British FX company IG Group, today issued its interim management statement for the period commencing June 1, 2013 and ending September 16, 2013.
Compared with the same period during the previous year, the company’s overall revenue has shown an increase of 15%, in congruence with the industry’s general recovery from the doldrums which beguiled it last year.
During the first quarter of 2013, this 15% increase in revenue represents a figure of £93.6 million in financial terms.
According to IG Group, client activity this year was at its strongest during the earlier stages of this period, in response to heavy falls in equity markets on the back of QE, tapering fears in the US and concerns over the Chinese economy.
Revenue was well ahead of last’s year in the UK, Europe and the rest of world, but behind in Japan and in Australia, with the performance impacted by subdued consumer sentiment during the recent election, as well as the weakness in the Australian dollar.
Average revenue per client was up strongly in the UK, Europe and the rest of the markets in which IG Group operates, with an increase in both the number of trades and the revenue per trade.
Active client numbers were also ahead in Europe and other worldwide markets, while in the more mature markets of the UK and Australia, there were fewer active clients trading in the period. This fall in active client numbers, reflects both weakness in the recruitment and conversion of new trading clients, and the strategy of the group not to actively attract or retain very low value clients, with the drop off occurring in the lowest value brackets.
During this period the group completed the migration of its websites in the UK and Australia to the IG.Com domain, and is on track to have the roll-out substantially completed by the end of the second quarter. Following a successful pilot during this period, IG Group has just begun to promote the MetaTrader 4 platform as part of a drive to increase its market share within the forex market.
The Italian derivatives tax came into force at the start of September, and although it contains a relatively complex charging structure, the company believes that the low level of taxation on its main Italian equity index CFD contract will limit the impact on revenue.
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In August, it was confirmed that IG’s share* of the Australian CFD market has grown by one percentage point to 38%, although, the market size contracted by around 7% to 41,000 traders, as fewer people joined the industry over the 12 month period.
The first quarter has provided IG with a solid start, and puts the company on track at this early stage of the year. However, the implications for the full year should be considered in the context of the weak comparative quarter, and the particularly strong second half of the prior year.
However, during July’s publication of its preliminary results for the 2013 fiscal year, the company stated that although, business had responded very well to the upturn in the trading environment during the second half of the fiscal year, net trading revenue experienced a reduction of 1.4% to £361.9 million.
To further illustrate the future direction which the company aims to take during the immediate future, Forex Magnates spoke to IG Group CEO Tim Howkins,, at this year’s iFXEXPO in Cyprus, a conversation during which Mr. Howkins explained that: “Cutting edge technology and high quality of service are the foundation on which IG was built, so we will continue to focus on our on-going commitment to provide clients with the best possible trading experience and services.”
“I believe mobile will become an even more important channel for our industry in the near future, so we will enhance our mobile offerings throughout all devices in their native form, in order to ensure we are at the forefront of key mobile technology. We will also continue to invest in high-end technology that offers the best support for our clients’ trading” said Mr. Howkins.
Whether the company remains interested in expansion into further areas is on the agenda, but is not certain at this point. Mr. Howkins explained “In regards to expanding to new markets, evaluating new international opportunities will continue to be at the forefront of our core business objectives.”
IG Group’s senior management outlined a range of initiatives following the results in July, aimed at broadening the company’s offering, attracting new clients and improving current client retention. The company intends to continue to work on these initiatives, which it believes will provide it with an increasingly strong platform for growth in future years.