying
client relationship.
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
Net trading revenue by geography:
|
|
|
UK
|
280.3
|
322.0
|
Australia
|
84.7
|
99.8
|
Japan
|
78.5
|
99.3
|
Singapore
|
72.4
|
68.8
|
EMEA Non-EU
|
47.8
|
55.3
|
Emerging markets
|
36.7
|
39.5
|
UK, APAC & Emerging markets
|
600.4
|
648.7
|
US
|
143.2
|
140.9
|
EU
|
101.3
|
116.2
|
Net trading revenue
|
844.9
|
941.8
|
Net interest on client funds -
US
|
75.6
|
50.4
|
Net interest on client funds -
Other
|
66.8
|
30.4
|
Total revenue
|
987.3
|
1,022.6
|
The Group does not derive more than
10% of revenue from any one single client.
The segmental breakdown of
non-current assets excluding financial investments, other
investments and deferred tax assets, based on geographical location
is as follows:
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
US
|
716.5
|
770.7
|
UK
|
133.3
|
152.6
|
EMEA Non-EU
|
9.1
|
4.7
|
EU
|
8.0
|
5.7
|
Japan
|
2.4
|
1.9
|
Australia
|
2.3
|
0.4
|
Singapore
|
1.1
|
0.3
|
Emerging markets
|
-
|
0.1
|
Total non-current assets
|
872.7
|
936.4
|
3. Taxation
Tax on profit on ordinary
activities
Tax charged in the Consolidated
Income Statement:
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
Current income tax:
|
|
|
UK corporation tax
|
68.9
|
75.1
|
Non-UK corporation tax
|
34.6
|
24.3
|
Adjustment in respect of prior
years
|
2.0
|
(6.1)
|
Total current income tax
|
105.5
|
93.3
|
Deferred income tax:
|
|
|
Origination and reversal of
temporary differences
|
(8.4)
|
(7.4)
|
Adjustment in respect of prior
years
|
(2.8)
|
0.8
|
Impact of change in tax rates on
deferred tax balances
|
(1.2)
|
(0.1)
|
Total deferred income tax
|
(12.4)
|
(6.7)
|
Total tax expense
|
93.1
|
86.6
|
|
|
|
Tax expense attributable
to:
|
|
|
Continuing operations
|
93.1
|
86.2
|
Discontinued operations
|
-
|
0.4
|
|
|
|
Tax expense not charged to
Consolidated Income Statement:
|
|
|
Tax
recognised in other comprehensive expense
|
2.2
|
(6.2)
|
Tax
recognised directly in equity
|
(1.4)
|
(1.0)
|
Reconciliation of the total tax
expense
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
Profit before taxation
|
|
|
From continuing
operations
|
400.8
|
449.9
|
From discontinued
operations
|
-
|
1.7
|
Total profit before tax
|
400.8
|
451.6
|
Profit before tax multiplied by the
UK standard rate of corporation tax
|
|
|
of 25.0%
(31 May 2023: 20.0%)
|
100.2
|
90.3
|
Expenses not deductible for tax
purposes
|
3.0
|
1.6
|
Current year losses not recognised
as deferred tax assets
|
1.2
|
0.3
|
Adjustment in respect of prior
years
|
0.3
|
(5.3)
|
Patent Box deduction
|
(7.0)
|
(3.2)
|
Recognition and utilisation of
losses previously not recognised
|
(2.8)
|
(0.4)
|
Impact of change in tax rates on
deferred tax balances
|
(1.2)
|
(0.1)
|
Impact of overseas tax
rates
|
(0.6)
|
3.4
|
Total tax expense attributable
to:
|
93.1
|
86.6
|
Continuing operations
|
93.1
|
86.2
|
Discontinued operations
|
-
|
0.4
|
The standard UK corporation tax rate
for the year ended 31 May 2024 is 25.0% (31 May 2023: 20.0%).
Taxation outside the UK is calculated at the rates prevailing in
the relevant jurisdictions. The tax expense in the Consolidated
Income Statement for the year can be reconciled as set out
below:
3. Taxation
(continued)
The effective tax rate for the year
is 23.2% (31 May 2023: 19.2%).
The deferred tax assets and
liabilities have been assessed at the tax rates that are expected
to apply when the related asset is realised or liability
settled.
