IG Group Unlocks Over £425 Million amid a Capital Reduction

IG Group (LON: IGG) has carried out a capital reduction, an accounting move that reshuffles money already held in the company’s equity accounts. The process was finalised after the UK High Court approved the plan, following a green light from shareholders.

Hundreds of Millions of Pounds Unlocked

Announced today (Friday), the company trimmed three reserves: it released £300 million by briefly creating and then cancelling a new class of “New Deferred Shares”, reduced an additional £125.7 million from the share premium account, and also cut down the capital redemption reserve by £3,501.

IG Group is a London-listed company, and UK law ring-fences certain reserves; they cannot be paid out as dividends or used for buybacks until unlocked.

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By shifting the amounts above into “distributable profits”, IG gains extra room to pay larger or more regular dividends, continue or expand share buyback programmes, or carry out other actions in favour of shareholders, all without raising new capital.

In an earlier circular, IG also confirmed that it would use the capital for “the flexibility to make future distributions of profits in cash or in specie and/or to make purchases of its own shares.”

There is also a chance that IG might buy other brands. Earlier this year, the London broker bought the entirety of Freetrade, a retail trading platform, paying £160 million in cash. The deal, however, drew some criticism from Freetrade’s early investors.

Returning Value to Shareholders

The company is also using its available cash to buy back its shares. It has an ongoing £200 million share buyback programme, which was launched in July last year and topped up in January 2025.

The London-listed broker also completed two other buyback programmes with headline amounts of £150 million and £250 million, respectively.

Meanwhile, IG is expected to close the ongoing fiscal year 2025 with revenue and adjusted profit that “meet or slightly exceed the upper end of the current range” of market expectations. It said it has “performed strongly in Q4 FY25 as elevated volatility across a range of asset classes, particularly in April, has resulted in higher levels of client trading activity than expected in typical market conditions.”

In the first quarter of FY25, which spanned June to August 2024, IG generated £278.9 million in revenue, a 15 per cent year-on-year increase. In Q2 and Q3, the company brought in £243.6 million and £268.0 million, respectively.