IG Group reports fall in profits in half yearly

IG Group on Tuesday reported a 21 per cent fall in profits as the company unveiled 'satisfactory' interim results for the last half of 2012.

The FTSE 250 firm trading in financial derivatives said profit before tax was at£81.1m for the six months to the end of November, down from £103.1m in the previous year.

Net trading revenue dropped 14% to £169.0m, compared to £195.4m for the same period in 2011.

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Chief Executive Officer, Tim Howkins, said tough market conditions drove results down.

He said global economic uncertainty, fragile consumer sentiment and the ongoing market intervention by the Bank of England, the Federal Reserve and the European Central Bank had dampened market reaction to newsflow.

"All of these factors impact on the behaviour of our existing and potential clients and in the period we saw reductions in the overall number of clients actively trading, the revenue we generated per client and the number of new clients signing up," he said.

The strongest growth came from the company's new offices in Sweden and the Netherlands. Established offices in Spain and Germany delivered strong performance in active client numbers while Italy and France were weaker.

"Market conditions so far this year have been challenging for the industry," Howkins said.

"Against the backdrop of low market volatility and fragile consumer sentiment we have delivered a satisfactory set of results.

"We continue to maintain an appropriate level of investment in IT and marketing, mindful of the need to balance short term profitability against investment for the long term.

"This, along with our strong financial position, supports the increasing market lead we have in a number of the countries in which we operate and we believe will help deliver industry-leading growth rates over the longer term."

Howkins said he remained confident for the future of the business despite the fragile economic outlook.

Shares fell 2.37% to 456.70p at 8:23 Tuesday following the announcement.

RD