Deferred income tax
assets
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
Tax losses available for offset
against future profits
|
4.5
|
3.8
|
Temporary differences arising on
share-based payments
|
4.4
|
4.8
|
Temporary differences arising on
fixed assets
|
-
|
1.1
|
Other temporary
differences
|
15.7
|
13.5
|
|
24.6
|
23.2
|
Deferred income tax
liabilities
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
Temporary differences arising on
business combinations
|
(47.8)
|
(57.6)
|
Temporary differences arising on
fixed assets
|
(1.3)
|
(0.2)
|
Other temporary
differences
|
(2.2)
|
(3.0)
|
|
(51.3)
|
(60.8)
|
Deferred income tax
recovery
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
Deferred tax assets to be recovered
within 12 months
|
9.8
|
4.4
|
Deferred tax assets to be recovered
after 12 months
|
14.8
|
18.8
|
|
24.6
|
23.2
|
Deferred income tax
settlement
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
Deferred tax liabilities to be
settled within 12 months
|
(8.4)
|
(7.4)
|
Deferred tax liabilities to be
settled after 12 months
|
(42.9)
|
(53.4)
|
|
(51.3)
|
(60.8)
|
The recognised deferred tax asset
reflects the extent to which it is considered probable that future
taxable profits can be offset against the tax losses carried
forward.
Share-based payment awards have been
charged to the Consolidated Income Statement but are not allowable
as a tax deduction until the awards are exercised. The excess of
the expected tax relief in future years over the amount charged to
the income statement is recognised as a credit directly to
equity.
3. Taxation
(continued)
Unrecognised deferred tax
assets
|
31 May 2024
|
31 May
2023
|
|
Gross unrecognised losses for
tax purposes
|
Tax value of
loss
|
Expiry date
|
Gross
unrecognised losses for tax purposes
|
Tax value
of loss
|
Expiry
date
|
|
£m
|
£m
|
|
£m
|
£m
|
|
Overseas trading losses
|
6.0
|
1.4
|
N/A
|
16.1
|
4.1
|
N/A
|
UK capital losses
|
23.5
|
5.9
|
N/A
|
23.5
|
5.9
|
N/A
|
|
29.5
|
7.3
|
|
39.6
|
10.0
|
|
The Group has an unrecognised
deferred tax asset of £7.3 million (31 May 2023: £10.0 million) in
respect of prior and current year losses, the recoverability of
which is dependent on sufficient taxable profits of the
entities.
The movement in the deferred income
tax assets included in the Consolidated Statement of Financial
Position is as follows:
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
At the beginning of the
year
|
23.2
|
17.5
|
Tax credited/(charged) to the
Income Statement
|
4.5
|
(0.3)
|
Tax (charged)/credited to other
comprehensive expense
|
(2.2)
|
6.2
|
Tax credited directly to
equity
|
0.1
|
0.6
|
Impact of movements in foreign
exchange rates
|
0.1
|
-
|
Reallocations between deferred tax
assets and liabilities
|
(1.1)
|
(0.8)
|
At the end of the year
|
24.6
|
23.2
|
|
|
|
The movement in the deferred income
tax liability included in the Consolidated Statement of Financial
Position is as follows:
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
At the beginning of the
year
|
(60.8)
|
(67.2)
|
Amounts arising on acquisitions in
the year
|
-
|
(0.6)
|
Tax credited to the income
statement
|
7.9
|
7.0
|
Impact of movements in foreign
exchange rates
|
0.5
|
(0.8)
|
Reallocations between deferred tax
assets and liabilities
|
1.1
|
0.8
|
At
the end of the year
|
(51.3)
|
(60.8)
|
Factors affecting the tax charge in
future years
Factors that may affect the Group's
future tax charge include the geographic location of the Group's
earnings, the tax rates in those locations, changes in tax
legislation, the recognition of previously unrecognised tax losses
and the resolution of open tax issues. The Group's future tax
charge may also be impacted by changes in the Group's business
activities, client composition and regulatory status, which could
impact the Group's exemption from the UK Bank Corporation Tax
Surcharge.
The calculation of the Group's total
tax charge involves a degree of estimation and judgement with
respect to the recognition of deferred tax assets, which are
dependent on the Group's estimation of future profitable income,
transfer pricing and of certain items whose tax treatment cannot be
finally determined until resolution has been reached with the
relevant tax authority. The Group operates in a number of
jurisdictions worldwide, and tax laws in those jurisdictions are
themselves subject to change.
