IG welcomes 'conducive' market conditions as revenue jumps

Interdealer broker IG Group enters the fourth quarter in a cautiously optimistic mood after a better-than-expected performance since the first half, helped by volatile financial markets over the past few months.

Interdealer broker IG Group enters the fourth quarter in a cautiously optimistic mood after a better-than-expected performance since the first half, helped by volatile financial markets over the past few months.

Revenue in the third quarter (three months ended February 28th) was up 18% year-on-year to £88.6m, reflecting increased activity across the business and a weak quarter the year before.

IG reported that while active clients numbers rose 3.0%, revenue per client - one of its key performance indicators - jumped by 14% as "client sentiment improved in more conducive market conditions".

Shares surged in morning trade on Tuesday, up 8.52% at 566.5p early on.

The firm said that revenues were ahead year-on-year across all regions, with strong performances seen in the faster growing regions of Europe and Rest of World.

IG's statement read: "Financial markets provided a range of opportunities for clients across all asset classes, with stronger equity markets coinciding with increased news flow, particularly around the fiscal cliff negotiations in the US and the credit rating downgrade in the UK, which drove some greater intra-day volatility in the major indices."

While the betting duty charge was in line with a busier quarter, IG said that operating costs were "held in check" in spite of the stronger revenue environment.

IG had previously said that revenue in the second half would be in line with the first half top line of £169m.

"However third-quarter revenue was clearly stronger than this guidance implied," the firm said.

"As the company enters the final quarter of the year the recent increase in client activity levels is encouraging, but IG remains mindful of the strength of the final quarter of the last year and the fact that a degree of uncertainty exists around consumer sentiment more broadly."

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