More Details on IG Group Financial Results - Europe Growing Fast

IG Group released their full year results for the period ending May 31st 2013, earlier this week. Beyond the top and bottom line numbers, the broker also provided more specifics within their shareholder presentation.

Some of the key details (full presentation below):

UK revenues nearing a drop below 50%: Even with advances in market share in key European and APAC markets, IG’s fortunes continue to be dominated by its UK business. During the year, UK revenues including both its CFD and Spreadbetting products totaled 51.5% of the firm’s revenues. However, the figure continues to fall, as IG’s global efforts taking place. Total UK revenues have risen 23.8% from £150.5M in 2009 to a present £186.3M. This compares with a 79.6% increase in Rest of the World revenues from £97.8M to £175.6M during the same period.

Europe and Australian market share increases: Pacing IG’s global diversification has been growth in its European and Australian business. Specifically in Europe, IG has done very well with revenues climbing 135% to £71.3M from £30.2M in 2009. According to the broker, it currently holds market share of 11% and 9% in France and Germany respectively, the number two broker in each country.

NADEX revenues still miniscule: IG reported that revenues from its US based binary options subsidiary, NADEX grew 40% YoY; albeit to a total of only £2M. Despite, the growth, the low total revenue figures beg the question of whether of the subsidiary’s relevance. The unit is in a tough position as brokers interested in partnering with the Exchange need to become NFA registered IBs. With non-US business, brokers have shown that they prefer to simply use white label products from the many binary platform providers on the market.

IG rebranding: The firm purchased the IG.COM TLD earlier this year and has used the occasion to rebrand. Part of that rebrand is also the initiation of a single login architecture. With the upcoming launch of MT4, the single login will allow IG customers to trade from various platforms with one account.

Client retention: One of the industry sayings is that Forex clients last around six months. In this regard, IG’s figures show that consistently over the past four years that only about 20% of customers don’t last six months. In addition, they reported that 71% of clients were active for more than a year. Overall, IG reported total active accounts 97,568 at the end of the period, with 35,854 clients trading for the first time in the 2013 accounting period. (retention figures don’t include Japan)

Revenues per client: UK CFD traders continued to register the highest revenues per client at £2654 for H2 2013. Also rising was IG’s average revenue per client to £1819. However, average revenues of clients from Europe have been declining, most likely due to effects of the financial crisis.

IG Group FY13 Shareholder Presentation