IG Group Holdings plc Third Quarter Revenue Update (5172I)

TIDMIGG

RNS Number : 5172I

IG Group Holdings plc

22 March 2018

22 March 2018

LEI No: 2138003A5Q1M7ANOUD76

IG GROUP HOLDINGS PLC

Third Quarter Revenue Update

IG Group ("IG", "the Company"), a global leader in online trading, today issues the following Revenue Update for the three months to 28 February 2018, the third quarter of its FY18 financial year. The trends and figures highlighted below refer to this period and the corresponding period last year.

IG has delivered a record revenue quarter. Net trading revenue of GBP152.9m was 30% higher than in the same period in the prior year, and was 13% higher than the Company's previous record revenue quarter of GBP135.2m in Q1 FY18.

Revenue and other key performance indicators by reporting segment are as follows:

 
 Reporting Segment(1)                                  % Change                          % Change     Change 
                                                                                                     in Revenue 
                                  Revenue (GBPm)(2)                Clients ('000s)(3)                per client 
------------------------------                        ---------                         ---------  ------------ 
                                 Q3 FY18    Q3 FY17                Q3 FY18    Q3 FY17 
------------------------------  ---------  ---------  ---------  ----------  ---------  ---------  ------------ 
 UK                                69.2       51.1       35%        40.8        39.6        3%          31% 
 EMEA                              41.9       33.5       25%        31.3        30.8        2%          23% 
 APAC                              36.4       28.2       29%        27.3        25.0        9%          18% 
 OTC Leveraged                    147.5      112.8       31%        99.5        95.4        4%          25% 
------------------------------  ---------  ---------  ---------  ----------  ---------  --------- 
 US                                4.3        3.9         9%        10.5        10.3        1%          8% 
 Share Dealing & Investments       1.1        0.6        77%        33.7        16.4       105%        (14%) 
 Multi product clients                                              (5.2)      (3.3)       58% 
------------------------------  ---------  ---------  ---------  ----------  ---------  ---------  ------------ 
 Group                            152.9      117.4       30%        138.5      118.9       16%          12% 
------------------------------  ---------  ---------  ---------  ----------  ---------  ---------  ------------ 
 
   Revenue in Q3 benefited from a high level of client trading activity, 
   and from an increase in the number of active clients. OTC leveraged 
   revenue per client of GBP1,482 in the quarter was 25% higher than 
   in the prior year. The number of unique OTC leveraged clients active 
   in the period of 99,500 was 4% higher than in the prior year, including 
   12,500 new OTC leveraged clients who traded for the first time in 
   the period. Client trading in cryptocurrencies accounted for 11% of 
   revenue in the period (Q3 FY17: 1%), however, cryptocurrency trading 
   by clients has slowed markedly since the end of January. 
   Year to date net trading revenue of GBP421.3m is 16% higher than in 
   the same period in the prior year. Client trading in cryptocurrencies 
   accounted for 7% of year to date revenue (Q3 FY17 YTD: 0.5%). 
   Revenue and other key performance indicators by reporting segment 
   for the year to date are as follows: 
    Reporting                            % Change                        % Change   Change 
    Segment(1)                                                                        in 
                                                                                    Revenue 
                                                                                      per 
                    Revenue (GBPm)(2)               Clients ('000s)(3)              client 
   -------------                        ---------                       ---------  -------- 
                    Q3 YTD     Q3 YTD               Q3 YTD     Q3 YTD 
                     FY18       FY17                  FY18      FY17 
   -------------  ---------  ---------  ---------  --------  ---------  ---------  -------- 
    UK              185.8      166.1       12%       55.4       59.2       (6%)       20% 
    EMEA            118.6      100.6       18%       42.1       41.3        2%        16% 
    APAC            102.4       83.7       22%       35.3       33.9        4%        17% 
    OTC 
     Leveraged      406.8      350.5       16%       132.7     134.4       (1%)       17% 
   -------------  ---------  ---------  ---------  --------  ---------  --------- 
    US               11.6       10.2       14%       18.8       17.9        5%        8% 
    Share 
     Dealing & 
     Investments     2.9        1.6        82%       33.7       16.4       105%      (11%) 
    Multi 
     product 
     clients                                         (6.3)     (4.1)       53% 
                                                                                   -------- 
    Group           421.3      362.3       16%       178.9     164.5        9%        7% 
   -------------  ---------  ---------  ---------  --------  ---------  ---------  -------- 
 

Revenue growth has been strong across all regions and products. The 16% growth in OTC leveraged revenue compared with prior year reflects higher revenue per client, driven by an increase in client trading activity, combined with higher hedging efficiency.

The business has delivered a strong performance in each of the first three quarters of the financial year. It remains difficult, however, to predict the level of revenue in the last quarter of the year, which depends on the level of trading opportunities available to our clients and on the Company's hedging efficiency.

Following its call for evidence in the early part of the year, it is expected that ESMA will soon publish measures to restrict the marketing, distribution or sale to retail clients of CFDs. IG continues to believe that any financial impact from the implementation of such measures is unlikely to be significant in FY18. It remains difficult to predict what impact regulatory change may have on the business in subsequent financial years. The Company has made good progress with the actions being taken to mitigate the potential financial impact of regulatory change, and to position the business so that it will continue to deliver for all its stakeholders under a more restrictive regulatory environment.

Today there will be a conference call for analysts and investors at 8.30am (UK time). The call can be accessed by dialling [phone] and entering access code 881169 when requested. The audio recording of the conference call will be archived for access at www.iggroup.com/investors, along with a full transcript.

The Group is holding a Capital Markets Day on the morning of the 23(rd) May 2018, any attendance requests should be sent to [e-mail]. The next planned performance announcement from IG is a pre-close trading update, currently scheduled for 7(th) June 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]

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

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 now 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 financial tables contain numbers which have been rounded whilst all year-on-year percentages are calculated off underlying unrounded numbers (2) References in this statement to "revenue" refer to net trading revenue, which is trading revenue excluding interest on segregated client funds and is net of introducing broker commissions.

(3) References in this statement to active clients are to the number of clients trading during the period referred to and references to average revenue per client are to revenue for the period referred to divided by the number of active clients in that period.

This information is provided by RNS

The company news service from the London Stock Exchange

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March 22, 2018 03:00 ET (07:00 GMT)