TIDMIGG
RNS Number : 8690R
IG Group Holdings plc
11 March 2021
11 March 2021
LEI No: 2138003A5Q1M7ANOUD76
Third Quarter Revenue Update
'Another consecutive, exceptional quarter for revenues driven by
continued high levels of client activity, with the Significant
Opportunities revenue target now anticipated to be substantially
achieved in FY21, a year ahead of plan'
IG Group Holdings plc ("IG", "the Group", "the Company"), a
global leader in online trading, today issues its scheduled update
on revenue for the three months to 28 February 2021 ("Q3 FY21"),
representing the third quarter of the financial year ending 31 May
2021 ("FY21").
Business performance in Q3
IG continued to see exceptional levels of trading activity
throughout the third quarter, delivering revenue of GBP230.3
million, 65% higher than the same period in the prior year (Q3
FY20: GBP139.8 million) and up 11% on Q2 FY21. Performance was
driven by a combination of sustained elevated levels of trading
from IG's existing clients and continued high levels of client
acquisition with a record 230,100 clients active in the quarter,
representing growth of 60% year over year (Q3 FY20: 143,800) and
11% on Q2 FY21. The level of revenue per client for the Group's OTC
Leveraged clients was maintained at similar levels to those
reported in Q1 and Q2 FY21 and 9% higher than the prior year
period.
-- Q3 FY21 revenue in the Core Markets was GBP192.7 million, up
67% year over year (Q3 FY20: GBP115.7 million) with active clients
reaching 191,700. Within our non-leveraged offering, we saw a
period of exceptional demand which drove significant increases in
revenue, revenue per client, and client acquisition in the
period
-- Q3 FY21 revenue in the Significant Opportunities portfolio
was GBP37.6 million, up 55% on the prior year period (Q3 FY20:
GBP24.2 million). This was largely driven by a 50% increase in the
number of active clients to 40,100 (Q3 FY20: 26,700)
Revenue by product (GBPm) Q3 FY21 Q3 FY20 % Change
------------------------------- -------- -------- ----------
OTC Leveraged 210.5 134.0 57%
Exchange Traded Derivatives 5.4 3.9 40%
Stock Trading and Investments 14.4 1.9 619%
------------------------------- -------- -------- ----------
Group 230.3 139.8 65%
------------------------------- -------- -------- ----------
In the quarter 40,300 new clients placed a first trade with
23,900 new OTC Leveraged clients, up 81% year over year (Q3 FY20:
13,200), 3,700 new Exchange Traded Derivatives clients, and 18,300
new Stock Trading and Investments clients. There were 5,700 new
clients that traded more than one product and therefore qualified
as multi-product clients. The level of client acquisition in Q3 was
similar to the elevated levels seen in the prior two quarters of
FY21 with the exception of a short period in late January / early
February when the Group saw an unprecedented spike in new client
demand, largely in response to heightened news flow relating to
certain listed US stocks.
Business performance in Q3 YTD
Year to date revenue of GBP647.1 million is 66% higher than the
prior year period (Q3 FY20 YTD: GBP389.7 million) with active
clients up 60% at 282,900.
-- Q3 FY21 YTD revenue in the Core Markets was GBP533.2 million,
up 64% on the prior year period (Q3 FY20 YTD: GBP325.5 million)
with 224,900 active clients
-- Q3 FY21 YTD revenue in the Significant Opportunities
portfolio was GBP113.9 million, 77% higher than the prior year
period (Q3 FY20 YTD: GBP64.2 million) with 60,700 active clients.
Momentum has been maintained across the portfolio and has exceeded
our expectations. As a result, we now anticipate substantially
achieving our three-year revenue target of GBP160 million by the
end of FY21, one year ahead of schedule
Revenue by product (GBPm) Q3 FY21 YTD Q3 FY20 YTD % Change
------------------------------- ------------ ------------ ----------
OTC Leveraged 599.7 371.6 61%
Exchange Traded Derivatives 17.7 11.7 51%
Stock Trading and Investments 29.7 6.4 369%
------------------------------- ------------ ------------ ----------
Group 647.1 389.7 66%
------------------------------- ------------ ------------ ----------
Outlook
With the sustained higher levels of volatility in the financial
markets in FY21, IG's active client base is now at record levels
and is materially larger than in the prior year period, with
trading behaviours and levels of retention comparable to historical
averages. The Group is in a strong position to deliver on its
growth strategy and will continue to optimise its resources to
deliver longer term attractive growth. Should IG see normalisation
in financial market volatility, or a stabilisation in the macro
environment, we would anticipate some reduction in the level of
client acquisition and activity, although underpinned by the larger
high-quality client base.
