Last checked at 19 Sep 2019 07:00
19 September 2019
LEI No: 2138003A5Q1M7ANOUD76
IG GROUP HOLDINGS PLCFirst Quarter Revenue Update
IG Group Holdings plc ("IG", "the Group", "the Company"), a global leader in online trading, today issues its scheduled update on its revenue for the three months to 31 August 2019 ("Q1 FY20"), the first quarter of its financial year ending 31 May 2020 ("FY20").
Business performance
The business has performed well in the first quarter benefitting from growth in the number of active clients, and from increased client trading activity as a result of the favourable market conditions in August.
Revenue in Q1 FY20 was £129.1m, in line with the prior year. The ESMA product intervention measures relating to the provision of CFDs impacted just one month of trading in Q1 FY19.
Revenue by product (£m) | Q1 FY20 | Q1 FY19 | % Change |
OTC leveraged | 124.0 | 123.8 | 0% |
Exchange traded derivatives - Nadex | 3.8 | 3.9 | (2%) |
Stock trading and investments | 1.3 | 1.2 | 9% |
Group | 129.1 | 128.9 | 0% |
The Group's revenue in Q1 FY20 of £129.1m was 11% higher in comparison with the average of the quarterly periods in the prior year when the ESMA measures were in effect throughout, demonstrating the Company's ability to deliver revenue growth in a more restrictive regulatory environment.
Revenue by product (£m) | Q1 FY20 | Average Q2-Q4 FY19 | % Change |
OTC leveraged | 124.0 | 110.1 | 13% |
Exchange traded derivatives - Nadex | 3.8 | 4.3 | (12%) |
Stock trading and investments | 1.3 | 1.6 | (19%) |
Group | 129.1 | 116.0 | 11% |
Medium term financial targets
As part of its Strategy and Business Update on 22 May 2019 the Group set out its targets for revenue growth from the successful implementation of its strategic plan, of 3-5% per annum growth over the medium term in its core markets, and an increase of £100m in revenue from the significant opportunities to around £160m in FY22.
In Q1 FY20 revenue in the Group's core markets (OTC leveraged derivatives and stock trading and investments) was £109.2m, compared with the average of £100.5m per quarter in Q2-Q4 FY19, a growth rate of 9%. The driver for sustainable revenue growth in OTC leveraged derivatives over the medium and long term is growth in the size and quality of the client base, and the number of OTC leveraged active clients in the core markets in Q1 FY20 was 5% higher than in the average of Q2-Q4 FY19.
Q1 FY20 revenue from the Group's significant opportunities (OTC leveraged derivatives and exchange traded derivatives) was £19.9m, an increase of £7.4m compared with Q1 FY19.
The tables setting out more detail on revenue, active client numbers and revenue per client are shown in the Appendix to this document.
Regulation
On 22 August 2019 the Australian Securities and Investments Commission (ASIC) issued a consultation paper on potential product intervention measures relating to the provision of CFDs and binary options. The Group has previously set out that it expected that product intervention measures would be introduced in Australia.
The consultation paper does not change the Group's previously stated target of revenue growth in the core markets of 3-5% per annum over the medium term. The Group's guidance that it expects to return to revenue growth in FY20 also remains unchanged.
Analyst and investor call
There will be a conference call for analysts and investors at 8.00am (UK time) today. The call can be accessed by visiting https://pres.iggroup.com/ig049/vip_connect. The audio recording of the conference call will be archived for access at www.iggroup.com/investors.
For further information, please contact:
IG Group Investors IG Group Press FTI Consulting
Liz Scorer Ramon Kaur Neil Doyle / Ed Berry
020 7573 0727 020 7573 0060 020 3727 1141 / 1046
investors@ig.com press@ig.com
Disclaimer - Forward-looking statements
This statement, prepared by IG Group Holdings plc (the "Company"), may contain forward-looking statements about IG Group Holdings plc and its subsidiaries (the "Group"). Forward-looking statements involve uncertainties because they relate to events, and depend on circumstances, that will, or may, occur in the future. If the assumptions on which the Group bases its forward-looking statements change, actual results may differ from those expressed in such statements. Forward-looking statements speak only as of the date they are made, and 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 empowers informed, decisive, adventurous people to access opportunities in over 16,000 financial markets. With a strong focus on innovation and technology, the company puts client needs at the heart of everything it does.
