Spread-betting specialist IG Group has reported a 15% increase in revenue for its first quarter. This was driven by increased trading activity, as customers tried to take advantage the market turmoil that occurred in August.
The FTSE 250 firm posted revenues of £278.9 millions in the three-month period ending August 31. This is up from £242.9million in the same time last year. The London-listed company said that the increased revenue per client is due to “elevated volatility across a variety of asset classes” in early August.
In a trading update published on Thursday, the company said that its net interest income had increased to £36.8million in the three-month period ending August. This is an increase of £34.4million a year ago.
The IG Group has made a complete turnaround since November of last year when it announced that 10 percent of its employees would be laid off in a drive to cut costs aimed to save £50 million a yearly.
Last month, widespread sell-offs across Asia, Europe and the United States shook financial markets around the world. The FTSE 100 fell 4.36 percent in London over three days.
Spread-bet sellers often benefit from uncertainty in the financial markets because traders are more likely when conditions are volatile to trade, and large swings in asset values increase the possibility of quick profits.
In the group’s net income interest, £13.7 million was attributed to the over-the-counter division. This is an increase of £11.8 millions from the same period in the previous year. The exchange-trading division’s net interest income rose to £18.4million, while the stocks and trading unit generated £4.7million.
IG Group, now worth around £3,47 billion, was a spread betting pioneer when it was established in 1974
Tastytrade – the group’s option trading arm acquired in January 2020 – reported an increase of 17 per cent in its total revenues, which reached £55 million. The group also reported a 1 percent decline in the number of active clients over the period, which was 263,200.
The FTSE250 company offers spread bets, contracts for differences, and other derivatives. These allow amateurs and professionals to make high-risk, leveraged bets on asset prices. In 1974, Stuart Wheeler founded the company, who was a gambler, lawyer and banker. He died in 2020. IG Group has a current market value of approximately £3.47 billion.
Spread-betting specialist expects to perform in line with the market’s expectations in 2025.
Stuart Duncan, an analysts at Peel Hunt said the company reported a positive financial year start with “resilient metrics”.
IG Group has benefited over the past year from the rising interest rates because it only pays to a few institutional clients. This allows it to reap rewards for the higher rates earned by most of its customer’s cash.
The group’s shares, which are up over 25% this year, increased by 1p or 0.1 percent to 961p.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.