IG Group reports a strong fiscal year, Forex growth in UK slows down, Japan is becoming competitive

IG Group issued the following trading update relating to the financial year ended 31 May 2009. While IG is not a major Forex player it is still medium sized and is one of the largest UK brokers.

The Group expects to report revenue of around £257m (2008: £184m) and adjusted profit before tax of around £125m (2008: £97m). Excluding the impact of FX Online Japan

KK (“FXO”), which the Group acquired during the period, organic revenue growth for the year was 25%. For the final quarter organic revenue growth was 18% year on year, compared to 12% in the third quarter. This improvement in rate of growth was achieved despite significant reductions in the level of market Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.

The UK and Australia Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term figures were lower in the third quarter but improved in the fourth. The revenues and profits were bolstered by the newly acquired Japanese FXO as well as by the rally in equity markets which contributed to higher client trading.

FXO also faced an increased competition in the local market which immediately resulted in major drop in earnings in February.

This should serve as a warning sign to all Forex brokers operating in developed markets only: either break into new and emerging markets (Dubai) or expand your offering to clients. Forex is no longer enough in order to keep up with the pace.

Full release is embedded below:

IG Group update for the financial year ended 31 May 2009 -