IG Group’s Q3 FY 2017 revenue falls on back of poor performance in UK, Ireland

IG Group’s Q3 FY 2017 revenue falls on back of poor performance in UK, Ireland

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Forex brokerage IG Group (LON:IGG) reported its consolidated revenue went down by an annual 3.8% to £117.4 million for the three months to 28 February, 2017, or the third quarter of the current financial year, according to a filing with the London Stock Exchange (LSE). The decline was the result of a double-digit drop in the business in the UK and Ireland, where revenue was down 15% on the year.

Despite the overall decline, the broker’s quarterly revenue was still strong. The broker performed better in the rest of the regions (outside UK and Ireland) , compared to the same period a year earlier.

“IG performed well in a quiet period in global financial markets,” the broker said. “More mature markets tend to outperform in more volatile periods as the large installed client base reactivates, as happened in the prior year, and underperform in quieter conditions,” it added, referring to the growth in all regions but the UK and Ireland.

In addition, the number of active clients it has grew by 13% on the year, while revenue per client went down by an annual 15%. The growth in clients was attributed to the ongoing success in online marketing.  Moreover, new first trades in the reporting period jumped 20% on the year.

Following are details about IG Group’s Q3 FY 2017 metrics by region (in £ millions):

IG Group Q3 FY 2017

Meanwhile, IG Group’s consolidated revenue in the first nine months of the fiscal year increased by 8% to £ 362.3 millions .Active clients also went up by 20% in June 2016-February 2017. As we’ve informed you, in H1 FY 2017, the broker reported record-high financial metrics, so it is not a surprise its Q1-Q3 are strong.

Below are more details about the broker’s Q1-Q3 FY 2017 performance (in £ millions):

IG Group Q3 FY 2017

IG Group also announced its stockbroking business continued to grow well in the period in both the UK and Australia. There were more than 16,000 clients holding a position on stocks at the end of February.

Regulatory changes have not yet affected the broker

The ongoing regulatory changes across the globe, but mainly in Europe, have not caused IG Group to face had any impact, as its client recruitment remains strong and the underlying business is performing well.

“Over the last few months, IG has responded to regulator consultations in the UK and Germany and worked closely with the regulator in Dubai. IG was pleased by the clarity provided in France, which means that the Limited Risk Account the Company offers there is entirely compliant with the new legislation,” IG Group noted. “IG is also now working on its responses to consultations in The Netherlands and Ireland.”

To extend its unleveraged offering, IG Group plans to launch in the next quarter a discretionary managed smart portfolio ETF service in the UK.

IG Group operates worldwide with offices in 15 countries. It offers access to more than 10,000 markets, including forex, indices, shares, exchange-traded funds (ETFs), and binary options. In the UK it also offers spread betting.

The broker is based in the UK and regulated by the Financial Conduct Authority (FCA), but its subsidiaries are also regulated by the relevant authorities in the countries where they operate. It is a licensed bookmaker by the UK’s Gambling Commission and now a managed portfolio provider in the UK.

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