IG Group expects full year growth of 17 per cent

published 14 June 2012

Spread-betting firm IG Group has said it expects to report growth of more than 17 per cent in the full year ended May 31st.

Excluding its discontinued sports business, trading revenue rose from £312.7m to £366.8m, while the profit before tax margin is expected to be 50%.

Year-on-year (y/y) active client growth rose 7.0% and revenue per client grew 9.0%. Regionally, active client growth was up the least in the UK at 5.0%, and up the most in Europe at 32%. A fall of 19% was seen in Japan.

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Revenue per client declined in both Europe and Japan, at 5.0% and 2.0%, respectively, while the highest growth was seen in the UK at 10%.

Full year revenues saw the biggest percentage rise in Rest of World (outside of UK, Australia and Europe) at 43%, while a decline of 20% was seen in Japan. The UK rose 15%, Australia 22% and Europe 26%.

In the final quarter of the year the group achieved revenue growth of 12% from £85.7m to £96.2m, a marked increase in the growth of 1.5% in the third quarter, with particularly strong client activity in the final month of the year.

The UK had a strong quarter with revenue growth of 13%, primarily driven by growth in revenue per client which was the highest of any quarter during the year, resulting in revenue per client growth of 10% for the full year.

Very muted consumer sentiment in the final quarter in Australia led to reduced client activity and a fall of 1% in both revenue per client and active client numbers.

The group's European businesses continued to deliver strong growth in active client numbers which, as expected, was slightly offset by the progressive fall in revenue per client as these businesses become more established and the impact of high value early adopters is diluted. The growth was primarily driven by Spain, Italy and France.

The continued positive performance from the 'Rest of World' segment was driven by strong growth in both Singapore and South Africa. Growth in Singapore was driven primarily by increased revenue per client while growth in South Africa was driven by higher active client numbers.

The group's Japanese business continues to make progress with sequential improvement in revenue per client in each of the last three quarters. Active client numbers have stabilised in the last two quarters, but are lower than those achieved prior to the introduction of final leverage restrictions in August 2011.

In a statement the firm said: "The group continues to focus on its clients and the on-going development of the group's offering. Although the very strong first half in FY12 makes for challenging near term comparatives, IG remains well positioned for further growth in the coming year."

The share price fell 1.29% to 460p by 08:42.