3. Taxation
(continued)
The OECD Pillar 2 global minimum tax
rules come into force for the Group from 1 June 2024. The tax
footprint of the Group is such that the Pillar 2 rules are not
expected to have a material impact on the Group's tax charge as
there is currently insignificant activity in low tax jurisdictions.
The Group has applied the exception under IAS 12 - Income taxes to
recognising and disclosing information about deferred taxes related
to Pillar 2 and therefore, there was no impact on the recognition
and measurement of deferred tax balances as a result of the
legislation being substantively enacted.
The Group determines its tax
liability by taking into account its tax risks and it makes
provision for those matters where it is probable that a tax
liability will arise. Tax payable may ultimately be materially more
or less than the amount already accounted for.
4. Earnings per
ordinary share
Basic earnings per ordinary share is
calculated by dividing the profit for the year attributable to
ordinary equity holders of the parent by the weighted average
number of ordinary shares in issue during the year, excluding
shares held as own shares in the Group's Employee Benefit Trusts.
Diluted earnings per ordinary share is calculated using the same
profit figure as used in basic earnings per ordinary share and by
adjusting the weighted average number of ordinary shares assuming
the vesting of all outstanding share scheme awards.
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
Profit attributable to owners of
the parent (£m)
|
307.7
|
365.0
|
Weighted average number of shares:
|
|
|
Basic
|
387,771,781
|
418,693,685
|
Dilutive effect of share-based
payments
|
4,648,739
|
3,869,357
|
Diluted
|
392,420,520
|
422,563,042
|
|
Year ended
31 May
2024
|
Year
ended
31 May
2023
|
Basic earning per ordinary
share
|
79.4p
|
87.2p
|
- Attributable to continuing operations
|
79.4p
|
86.9p
|
- Attributable to discontinued operations
|
0.0p
|
0.3p
|
|
|
|
Diluted earning per ordinary
share
|
78.4p
|
86.4p
|
- Attributable to continuing operations
|
78.4p
|
86.1p
|
- Attributable to discontinued operations
|
0.0p
|
0.3p
|
5. Dividends paid and
proposed
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
Final dividend for FY23 at 31.94
pence per share (FY22: 31.24p)
|
126.7
|
133.2
|
Interim dividend for FY24 at 13.56
pence per share (FY23: 13.26p)
|
51.6
|
54.9
|
|
178.3
|
188.1
|
A final dividend for the year ended
31 May 2024 of 32.64 pence per share was approved by the Board on
24 July 2024 and has not been included as a liability at 31 May
2024. This dividend will be paid on 17 October 2024, following
approval at the Company's Annual General Meeting (AGM), to those
members on the register at the close of business on 20 September
2024.
6. Goodwill
The movement in the goodwill balance
for the year is as follows:
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
At the beginning of the
year
|
611.0
|
604.7
|
Impact of foreign exchange
movement
|
(12.0)
|
6.3
|
At the end of the year
|
599.0
|
611.0
|
Goodwill has been allocated for
impairment testing purposes to the CGUs as follows:
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
US
|
497.2
|
509.2
|
UK
|
100.9
|
100.9
|
South Africa
|
0.8
|
0.8
|
Australia
|
0.1
|
0.1
|
|
599.0
|
611.0
|
Goodwill
arose as follows:
· US - from the
acquisition of tastytrade on 28 June 2021
· UK - from the reorganisation of the UK
business on 5 September 2003
· South
Africa - from the acquisition of Ideal CFDs on 1 September
2010
· Australia - from the acquisition of the non-controlling
interest in IG Australia Pty Limited in the year ended 31 May
2006.
Impairment testing
The Group's goodwill balance has been
subject to a full impairment assessment and there has not been any
impairment recognised for the above CGUs (31 May 2023: £nil). For
the purposes of the Group's impairment testing of goodwill, the
carrying amount of each CGU is compared to the estimated
recoverable amount of the relevant CGU and any deficits are
considered impairments requiring recognition in the
year.
The carrying amount of a CGU includes
only those assets that can be attributed directly to it, or
allocated on a reasonable and consistent basis.
The estimated recoverable amount for
each CGU is based upon the higher of the value-in-use (VIU) and the
Fair Value Less Cost of Disposal (FVLCD) for each CGU. For all
CGUs, the recoverable amount was higher than the carrying value and
was determined using the VIU method. The Group's largest goodwill
balance is associated with the US CGU.
