IG experiences slowdown as volatility eases

Spread-betting firm IG Group experienced a significant slowdown in sales growth during the third quarter, after the previous market volatility that had helped sales in the first half was alleviated.

In the three months to February 29th, revenue increased by just 1.5% year-on-year to £75m. In the first six months of the fiscal year, net trading revenue surged 27.8% to £195.46m.

While part of the slowdown was a result of lower client activity levels and soft trading during the Christmas holiday period, which "started earlier and ended later than in previous years".

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Active client numbers increased by 4.6% during the third quarter, but revenue per client was down 3%.

"After a period of elevated and somewhat exceptional volatility during the first half of the financial year, particularly in August, volatility during the third quarter reduced significantly across all asset classes," IG said.

The UK business, which accounts for around half of group sales, saw revenue fall 1.4% during the period to £39.4m. Meanwhile, growth was seen in the smaller Australia, Europe and Rest of World divisions. Japan had the worst performance with revenues falling 11.8% to £4m.

CONFIDENT OUTLOOK

"The group continues to see progressive growth in active client numbers, which is the key driver of long-term revenue growth. This growth is in turn underpinned by the on-going significant investment the Group makes in its technology platforms and systems."

IG said that activity levels picked up in the final month of the quarter and assured that this trend has continued into March. The firm remains well-capitalised and is strongly positioned competitively, the statement said.

BC