IG Group reports Q1 FY19 volumes, ESMA measures impact just one month of trading


IG Group office

UK online trading leader IG Group Holdings plc (LON:IGG) has released its scheduled update on its revenue for the three months to 31 August 2019 (Q1 FY20), the first quarter of its financial year ending 31 May 2020 (FY20).

Business performance

Revenue in Q1 FY20 was £129.1m, 11% higher in comparison with the average of the quarterly periods in the prior year. The ESMA product intervention measures relating to the provision of CFDs impacted just one month of trading in Q1 FY19.

Source: iggroup.com

Medium term financial targets

The Group set out its targets for revenue growth from the successful implementation of its strategic plan, of 3-5% per annum growth over the medium term in its core markets, and an increase of £100m in revenue from the significant opportunities to around £160m in FY22.

In Q1 FY20 revenue in the Group’s core markets (OTC leveraged derivatives and stock trading and investments) was £109.2m, compared with the average of £100.5m per quarter in Q2-Q4 FY19, a growth rate of 9%.

The number of OTC leveraged active clients in the core markets in Q1 FY20 was 5% higher than in the average of Q2-Q4 FY19. Q1 FY20 revenue from the Group’s significant opportunities (OTC leveraged derivatives and exchange traded derivatives) was £19.9m, an increase of £7.4m compared with Q1 FY19.

Regulation

On 22 August 2019 the Australian regulator ASIC issued a consultation paper on potential product intervention measures relating to the provision of CFDs and binary options. The Group has previously set out that it expected that product intervention measures would be introduced in Australia.

The company however claims that ASIC’s decision will not change the Group’s previously stated target of revenue growth in the core markets of 3-5% per annum over the medium term. The Group’s guidance that it expects to return to revenue growth in FY20 also remains unchanged.

Directorate Change

As previously announced, Andy Green will step down as Chairman at the conclusion of the Company’s AGM on 19 September 2019.

According to the company, the search for a new Chairman to lead the Board is at an advanced stage. A preferred candidate has been identified and the appointment is subject to securing relevant regulatory approvals. Whilst the appointment process continues, Jonathan Moulds, an existing Non-Executive Director and Chairman of the Board Risk Committee, will be appointed as Interim Chairman immediately following the AGM.

Additionally, the Board has agreed to appoint Malcolm Le May as Chairman of the Nomination Committee immediately following the AGM.

The Board has today agreed to appoint Andrew Didham as an additional Non-Executive Director of the Company. His appointment will also take effect at the Board meeting immediately following the AGM. Didham will then seek election by shareholders at the AGM in September 2020.

 

Malcolm Le May
Malcolm Le May

Commenting on the search for the new Chairman and the interim appointment of Jonathan Moulds, Senior Independent Director Malcolm Le May said:

Following an extensive, externally facilitated process we are at an advanced stage of our search for a new Chairman to lead the Board. Whilst we finalise the appointment, my thanks go to Jonathan Moulds for agreeing to take the role on an interim basis.

I am also delighted to welcome Andrew Didham to the Board. He is a highly experienced Non-Executive Director with significant financial services experience and will complement the range of skills of existing Board members, especially as a member of the Audit Committee.

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