Key assumptions used in the calculation of the recoverable
amount of the US CGU
The key assumptions for the VIU
calculations are those regarding the future cash flow projections,
long-term growth rate and the discount rates.
Future cash flow
projections:
The future cash
flow projections of seven years were based on the most recent
financial forecasts considered for the US CGU. The future cash flow
projections cover a period of four years, reflecting the period
over which the North American Board strategically assess
performance. A declining growth rate of 14.0% to 6.0% was used to
extrapolate net trading revenue in the final year of the four-year
forecast period for a further three years, as the US business is
not expected to reach a steady state growth rate by the end of year
four. The terminal value was calculated based on the seventh
year.
6. Goodwill
(continued)
The cash flow
projections take into account historical performance, together with
the Group's views on future achievable growth relating to growth of
market share and increased client acquisition. Key assumptions are
the projected annual growth of net trading revenue and EBITDA
margin. Net trading revenue growth is driven by increasing client
numbers based on assumptions relating to acquisition, conversion
and retention of clients. EBITDA margin is based on net trading
revenue, interest on client money and cost assumptions. Interest on
client money is based on our expectation of future longer term
interest rates and increases in total client money balances as the
underlying client base increases during the forecasted period.
Revenue related costs are forecasted to increase over the four year
period, whilst operating costs such as marketing and headcount
expenditure are expected to grow to support the future growth in
revenue. The cash flow projections also take into account
assumptions relating to working
capital
requirements and capital expenditure.
Long-term growth:
The long-term
growth is used to extrapolate the cash flows to perpetuity for the
US CGU. A long-term growth rate of 2.0% (31 May 2023: 2.0%) has
been applied to derive a terminal value based on the cash flows in
year seven.
Discount rates:
The discount rate used to calculate
the recoverable amount of the US CGU is based on a post-tax
weighted average cost of capital (WACC). The discount rate depends
on a number of inputs reflecting the current market assessment of
the time value of money, determined by external market information,
and inputs relating to the risks associated with the cash flows
which are subject to management's judgement.
A pre-tax discount rate is derived
from the post-tax WACC. The pre-tax discount rate applied to the
seven-year cash flow period and thereafter is 20.8% (31 May 2023:
19.6%). The year-on-year movement in the discount rate is as a
result of rising interest rates and the change in the weighting
between cost of equity and debt.
Sensitivity to changes in key assumptions
The recoverable amount exceeds the
carrying amount of the cash-generating unit. The impact of
sensitivities to reasonable changes in a single variable and the
change required to reduce headroom to nil are shown in the tables
below.
The VIU calculation has been subject
to a sensitivity analysis reflecting reasonable changes in
individual key assumptions. The below table shows the impact of
reasonable changes in individual key assumptions for the cash flow
period for 31 May 2024. There is sufficient headroom in the
recoverable amount of the CGU based on the assumptions
made.
FY24 Assumption
|
Sensitivity
applied
|
Reduction in recoverable
amount
£m
|
Impairment
£m
|
Changes required to reduce
headroom to nil
|
Net trading revenue
rate
|
(5.0)%
|
(131.1)
|
nil
|
12.0%
underperformance
|
EBITDA margin
|
(10.0)%
|
(101.2)
|
nil
|
14.4%
underperformance
|
Discount rates
|
0.5%
|
(34.8)
|
nil
|
7.0%
increase
|
Long-term growth rate
|
(0.5)%
|
(20.6)
|
nil
|
7.9%
reduction
|
FY23 Assumption
|
Sensitivity applied
|
Reduction
in recoverable amount
£m
|
Impairment
£m
|
Changes
required to reduce headroom to nil
|
Net trading revenue
rate
|
(5.0)%
|
(104.7)
|
(77.7)
|
1.2%
underperformance
|
EBITDA margin
|
(10.0)%
|
(85.1)
|
(58.1)
|
3.2%
underperformance
|
Discount rates
|
0.5%
|
(29.3)
|
(2.3)
|
0.6%
increase
|
Long-term growth rate
|
(0.5)%
|
(17.9)
|
nil
|
0.8%
reduction
|
Key assumptions used in the calculation of the recoverable
amount of CGUs excluding US
Future cash flow projections:
The Group has changed their
approach to financial planning, with a shorter forecasting period
being used in response to factors both driven by, and impacting,
the industry. The future cash flow projections now cover a period
of three years, reflecting the period over which the Group Board
strategically assess performance. Projected revenue is based on
assumptions relating to client acquisition and trading activity,
and assumptions on interest earned on client funds. Projected costs
are based on assumptions relating to revenue related costs,
including trading and client transaction fees, and structural
costs. Projected profitability takes into account historical
performance and the Group's knowledge of the current market,
together with the Group's views on the future achievable
growth.