IG's vision is provide the world's best trading experience. Established in 1974 as the world's first financial derivatives firm, it continued leading the way by launching the world's first online and iPhone trading services.
IG is an award-winning, multi-platform trading company, the world's No.1 provider of CFDs* and a global leader in forex. It provides leveraged services with the option of limited-risk guarantees and offers an execution-only stock trading service in the UK, Australia, Germany, France, Ireland, Austria and the Netherlands. IG has a range of affordable, fully managed investment portfolios, which provide a comprehensive offering to investors and active traders.
It is a member of the FTSE 250, with offices across Europe, including a Swiss bank, Africa, Asia-Pacific, the Middle East and the US, where it offers on-exchange limited risk derivatives via the Nadex brand.
*Based on revenue excluding FX (from half yearly published financial statements, June 2019)
Appendix
Group client metrics (split by product) with Q1 FY19 as comparator
Revenue by product (£m) | Q1 FY20 | Q1 FY19 | % Change |
OTC leveraged | 124.0 | 123.8 | 0% |
Exchange traded derivatives - Nadex | 3.8 | 3.9 | (2%) |
Stock trading and investments | 1.3 | 1.2 | 9% |
Group | 129.1 | 128.9 | 0% |
Active Clients ('000s) | Q1 FY20 | Q1 FY19 | % Change |
OTC leveraged | 92.3 | 87.5 | 5% |
Exchange traded derivatives - Nadex | 8.3 | 9.1 | (9%) |
Stock trading and investments | 38.3 | 37.2 | 3% |
Multi-product clients | (4.8) | (4.9) | (2%) |
Group | 134.1 | 129.0 | 4% |
Revenue per client (£) | Q1 FY20 | Q1 FY19 | % Change |
OTC leveraged | 1,344 | 1,414 | (5%) |
Exchange traded derivatives - Nadex | 463 | 429 | 8% |
Stock trading and investments | 33 | 31 | 6% |
Group OTC leveraged client metrics (split by core markets and significant opportunities) with Q1 FY19 and an average of Q2-Q4 FY19 as comparators
OTC Leveraged Revenue (£m) | Q1 FY20 | Q1 FY19 | % Change |
| Average Q2-Q4 FY19 | % Change |
ESMA region | 65.1 | 78.0 | (17%) |
| 61.2 | 6% |
Other core markets | 42.8 | 37.2 | 15% |
| 37.7 | 14% |
Core markets | 107.9 | 115.2 | (6%) |
| 98.9 | 9% |
Significant opportunities | 16.1 | 8.6 | 88% |
| 11.2 | 43% |
Total OTC Leveraged | 124.0 | 123.8 | 0% |
| 110.1 | 13% |
Active clients ('000s) | Q1 FY20 | Q1 FY19 | % Change |
| Average Q2-Q4 FY19 | % Change |
ESMA region | 53.6 | 56.7 | (6%) |
| 51.5 | 4% |
Other core markets | 25.3 | 23.5 | 8% |
| 23.9 | 6% |
Core markets | 78.9 | 80.2 | (2%) |
| 75.4 | 5% |
Significant opportunities | 13.4 | 7.3 | 84% |
| 9.1 | 47% |
Total OTC Leveraged | 92.3 | 87.5 | 5% |
| 84.5 | 9% |
Revenue per client (£) | Q1 FY20 | Q1 FY19 | % Change |
| Average Q2-Q4 FY19 | % Change |
ESMA region | 1,214 | 1,375 | (12%) |
| 1,188 | 2% |
Other core markets | 1,691 | 1,584 | 7% |
| 1,578 | 7% |
Core markets | 1,367 | 1,436 | (5%) |
| 1,312 | 4% |
Significant opportunities | 1,197 | 1,172 | 2% |
| 1,233 | (3%) |
Total OTC Leveraged | 1,344 | 1,414 | (5%) |
| 1,303 | 3% |