IG Group Reports Record Revenue Quarter in Quiet Summer Markets

IG’s trading update shows revenues per client increased materially in Q1 of fiscal 2018

IG Group (LON:IGG) has been on a tear in the first quarter of fiscal 2018 that ended for the company on the 31st of August 2017. The multi-asset brokerage and spread betting provider reports that revenues came in 21 percent higher than a year ago at £135.2 million ($182.5 million). The increase comes despite a relatively quiet period for the financial markets over the summer and despite the base effects of Brexit last year.

IG Group’s (LON:IGG) revenues during Q1 2018 are particularly stronger in the EMEA region, rising 31 percent to £39 million ($52.6 million) and in the APAC area, where the company is reporting an increase of 32 percent to £33.1 million ($44.7 million). Looking at the broker’s core UK business, IG Group posted an increase in revenues of 11 percent to £58.8 million ($79.4 million).

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Revenues Per UK Client Hit £1,500

IG Group’s (LON:IGG) trading revenues per user are increasing materially across the board. Despite declining client numbers in the UK, where the firm’s total client count came in 10 percent lower at about 39,200, revenues per client increased to 23 percent to £1,500. Looking at the EMEA region, the figure rose 24 percent to £1291 per user. The figure in the APAC area rose 34 percent to £1313 per client.

The bulk of IG Group’s revenue is coming from leveraged products traded over-the-counter (OTC). Those include the company’s forex, CFDs and spread betting business, where the broker generated £130.9 million ($176.6 million).

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Share dealing an investments products generated £0.9 million ($1.2 million). This segment has substantial prospective growth as the number of clients that are using these services increased from 10,300 to 24,200.

Nadex Results

The US operations of IG also increased year-on-year. The company owns binary options exchange Nadex, which is one of the two legitimate providers of the product to retail investors along with Cantor Exchange.

Revenues increased by 15 percent to £3.4 million ($4.6 million), as clients also increased by 15 percent to a total of 10,300. Revenues per client remained more or less flat.

Uncertainty Ahead

IG Group is highlighting in its trading statement that the company’s business may be impacted adversely by increasing regulatory scrutiny on the retail trading industry. The risks are particularly focused on the UK and Europe.

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