London-listed IG Group (LON: IGG) published its financials for the fiscal year 2023, ending on 31 May, reporting an annual revenue increase of 5 percent to over £1.02 billion. The adjusted revenue for the year improved 6 percent.

Diversified Strategy of IG

However, the net trading revenue of the brokerage giant dropped 3 percent to £941.8 million from £972.3 million. The overall revenue showed an increase from interest income of £80.8 million, which is up from the previous year’s income of £0.8 million. This is mostly because of the higher interest rates.

“We’ve delivered a fourth consecutive year of record revenue as part of our strategy to expand and diversify the Group through great technology and innovative products, combined with outstanding client experiences,” said Charlie Rozes, IG’s Acting CEO, who took over the apex role in the absence of June Felix.

On top of that, its revenue from US operations improved significantly, with a total of £191.3 million, which is an increase of 47 percent. Tastytrade generated £170.3 million, which is 52 percent higher than the previous year. In Europe, the revenue of Spectrum Markets increased 52 percent to over £15.7 million.

The non-OTC revenue of the group now contributes to 21 percent of its total revenue. This is up from 16 percent seen in the previous year.

“We’ve performed well in the much more difficult market conditions that persisted through most of the past year, maintaining our leadership position in OTC derivatives while building further momentum in our product and geographic expansion,” added Rozes.

Profits

The brokerage ended the fiscal year with a pre-tax profit of £449.9 million, which is down from the previous year’s figures of £477 million. The adjusted pre-tax profits declined slightly by 1 percent to £490.5 million. Following the guidance, its adjusted profit before tax margin reached 48 percent, but it only fell from 51.1 percent in FY22.

The net profit depleted to £363.6 million from £396.1 million, which is a decline of 8 percent. The basic earnings per share at the year-end dropped down to 86.9 pence from 92.9 pence, while the adjusted figure shrank ever so slightly to 94.7 pence from 96.3 pence. Despite the profit decline, the broker proposes a dividend distribution of 45.2 pence, which is an increase from 44.2 pence.

New Dividend Plan

IG spent £186.2 million in the fiscal year 2022 in repurchasing its shares. It has now expanded the buyback program, allocating £250 million. Initially, the broker launched its £150 million share buyback program last year and expanded it earlier this year.

“Looking ahead, we’re well positioned to continue investing for growth given the strength and consistency of our cash flow and balance sheet. We keep a close watch on profit margins and in FY24 will continue to look for opportunities to achieve even greater cost efficiency. We’re the home of active traders worldwide, and we are building a more sustainable, long-term business that delivers for all stakeholders,” Rozes said.

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