IG Group Q3 revenues down 12% QoQ to £117.4 million, Q4 starts strong

IG Group office

Online trading industry leading broker IG Group Holdings plc (LON:IGG) has reported its results for Q3-2017, indicating a slower quarter than its record Q2, but still coming in fairly strong.

IG Group has a May 31 fiscal year end, so the quarter in question was the three month period of Dec-Jan-Feb.

Before we get to the Q3 results, as we noted above we’d remind LeapRate readers that IG had an absolutely phenomenal (and record) Q2, which included some post-Brexit vote volatility at the end of the summer and the US election in November, which brought with it wild swings in the markets – and well-above-normal trading volumes.

IG Group Q3 revenue, at £117.4 million, was 4% down on what was the strongest quarter of the prior year and as noted down 12% off of record Q2 results. However active client numbers were ahead by 13%, driven by ongoing success in online marketing, with new first trades in the period over 20% higher than the prior year. Revenue per client was down by 15%, with current clients trading less often in the quiet period and the continued growth in the non-leveraged business and Nadex, where average revenue per client is significantly lower.

From a geographic perspective, revenue was ahead in all regions in Q3 except the UK, with a strong performance in the Rest of the World driven by good growth in the US, Dubai and South Africa.  Revenue in the UK was behind by 15%, with the prior year performance being particularly strong.  More mature markets tend to outperform in more volatile periods as the large installed client base reactivates, as happened in the prior year, and underperform in quieter conditions.

IG’s stockbroking business continued to grow well in the period in both the UK and Australia, with just over 16,000 clients holding a position at the end of February. To extend its unleveraged offering, IG expects to launch its discretionary managed smart portfolio ETF service in the UK during the fourth quarter.

IG did note that the regulatory backdrop for leveraged trading in a number of countries remains uncertain. Over the last few months, IG stated that it has responded to regulator consultations in the UK and Germany and worked closely with the regulator in Dubai. IG said that it was pleased by the clarity provided in France, which means that the Limited Risk Account the company offers there is entirely compliant with the new legislation. IG is also now working on its responses to consultations in The Netherlands and Ireland.  As clarity is provided on the conclusions of outstanding regulatory consultations, the Company will update the market as appropriate.

IG also issued a fairly bullish outlook. Following a quiet third quarter in financial markets, the company said that the fourth quarter has started better, although it is impossible to predict the market conditions for the rest of the year or to draw precise conclusions at this stage.  As the company enters its final quarter of fiscal 2017, none of the announced regulatory changes has yet had any impact, client recruitment remains strong and the underlying business is performing well.

IG’s full Q3-2017 results announcement can be seen here.

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