UK online trading leader IG Group Holdings plc (LON:IGG) announced its results for the six months ended 30 November 2019 (H1 FY20). Back in December, the broker noted that the net trading revenue in H1 FY20 was expected to be around £250 million, as the prior year period benefited from two months of trading prior to the ESMA product intervention measures coming into effect. IG expects to return to revenue growth in FY20 and total operating expenses to be around £30 million higher than FY19.
Highlights include:
- Net trading revenue £249.9 million (H1 FY19: £251.0 million).
- Total operating expenses £136.3 million, reflecting investment in the Group’s strategic initiatives, in line with guidance (H1 FY19: £122.1 million).
- Operating profit £100.1 million (H1 FY19: £112.5 million).
- Basic EPS 22.4 pence (H1 FY19: 24.9 pence).
Meanwhile Paul Mainwaring has informed the Board that he intends to retire and step down from executive roles. He will continue to work as CFO and Executive Director whilst the company conducts a full search for his successor.
The Group reiterates its mediumterm financial targets of:
- Revenue growth in its Core Markets at around 3-5% per annum over the medium term; and
- An increase in revenue from its Significant Opportunities markets of £100 million, to around £160 million in FY22.
Core Markets performing in line with plan in a more restrictive regulatory environment.
- Continued growth in the client base:
- ESMA region OTC leveraged active client numbers up 4%;
- Other Core Markets OTC leveraged active client numbers up 5%.
- Actions are progressing as planned to enable successful navigation of the impact of regulatory change in Australia and across the Group’s Core Markets.
The Group’s portfolio of Significant Opportunities delivered revenue of £40.4 million in H1 FY20, £12.2 million higher than H1 FY19:
- Japan delivered revenue growth of over 80%;
- Active client numbers in the Emerging Markets grew close to 40%;
- Revenue growth of 18% in the Institutional business;
- IG US OTC FX business delivering steady growth;
- Marketing launch of the Group’s Multi-lateral Trading Facility (MTF), Spectrum, in October.
June Felix, IG Group
June Felix, Chief Executive, commented:
At IG, we have one clear vision – to provide the world’s best trading experience. In working to that vision, we lead our industry by focusing on our clients and making them central to everything we do. This client-centric approach is borne out in the behaviours of our people who all share three common values: to champion the client, lead the way and love what we do.
We are now six months into the delivery of our multi-year strategy and are on track to deliver on the mediumterm growth targets we have set ourselves. Early indications are very encouraging with continued growth in the client base in our Core Markets, and convincing progress in the areas identified as Significant Opportunities. I am very much looking forward to continuing the delivery of our strategy, and also to welcoming Mike McTighe as Chairman of IG Group in February.
I believe that IG is in an excellent position to exploit our scale, skills and technological capability, to pivot into new product lines, to expand our geographic reach and to serve new client segments, as we continue to focus on delivering sustainable growth and attractive shareholder returns.