IG revenues grow amid sustained period of market volatility
IG has reported “exceptionally high” revenues reflecting increased levels of client trading amid a sustained period of market volatility.
High levels of volatility have persisted through March and into April. As such, revenue in the first 36 trading days of the fourth quarter is estimated to be around £173m. This compares to £139.8m in the third quarter.
In a statement IG said: “The board and the group’s 1,950 employees are conscious of the fact that many businesses and individuals are facing considerable hardship as a result of the Covid-19 virus, and recognise that it is fortunate that IG’s business performs well in periods of financial market volatility.”
IG still expects to maintain the 43.2p per share annual dividend.
IG has also reported it was growing the number of OTC leveraged clients, with record numbers of applications. In this period, 22,500 new OTC leveraged clients traded with the group for the first time. It compares with the 36,000 new clients in the first three quarters of the full year.
The trading platform is updating guidance for its operating expenses. IG had previously guided that expenses, excluding variable remuneration, were expected to increase by around £30m in the full year to £290m. The firm has now updated this to £40m, to £300m.
IG said the increase “reflects the impact of the growth in the active client base and the high levels of client activity in Q4 and an increase in the provision for bad and doubtful debts.”
The high levels of revenue to date means the company expects the charge for variable remuneration to be around £42m. It compares with £25m in the previous year.
Chief executive June Felix said: “During such a prolonged period of volatility, we’ve seen high volumes of clients choosing to trade markets with IG, reflecting our business resilience, our robust systems and our commitment to delivering the best possible trading experience.”
IG launches education fund
IG has committed £5m to the IG Brighter Future Fund, which works to improve educational opportunities for underprivileged children hit by the impact of the coronavirus pandemic.
The group said £2m will be used to “deep our existing UK partnership with the education charity Teach First.”
Felix said: “The IG Brighter Future Fund builds on our culture of supporting the local communities in which we operate, helping disadvantaged young people gain access to improved educational opportunities.”
Shares are up 0.48 per cent.