6. Goodwill
(continued)
Regional long-term growth:
Regional long-term growth is used
to extrapolate the cash flows to perpetuity for each CGU. After a
management forecast period of three years, a long-term growth rate
of 2.0% (31 May 2023: 2.0%) has been applied to the cash flows to
derive a terminal value.
Discount rates:
The discount rates used to
calculate the recoverable amount of each CGU are based on a
post-tax WACC which is specific to each geographical region. The
discount rate depends on a number of inputs reflecting the current
market assessment of the time value of money, determined by
external market information, and inputs relating to the risks
associated with the cash flow of each individual CGU which are
subject to management's judgement.
The post-tax WACC is grossed up to
a pre-tax discount rate. The pre-tax discount rate applied to
calculate the recoverable amount of each CGU is as
follows:
|
31 May 2024
|
31 May
2023
|
UK
|
14.1%
|
14.0%
|
South Africa
|
19.6%
|
21.0%
|
Australia
|
15.3%
|
16.0%
|
Sensitivity to changes in key assumptions excluding the US
CGU
The VIU calculation has been
subject to a sensitivity analysis reflecting reasonable changes in
individual key assumptions. For all goodwill balances, there is
sufficient headroom in the recoverable amount of the CGU based on
the assumptions made, and there is no reasonably likely scenario
under which material impairment could be expected to occur based on
the testing performed.
7. Financial
investments
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
£m
|
£m
|
UK Government securities
|
460.7
|
606.4
|
Split as:
|
|
|
Non-current portion
|
351.4
|
379.6
|
Current portion
|
109.3
|
226.8
|
|
460.7
|
606.4
|
The Group held £345.0 million UK
Government securities as at 31 May 2024 (31 May 2023: £372.3
million) to satisfy margin requirements.
The Group also held £139.2 million
(31 May 2023: £35.0 million) of financial assets as collateral from
certain brokers, which are not recognised on balance
sheet.
8. Cash and cash
equivalents
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
Cash at bank
|
622.6
|
627.4
|
Money market funds
|
360.6
|
171.1
|
|
983.2
|
798.5
|
The Group's Swiss banking
subsidiary, IG Bank S.A., is required to protect customer deposits
under the FINMA Privileged Deposit Scheme. At 31 May 2024, IG Bank
S.A. was required to hold £34.7 million (31 May 2023: £34.8
million) to satisfy this requirement. This amount, which represents
restricted cash, is included in the cash at bank balance in the
table above.
Segregated client funds and client
funds invested in qualifying money market funds amounted to
£2,282.6 million as at 31 May 2024 (31 May 2023: £2,303.9 million).
Included within these balances is £226.2 million (31 May 2023:
£232.5 million) of segregated client funds for customers of the
Group's Japanese subsidiary, IG Securities Limited. Under Japanese
law, the Group is liable for any credit losses suffered by clients
on the segregated client money balance. The Group also holds
similar balances in its German subsidiary, IG Europe GmbH, where
under German law the Group is liable for credit losses suffered by
clients on segregated client money balances, above the deposit
protection insurance offered by the local financial regulator. The
Group's exposure against these balances amounted to £158.4 million
as at 31 May 2024 (31 May 2023: £95.4 million). Both these amounts
are held off-balance sheet due to the Group being unable to use
these client funds. The interest received on segregated client
funds is included within net operating income.
Reconciliation to Consolidated Statement of Cash
Flows
|
|
31 May 2024
|
31 May
2023
|
|
Note
|
£m
|
£m
|
Cash and cash equivalents as per
Consolidated Statement of Financial Position
|
|
983.2
|
798.5
|
Amounts due to the Pool
|
|
(70.9)
|
(3.3)
|
Balances as per Consolidated
Statement of Cash Flows
|
|
912.3
|
795.2
|
9. Trade receivables
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
Amounts due from brokers
|
456.0
|
486.6
|
Own funds in client
money
|
49.4
|
79.4
|
Amounts due from clients
|
2.9
|
4.4
|
|
508.3
|
570.4
|
Amounts due from brokers represent
balances with brokers and execution partners where the combination
of cash held on account and the valuation of financial derivative
open positions, or unsettled trade receivables, results in an
amount due to the Group.
