Three IG Group Subsidiaries Report Mixed Results for Fiscal Year 2023

by Damian Chmiel
  • Profits reported by IG Markets and IG Index decreased slightly in FY23.
  • However, IG Trading and Investments reported a robust growth.
United kingdom, london
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Three British subsidiary companies of the financial conglomerate IG Group have released their data for the fiscal year 2023 (FY23). For two of them, the financial result was worse than the previous year, but one reported a significant increase in profitability.

Three IG Group Subsidiaries Reported FY23 Results

As of today (Tuesday), reports submitted by three subsidiary companies, Market Data Limited and its parent company IG Group Holdings Plc, are available in the British Companies House register. The first of these companies is IG Markets Limited, which provides over-the-counter (OTC) trading services.

However, in August 2022, it sold its stock trading and investment business to IG Trading and Investments Limited, another subsidiary, which is a new entity responsible for non-OTC trading. The third company is IG Index Limited, which, in addition to OTC derivatives, also offers the UK customers financial spread beats.

All of the mentioned companies are licensed by the Financial Conduct Authority (FCA ). Their financial reports pertain to the fiscal year ending 31 May 2023. They indicate that the net profit of both IG Markets and IG Index declined slightly, while the results of the newly established IG Trading and Investments saw a significant increase following a net loss reported the previous year.

What Do IG Company Reports Reveal?

IG Markets reported a trading revenue of £405.2 million, compared to £453.6 million the previous year. Maintaining operational costs at a similar level as in fiscal year 2022 (FY22) resulted in a decrease in net profit to £171.3 million from £188.2 million.

For IG Index, the net trading revenue in FY23 was £236.5 million, down from £262.5 million the previous year. After-tax net profit decreased by about £15 million to £102.5 million. In both reports, the management attributed the decline to inflationary pressures, higher interest rates, increased market volatility , and a decline in global equity prices.

"Inflationary pressures have led to increased third-party operating costs, and the rise in central banks' policy rates has resulted in an increase in interest income earned on cash and cash equivalents. The Directors continue to monitor the impact of these macroeconomic factors on the operations of the Company," the financial reports stated.

IG Trading and Investments began operations after acquiring part of the business from IG Markets in August 2022. Throughout FY23, the company achieved a net profit of £9.17 million, compared to a loss of nearly £800,000 the previous year. Total equity increased from £3.5 million to £20.7 million.

The entire Group has not yet published its financial results for FY23. However, from the report for H1 of the previous fiscal year, it is evident that the company recorded a 10% increase in revenue and a pre-tax net profit of £240.5 million.

IG Group to Reduce Staff

The reports emerge as IG Group is set to reduce its workforce by approximately 300, equating to 10% of its entire staff by the end of 2023. This decision follows a comprehensive analysis of the firm's potential cost-saving avenues.

Revealed today, the trading firm aims to achieve steady cost reductions amounting to £50 million annually. They forecast structural savings of £10 million in fiscal year 2024 (FY24), escalating to £40 million in 2025 and reaching £50 million by 2026.

Furthermore, the trading entity emphasized expectations of an extra £10 million in savings in FY24 due to decreased variable expenses. These cutbacks mirror the milder market situations reported in Q1, which persisted into Q2, culminating in an aggregate annual savings of £20 million.

Three British subsidiary companies of the financial conglomerate IG Group have released their data for the fiscal year 2023 (FY23). For two of them, the financial result was worse than the previous year, but one reported a significant increase in profitability.

Three IG Group Subsidiaries Reported FY23 Results

As of today (Tuesday), reports submitted by three subsidiary companies, Market Data Limited and its parent company IG Group Holdings Plc, are available in the British Companies House register. The first of these companies is IG Markets Limited, which provides over-the-counter (OTC) trading services.

However, in August 2022, it sold its stock trading and investment business to IG Trading and Investments Limited, another subsidiary, which is a new entity responsible for non-OTC trading. The third company is IG Index Limited, which, in addition to OTC derivatives, also offers the UK customers financial spread beats.

All of the mentioned companies are licensed by the Financial Conduct Authority (FCA ). Their financial reports pertain to the fiscal year ending 31 May 2023. They indicate that the net profit of both IG Markets and IG Index declined slightly, while the results of the newly established IG Trading and Investments saw a significant increase following a net loss reported the previous year.

What Do IG Company Reports Reveal?

IG Markets reported a trading revenue of £405.2 million, compared to £453.6 million the previous year. Maintaining operational costs at a similar level as in fiscal year 2022 (FY22) resulted in a decrease in net profit to £171.3 million from £188.2 million.

For IG Index, the net trading revenue in FY23 was £236.5 million, down from £262.5 million the previous year. After-tax net profit decreased by about £15 million to £102.5 million. In both reports, the management attributed the decline to inflationary pressures, higher interest rates, increased market volatility , and a decline in global equity prices.

"Inflationary pressures have led to increased third-party operating costs, and the rise in central banks' policy rates has resulted in an increase in interest income earned on cash and cash equivalents. The Directors continue to monitor the impact of these macroeconomic factors on the operations of the Company," the financial reports stated.

IG Trading and Investments began operations after acquiring part of the business from IG Markets in August 2022. Throughout FY23, the company achieved a net profit of £9.17 million, compared to a loss of nearly £800,000 the previous year. Total equity increased from £3.5 million to £20.7 million.

The entire Group has not yet published its financial results for FY23. However, from the report for H1 of the previous fiscal year, it is evident that the company recorded a 10% increase in revenue and a pre-tax net profit of £240.5 million.

IG Group to Reduce Staff

The reports emerge as IG Group is set to reduce its workforce by approximately 300, equating to 10% of its entire staff by the end of 2023. This decision follows a comprehensive analysis of the firm's potential cost-saving avenues.

Revealed today, the trading firm aims to achieve steady cost reductions amounting to £50 million annually. They forecast structural savings of £10 million in fiscal year 2024 (FY24), escalating to £40 million in 2025 and reaching £50 million by 2026.

Furthermore, the trading entity emphasized expectations of an extra £10 million in savings in FY24 due to decreased variable expenses. These cutbacks mirror the milder market situations reported in Q1, which persisted into Q2, culminating in an aggregate annual savings of £20 million.

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