tastytrade
Trading has been very strong, with the tastyworks brokerage
business accelerating its rate of active account growth in 2021 and
reporting a 100% increase in the number of active trading accounts
during the month of February 2021 versus the prior year period. The
strong performance in brokerage is mirrored in the tastytrade
education and content business, with registrants growing by over
100,000 in the two months to the end of February to nearly 1
million. This performance reinforces the strategic and financial
rationale of the tastytrade acquisition, creating a strong
foundation for the business to deliver future growth. With some
regulatory approvals now obtained and others pending but on track,
the acquisition is anticipated to close in the first quarter of
FY22.
June Felix, Chief Executive Officer:
"I am delighted with the excellent results and progress we have
made towards delivering on our strategic goals. The continued
performance from the Significant Opportunities portfolio has been
remarkable, and we anticipate substantially achieving the revenue
target of GBP160 million one year ahead of plan. The Group is also
continuing to grow the size of its high quality and loyal client
base which represents a long-term asset to the Group.
Our planned US acquisition of tastytrade is progressing well and
the outstanding client growth delivered in the period underlines
the further, significant growth potential of this business. This
accelerates our strategy to drive new sources of growth, while also
expanding the Group beyond its core OTC offering.
I would like to take this opportunity to thank our people for
their continued hard work during the quarter. Operationally, this
has been one of the busiest periods in IG's history, and our global
workforce has responded with the kind of dedication, resilience and
professionalism that is embedded in the IG culture."
The Group's next scheduled market announcement will be its full
year FY21 results, scheduled for July 2021.
For queries, please contact:
IG Group Investors IG Group Press FTI Consulting
Liz Scorer Ramon Kaur Neil Doyle / Ed Berry
020 7573 0727 07388 440 127 020 3727 1141 / 1046
investors@ig.com press@ig.com
Disclaimer - forward-looking statements
This statement, prepared by IG Group Holdings plc (the
"Company"), may contain forward-looking statements about the
Company and its subsidiaries (the "Group"). Such forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "projects",
"estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors which are beyond the
Company's control and are based on the Company's beliefs and
expectations about future events as of the date the statements are
made. If the assumptions on which the Group bases its
forward-looking statements change, actual results may differ from
those expressed in such statements. There are a number of factors
that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking
statements, including those set out under "Principal Risks" in the
FY20 Group Annual Report for the financial year ended 31 May 2020.
The Annual Report can be found on the Company's website
(www.iggroup.com).
Forward-looking statements speak only as of the date they are
made. Except as required by applicable law and regulation, the
Company undertakes no obligation to update these forward-looking
statements. Nothing in this statement should be construed as a
profit forecast.
About IG
IG empowers informed, decisive, adventurous people to access
opportunities in over 17,000 financial markets. With a strong focus
on innovation and technology, the Company puts client needs at the
heart of everything it does.
IG's vision is to provide the world's best trading experience.
Established in 1974 as one of the world's first providers of
financial derivatives to retail traders, it continued leading the
way by launching the world's first online and iPhone trading
services.
IG is an award-winning, multi-product trading company which
allows retail, professional and institutional clients to trade 24
hours a day, 7 days a week ([1]) . IG is the world's No.1 provider
of CFDs ([2]) and a global leader in forex derivatives. It provides
leveraged services with the option of limited-risk guarantees and
offers an execution-only stock trading service in the UK and
Australia. IG has a range of affordable, fully managed investment
portfolios, which provide a comprehensive offering to investors and
active traders.
IG is a member of the FTSE 250, with offices across Europe,
including a Swiss bank, Africa, Asia-Pacific, the Middle East and
North America. IG Group Holdings plc holds a long-term investment
grade credit rating of BBB- with a stable outlook from Fitch
Ratings.
[1] Excluding 10pm Friday (GMT) to 8am Saturday (GMT)
[2] Based on revenue excluding FX (from published financial statements, June 2020)
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