Own funds in client money represent
the Group's own cash held in segregated clients bank accounts, in
accordance with the FCA CASS rules and similar rules of other
regulators in whose jurisdiction the Group operates and includes
£16.0 million (31 May 2023: £24.7 million) to be transferred to the
Group on the following business day.
Amounts due from clients arise when
clients' total funds held with the Group are insufficient to cover
any trading losses incurred by clients, when clients utilise
trading credit limits or when clients are due to pay the Group fees
in relation to the services received. Amounts due from clients are
presented net of an allowance for impairment.
Allowances for expected credit
losses on trade receivable balances are disclosed in note 30 of the
Group Annual Report.
10. Debt securities in
issue
The Group issued £300.0 million
3.125% senior unsecured bonds due in 2028. The issued debt has been
initially recognised at fair value less transaction fees. As at 31
May 2024, £1.4 million unamortised arrangement fees are recognised
on the Consolidated Statement of Financial Position (31 May 2023:
£1.7 million).
The Group also has access to a £400.0
million revolving credit facility, which increased by £25.0 million
in November 2023 and a further £25.0 million in May 2024 as a
result of accordions to the existing revolving credit facility. The
revolving credit facility will mature in October 2026, after the
Group exercised its option in October 2023 to extend the maturity
for a further year.
Under the terms of the revolving
credit facility agreement, the Group is required to comply with
financial covenants covering maximum levels of leverage and debt to
equity. The Group has complied with all covenants throughout the
year.
11. Trade payables
|
31 May 2024
|
31 May
2023
|
|
£m
|
£m
|
Client funds
|
|
|
UK
|
280.3
|
253.9
|
US
|
47.8
|
56.1
|
EU
|
41.7
|
55.4
|
EMEA Non-EU
|
53.3
|
49.0
|
Japan
|
6.7
|
4.9
|
Singapore
|
0.7
|
1.1
|
Total client funds
|
430.5
|
420.4
|
Amounts due to brokers
|
54.5
|
48.6
|
Issued turbo warrants
|
4.5
|
2.7
|
Amounts due to clients
|
3.8
|
6.3
|
|
493.3
|
478.0
|
Client funds reflects the Group's
liability for client monies which are recognised on balance sheet
in cash and cash equivalents.
Amounts due to brokers represents
balances where the value of unsettled positions, or the value of
open derivative positions held in accounts which are not covered by
an enforceable netting agreement results in an amount payable by
the Group.
Amounts due to clients represents
balances that will be transferred from cash and cash equivalents
into segregated client funds on the following business day in
accordance with the FCA CASS rules and similar rules of other
regulators in whose jurisdiction the Group operates.
12. Contingent liabilities and
provisions
The Group is subject to legal and
regulatory risks in a number of jurisdictions which may result in
legal claims or regulatory action against the Group. Through the
Group's ordinary course of business there are ongoing legal
proceedings and engagements with regulatory authorities. Where
possible, an estimate of the potential financial impact of these
legal proceedings is made using management's best estimate, but
where the most likely outcome cannot be determined no provision is
recognised.
The Group has ongoing litigation in
respect of a class action lawsuit served against two of its
operating entities in 2023. The class action covers the period from
May 2017 to August 2023 and relates to the sale of OTC derivative
products to retail clients in Australia. The action is at an early
procedural stage and it is not possible to determine the potential
outcome or to reliably estimate any potential liability, so no
provision has been recognised.
The Group is also subject to a group
of claims that could have a financial impact of approximately £19.4
million as at 31 May 2024 (31 May 2023: £20.5 million). The claims
are for damages arising from the alleged wrongful reversal of
client nickel trades on 8 March 2022. On 11 July 2024 the Group
obtained a favourable ruling from the High Court of the Republic of
Singapore in relation to one of the claims against the Group,
totalling £13.1 million. There have been no significant
developments during the year in relation to the remainder of the
claims. As a result, no provision has been recognised.
