IG Group Holdings plc First Quarter Revenue Update (3256B)

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RNS Number : 3256B

IG Group Holdings plc

20 September 2018

20 September 2018

LEI No: 2138003A5Q1M7ANOUD76

IG GROUP HOLDINGS PLC

First Quarter Revenue Update

IG Group Holdings plc ("IG", "the Group", "the Company"), a global leader in online trading, today issues an update on its revenue for the three months to 31 August 2018, the first quarter of its FY19 financial year. The trends and figures highlighted below refer to this period and the corresponding period last year.

Revenue was GBP128.9m in the first quarter of FY19, 5% lower than in the same period in the prior year, which was a record quarter. The heightened level of volatility in financial markets and client activity experienced in FY18 have not continued into FY19.

The table below sets out revenue and key performance indicators by reporting segment. This period reflects the ESMA prohibition on offering binary options to retail clients from 2 July and the measures relating to the provision of CFDs to retail clients from 1 August:

 
 Reporting Segment(1)                                 % Change                          % Change       Change 
                                                                                                     in Revenue 
                                 Revenue(1) (GBPm)                Clients(1) ('000s)                per client(2) 
-----------------------------                        ---------                         ---------  --------------- 
                                Q1 FY19    Q1 FY18                Q1 FY19    Q1 FY18 
-----------------------------  ---------  ---------  ---------  ----------  ---------  ---------  --------------- 
 UK                               53.9       58.8       (8%)       34.0        39.2      (13%)           6% 
 EMEA                             34.4       39.0      (12%)       27.2        30.2      (10%)          (2%) 
 APAC                             35.5       33.1        7%        26.3        25.2        5%            3% 
 Leveraged OTC                   123.8      130.9       (5%)       87.5        94.6       (7%)           2% 
                               ---------  ---------             ----------  --------- 
 US                               3.9        3.4        14%         9.1        10.3      (12%)          29% 
 Share Dealing & Investments      1.2        0.9        37%        37.2        24.2       54%          (11%) 
 Multi product clients             -          -          -         (4.9)      (4.1)       18%            - 
                                                                                                  --------------- 
 Group                           128.9      135.2       (5%)       129.0      124.9        3%            nm 
                               ---------  ---------             ----------  ---------             --------------- 
 

In November 2017 IG launched an online process to enable its sophisticated clients who meet the required criteria to apply to become categorised as an elected professional client. The proportion of UK and EU revenue generated by clients who at the end of the period were categorised as professional was over 50% in Q1 FY19, in line with the Company's previously stated expectation.

The volume of trading by clients categorised as retail clients in the UK and EU was, as expected, significantly lower in August than in July following the implementation of the ESMA measures. It is not possible to draw firm conclusions from a one month period as it will take time for retail clients to adapt to the new rules and change their trading behaviour. The Group's performance in the month of August has not changed the Company's previously stated view that the impact of the ESMA measures on historic revenue would have been a reduction of approximately 10%.

The Group has continued to make progress with its strategic initiatives. The Group's German subsidiary has received a licence in principle, subject to standard conditions, from BaFin to offer financial services to EU clients. This provides certainty that IG will continue to be able to offer its regulated financial products in all EU member states following the UK's planned exit.

There will be a conference call for analysts and investors at 8.00am (UK time) today. The call can be accessed by dialling [phone]. The audio recording of the conference call will be archived for access at www.iggroup.com/investors, along with a full transcript.

The next planned performance announcement from IG is a short pre-close trading update, currently scheduled for 4 December 2018.

For further information, please contact:

IG Group FTI Consulting

Liz Scorer Neil Doyle / Ed Berry

020 7573 0727 020 3727 1141 / 1046

[e-mail]

About IG

IG empowers informed, decisive, adventurous people to access opportunities in over 15,000 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 to be a global leader in retail trading and investments. 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 share dealing service in the UK, Australia, Germany, France, Ireland, Austria and the Netherlands. IG has recently launched a range of affordable, fully managed investment portfolios, to 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 published financial statements, February 2018)

(1) The means by which we account for these figures is consistent with our previous statements. Please refer to our FY18 Annual Report for these definitions.

(2) nm (not meaningful) - has been used as the Group believes that the most meaningful measure of revenue per client is by business line and so will no longer be reporting change in revenue per client for the Group.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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September 20, 2018 02:00 ET (06:00 GMT)