Ig Share Discussion Threads

[mitreatrading] 13/12/2016 08:55

CMCX up 2.1%
Igg creating support at 450 ?

[deanroberthunt] 13/12/2016 08:54

diggedy

I have new broker consensus forecasts for 2018.....

Pre Tax £171m
EPS 36p
PE 12.2
Yield 7.5%

that pre-tax accounts for the brutal drop in revenue.

[diggedy2] 13/12/2016 08:48

Lots of people trying to bolster their hopes here but the simple fact is that any maintenance of historic revenues on multiples of 25 times (for new accounts) and 50 times for everyone else will be murderously difficult to achieve.

IG will have to cost cut to the bone which will be tough as staff numbers are not really dependent on trade volumes (hardly anyone calls to trade these days) and anyway trade 'volumes' will probably not decline a great deal. The thing that will fall is the trade 'size'. This is likely to drop by up to a factor of 8 (for new accounts) and 4 for old accounts ... but will more probably fall by about a half overall.

Accounts will also have less spare funds for those 'tempting trades' which make the Spread Betting companies so much dosh.

If trade sizes drop by a half then this will severely impact revenue which was always a multiple of size times spread.

Not only this but the 'cigarette health warning' that the providers will have to put on account opening forms will put off a lot of potential new clients. And the cost of client acquisition will go up (it is already reputed to be around £900 a client)

All in all the overall drop in revenue may well be higher than the broker touted 37%.

Given that IG works on a 50% margin (approximately) a 37% drop in earnings would leave them on a profit of just 26% of pre FCA levels. Of course IG will make adjustments which will negate some of this but make no bones . The fall of 50% in the share price is NOT oerdone.

[dusseldorf] 12/12/2016 15:51

a 50% price decline or market cap reduction of £1.6bn in 4 months (from 1st Sept high) is somewhat brutal.

IG makes money when markets are volatile, Trump has stabilised things somewhat (suprisingly!) though IMO next year the party for markets will be over (Superunicorns etc..), but the party at IG will just be beginning.

[deanroberthunt] 12/12/2016 15:30

just had a bear market in 1 week.

[deanroberthunt] 12/12/2016 15:28

been here before, be back over 8 quid this time next year

[langy_1] 12/12/2016 15:25

What we really need is for Peter H and team to do a similar impact assessment and let the markets know.

On a positive note, the 24th Jan will see a release of the first half 2016 results which i would expect to be in-line or exceeding expectations and complete with a narrative on the proposed strategy for dealing with any potential regulatory changes.

[woodhawk] 12/12/2016 15:19

"I'm told the impact on the Japanese market in aggregate from the regulatory change was actually closer to 10%, followed by a recovery over the next few years"

Complete over-reaction here so far then. Glad I've loaded up. Collect some nice divis as this recovers.

[langy_1] 12/12/2016 14:46

Reading that certainly does highlight how overdone this drop has been.

[deanroberthunt] 12/12/2016 14:39

thanks Jambo.

[deanroberthunt] 12/12/2016 13:53

an intraday reversal today would be bullish.....

[deanroberthunt] 12/12/2016 13:51

ID

Get ready for the Santa Rally on IGG.....it's imminent

[investment dave] 12/12/2016 13:42

the price is firming nicely expect a blue close

[wigancasino] 12/12/2016 13:37

Doesn't matter if it's turning or not or if it's a solid company with a good balance sheet. If those mm's want it down it will go down despite what anyone says or hopes for. I am out for now at £4.89 with thankfully, a very small profit and watching for the turnaround. Hope not to many got caught as it bounced up and then dropped even lower, we have all been there at some time or another.

Mm's very rarely lose, they thrive on the PI.

[deanroberthunt] 12/12/2016 11:00

is the worm turning......

[mnomis] 12/12/2016 09:59

Fear does not scare me (as a recent long), shorts on the other hand ...?

[woodhawk] 12/12/2016 09:56

Fear and shorts.

[mnomis] 12/12/2016 09:55

So, who is selling then and why? i.e. why is the share price still falling?

[woodhawk] 12/12/2016 09:52

"also any changes, if they are coming, will be April at the earliest" - I think that's more like a year away!

[deanroberthunt] 12/12/2016 09:51

couldn't ask for a better balance sheet, no debt £0.5bn in cash, generating £200m+ fcf per annum.

[brwo349] 12/12/2016 09:48

also any changes, if they are coming, will be April at the earliest. In the meantime the cash keeps rolling in.

[brwo349] 12/12/2016 09:47

Not much if any downside here - not with that balance sheet.

Time for a major loola bounce.