12. Contingent liabilities and
provisions (continued)
Under the terms of the agreement with
the Group's clearing broker for its operations in the US, Apex
Clearing Corporation, the Group guarantees the performance of its
customers in meeting contracted obligations. In conjunction with
the clearing broker, the Group seeks to control the risks
associated with its customer activities by requiring customers to
maintain collateral in compliance with various regulatory and
internal guidelines. Compliance with the various guidelines is
monitored daily and, pursuant to such guidelines, the customers may
be required to deposit additional collateral, or reduce positions
where necessary.
Other than stated above, the Group
does not expect there to be other contingent liabilities that would
have material adverse impact on the Consolidated Financial
Statements. The Group had no material provisions as at 31 May 2024
(31 May 2023: £nil).
13. Share capital and share
premium
|
Number of
shares
|
Share
capital
|
Share
premium account
|
|
|
£m
|
£m
|
Allotted and fully paid
|
|
|
|
(i) Ordinary shares
(0.005p)
|
|
|
|
At 1 June 2022
|
431,574,455
|
-
|
125.8
|
Shares bought back and immediately
cancelled
|
(22,626,613)
|
-
|
-
|
At 31 May 2023
|
408,947,842
|
-
|
125.8
|
At 1 June 2023
|
408,947,842
|
-
|
125.8
|
Shares bought back and immediately
cancelled
|
(35,854,101)
|
-
|
-
|
At
31 May 2024
|
373,093,741
|
-
|
125.8
|
|
|
|
|
(ii) Deferred redeemable shares
(0.001p)
|
|
|
|
At 1 June 2023
|
65,000
|
-
|
-
|
At
31 May 2024
|
65,000
|
-
|
-
|
|
|
|
|
(iii) Redeemable preference shares
(£1.00)
|
|
|
|
At 1 June 2023
|
40,000
|
-
|
-
|
Redemption of preference
shares
|
(40,000)
|
-
|
-
|
At
31 May 2024
|
-
|
-
|
-
|
On 25 January 2023, the Board
approved a buyback of up to £50.0 million. This commenced on 1
April 2023 and completed on 26 July 2023, with the purchase and
cancellation of 3,644,714 shares made during FY24.
On 19 July 2023, the Board approved a
£250.0 million buyback programme. This commenced on 2 August 2023
with a £100.0 million tranche which was completed on 30 October
2023, with the purchase and cancellation of 15,307,818 shares. The
second £150.0 million tranche began on 7 November 2023 and as at 31
May 2024, 16,775,161 shares had been bought back under this tranche
for a total consideration of £122.0 million.
As at 31 May 2024, the Group has
repurchased 35,727,693 shares, with an aggregate nominal value of
£1,786.38, for total consideration of £247.5 million (including
related costs of £4.0 million). As at 31 May 2024 the Group had
66,685 shares repurchased but not cancelled.
No shares were issued in the current
year. Except as the ordinary shareholders have agreed or may
otherwise agree, on winding up of the Company, the balance of
assets available for distribution, after the payment of all of the
Company's creditors and subject to any special rights attaching to
other classes of shares, are distributed among the shareholders
according to the amounts paid up on shares by them.
13. Share capital and share premium
(continued)
Deferred redeemable shares
These shares carry no entitlement to
dividends and no voting rights.
During FY24, there have been no
changes to the Group's deferred redeemable shares (31 May 2023:
none).
Redeemable preference shares
The Group's preference shares were
fully redeemed in December 2023, resulting in a £nil balance as at
31 May 2024 (31 May 2023: £40,000). The preference shares are no
longer required as part of the Group's capital structure so
approval for redemption was granted by the Board on 18 May
2023.
