IG Group announces results – what did we learn?
UK humming along, growing internationally, Japan market shrinking.
IG Group, the UK's leading online financial spreadbetting and CFDs broker, announced today more details from its first half results, and they looked good. (The company had already given us a peak into 1H revenues on November 29, after which IG Group's shares traded up 9%). Note that IG Group has a May 30 year-end, so that technically these were results for the first half year of fiscal 2012, i.e. the sixth-month period ending November 30, 2011.
- Revenues were up 25% over 1H-2011 (would have been 28% if not for IG Group's discontinued Sports spread betting business Extrabet). All areas (except Japan - see below) grew nicely: UK by 23%, Australia 43%, Europe (ex-UK) 41% and Rest-of-World 54%.
- Second quarter (Sep-Oct-Nov) revenues (£96.0M) were actually down 4% as compared to Q1 (£99.6M), but that was mainly due to a blowout month of August (part of fiscal Q1), which saw high levels of volatility after S&P downgraded the U.S.
- IG Group still does more than half its revenue in the UK - 52%, to be precise.
- IG Group's business in Japan - FXOnline Japan KK, one of the top 10 online Forex brokers in Japan - as well as apparently the entire Japanese Forex market, continues to suffer following further leverage restrictions implemented in August. Japan revenues were down 25%, reflecting a drop in revenues-per-client of 19%, as well as an 8% drop in number-of-active-clients. We believe these types of dropoffs are typical of the Japanese Forex market, which has lost its #1 Forex market position to Europe over the past two years.
To download IG Group's first half results release click here.