It isn’t easy to keep growing when you are already the market leader. But IG Group seems to be able to continue doing just that.
Leading UK online spreadbetting and financial trading firm IG Group Holdings plc (LON:IGG) has published its trading update regarding its performance in the first quarter of fiscal year 2016 (IG has a May 31 year-end, so Q1-2016 ended August 31). During what is usually seen as a slow quarter for trading, the group managed to register a steep rise in revenues both YoY and QoQ, on the back of the raft of economic and political events that spurred trading activity.
For the quarter to August 31, 2015, IG Group registered revenue of £106.0 million ($164.3 million), up an impressive 24% from the same quarter of the prior year and 21% over the previous quarter. The company noted that performance was good in all months in the quarter, but client activity levels were at their highest during the second half of August.
At a Group level, active client numbers were ahead of the same quarter in the prior year by 19% and ahead of the fourth quarter of 2015 by 4.9%. The growth was driven mostly by the continued strong levels of new client recruitment; client first trades in the quarter were ahead of the same period in the prior year by more than 50%.
IG’s home UK market remains more than half of IG’s overall revenues, despite seeing strong growth in its other major geographical markets abroad. The ‘problem’? IG keeps growing in the UK, this time showing 23% growth over last year.
Across regions, revenue staged a rise in all of them. The UK continues to deliver strong results, with revenue up 23% year on year, on the back of growth in both active client numbers and average revenue per client. Recent client growth trends witnessed in Europe persist, with active client numbers up by 18% on the same period last year. In the Australian office, revenue and client numbers rose by around 20%, with just over a quarter of the client growth coming from the broader APAC region. Revenue in Rest of World jumped 54% year on year.
During the first quarter of fiscal year 2016, IG launched its stockbroking offering to Germany and Austria. At the end of August, IG had just over 5,500 funded stockbroking accounts and continues to see cross-selling to the leveraged product set. In June, IG opened its latest global sales office in Dubai, with a full advertising and media launch taking place in September. Regarding the Swiss office, early progress has been encouraging, the company says.
Outlook
The company says that the strong start to the year places the business well to deliver against full year expectations. At the same tine, IG stresses, it is impossible to predict the market conditions for the rest of the year and therefore too early to draw many conclusions.
IG has a clear strategy and will continue to execute against its priorities, which this financial year include rolling out the stockbroking offering to additional countries, launching ETF portfolios, delivering further improvements in the client conversion process and moving the mobile interface forward.
The latest update comes on the heels of the release of IG’s Annual Report 2015, which also showed a robust rise in revenues and proved the group’s ability to outweigh effects of challenging market events like “Black Thursday”.
To view the official filing with the LSE, click here.