14. Other
reserves
|
Share-based payments reserve
|
Own
shares held Employee Benefit Trusts
|
FVOCI
reserve
|
Share
buyback reserve
|
Total
other reserves
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
At
1 June 2022
|
18.5
|
(6.0)
|
(4.1)
|
-
|
8.4
|
Share buyback liability
|
-
|
-
|
-
|
(2.1)
|
(2.1)
|
Employee Benefit Trust purchase of
shares
|
-
|
(14.6)
|
-
|
-
|
(14.6)
|
Transfer of vested awards from
share-based payment reserve
|
(7.6)
|
-
|
-
|
-
|
(7.6)
|
Equity-settled employee share-based
payments
|
13.3
|
-
|
-
|
-
|
13.3
|
Exercise of employee share
awards
|
(11.3)
|
11.3
|
-
|
-
|
-
|
Change in value of financial assets
held at fair value through other comprehensive income
|
-
|
-
|
(11.9)
|
-
|
(11.9)
|
Share-based payments converted to
cash-settled liabilities
|
(2.4)
|
-
|
-
|
-
|
(2.4)
|
At
31 May 2023
|
10.5
|
(9.3)
|
(16.0)
|
(2.1)
|
(16.9)
|
At
1 June 2023
|
10.5
|
(9.3)
|
(16.0)
|
(2.1)
|
(16.9)
|
Share buyback liability
|
-
|
-
|
-
|
(1.5)
|
(1.5)
|
Transfer of completed share
buyback
|
-
|
-
|
-
|
2.1
|
2.1
|
Employee Benefit Trust purchase of
shares
|
-
|
(13.3)
|
-
|
-
|
(13.3)
|
Transfer of vested awards from
share-based payment reserve
|
(17.4)
|
-
|
-
|
-
|
(17.4)
|
Equity-settled employee share-based
payments
|
16.7
|
-
|
-
|
-
|
16.7
|
Exercise of employee share
awards
|
(18.1)
|
18.1
|
-
|
-
|
-
|
Change in value of financial assets
held at fair value through other comprehensive income
|
-
|
-
|
6.9
|
-
|
6.9
|
Share-based payments converted to
cash-settled liabilities
|
(0.6)
|
-
|
-
|
-
|
(0.6)
|
Fair value loss reclassified to
Consolidated Income Statement on disposal
|
-
|
-
|
1.1
|
-
|
1.1
|
At
31 May 2024
|
(8.9)
|
(4.5)
|
(8.0)
|
(1.5)
|
(22.9)
|
The share-based payments reserve
relates to the estimated cost of equity-settled employee share
plans based on a straight-line basis over the vesting period. The
FVOCI reserve includes unrealised gains or losses in respect of
financial investments, net of tax.
The share buyback reserve relates to
the amount due by the Group to the intermediary bank for the
repurchase of the Group's own shares.
14. Other
reserves (continued)
Own shares held in Employee Benefit Trusts
The movements in own shares held in
Employee Benefit Trusts in respect of employee share plans during
the year were as follows:
|
Year ended
31 May 2024
|
Year
ended
31 May
2023
|
|
Number
|
Number
|
At the beginning of the
year
|
1,332,921
|
659,929
|
Subscribed for and purchased during
the year
|
1,845,229
|
2,112,631
|
Exercise and sale of
own shares held in trust
|
(2,549,838)
|
(1,439,639)
|
At
the end of the year
|
628,312
|
1,332,921
|
The Group has a UK-resident Employee
Benefit Trust which holds shares in the Company to satisfy awards
under the Group's HMRC-approved Share incentive Plan. At 31 May
2024, 160,832 ordinary shares (31 May 2023: 147,895) were held in
the Trust. The market value of the shares at 31 May 2024 was £1.3
million (31 May 2023: £1.0 million).
The Group has a Jersey-resident
Employee Benefit Trust which holds shares in the Company to satisfy
awards under the Long-term Incentive Plan and Sustained Performance
Plan. At 31 May 2024 the Trust held 455,751 ordinary shares (31 May
2023: 1,171,960). The market value of the shares at 31 May 2024 was
£3.7 million (31 May 2023: £7.9 million).
The Group has an Australian-resident
Employee Equity Plan Trust which holds shares in the Company to
satisfy awards under a SIP. At 31 May 2024, 11,729 ordinary shares
(31 May 2023: 13,066) were held in the Trust. The market value of
the shares at 31 May 2024 was £0.1 million (31 May 2023: £0.1
million).
15. Subsequent events
During the period from 1 June 2024 to
22 July 2024, the Group repurchased 2,939,818 ordinary shares with
a nominal value of 0.005p for an aggregate purchase amount of £25.2
million (including related costs of £0.8 million). The total number
of shares repurchased under the share buyback programme since 1
June 2023 up until 22 July 2024 amounted to 38,667,511.
On 11 July 2024, the Group obtained a
favourable ruling in respect to a Group of claims. For further
details refer to note 12.
There have been no other subsequent
events that have a material impact on the Group's financial
information.