IG revenues slow as clients calm down over euro debt - UPDATE

IG Group, the spread betting firm, has seen revenue growth slow in its second quarter as the appeal to clients of increased volatility in the Eurozone appears to have diminished slightly.

Total revenues for the six months to the end of November are expected to be £195.6m, up over 25% on the equivalent period of 2010 (£156.7m). Stripping out the now closed sports betting business like-for-like revenues for the half-year climbed 28%. Meanwhile, there has been a 15% increase in active clients and an 11% rise in revenue per client in the last six months.

Revenues in the second quarter were up 24% on the previous year at £96m but down from the exceptional first three months of this year when total revenues rose 26% to £99.8m.

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In today's statement IG makes clear that "Trading conditions during Q2 were less exceptional than those in August, which was a record revenue month for the group."

Nevertheless, Evolution Securities was happy with the statement, saying that the company - which it sees as a "key holding" - is going from strength to strength. According to analyst James Hollins, "IG is: (1) making the right investments; (2) benefiting from helpful market conditions; (3) driving market share gains; and (4) delivering strong revenue upside."

Growth came from IG's well established businesses in the UK which was up 24% on the second quarter of last year and Australia, which was ahead by 36%.

The Europe division was also strong in the second quarter, with revenues up 33%. IG's Japanese business has faced restrictions on the amount of leverage it can offer clients and so has seen revenues fall sharply to £8.4m, a drop of 15% on the prior year.

IG says its exposure to the collapse of MF Global amounts to no more than £0.3m and the firm says it is likely to benefit from the collapse of its rival because MF was a significant player in the Australian CFD market.

Shares in IG were up 0.52% at 11:21 at 464p. On the year to date the stock is down 9.17%.

BS