Online trading firm IG Group’s shares slide as it announces quarterly revenue drop
Shares in online trading business IG Group tumbled today after it said its revenue fell in the three months to 28 February.
IG Group has been hit hard by a regulatory crackdown on the offering of contracts for difference to retail clients.
The company said its net trading revenue was £108m in the third quarter, 12 per cent lower than in the previous quarter.
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It blamed the fall in revenue on lower revenue per client which it said “reflects the reducing levels of volatility in financial markets throughout the quarter, culminating in persistently low levels of volatility and market activity in February”.
IG’s year-to-date net trading revenue of £359m is 15 per cent lower than in the same period the previous year which it said reflects the impact of the regulatory changes and exceptional performance in the third quarter of 2018 which was driven by strong cryptocurrency performance.
Looking forward IG said: “The group's revenue in any one period is affected by market volatility and client trading opportunities, and the level of revenue in the last quarter of FY 2019 is difficult to predict accurately. As previously communicated, the Company continues to expect that its revenue in FY19 will be lower than in FY18.”
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The company reiterated that it expects to maintain its 43.2p per share annual dividend until its earnings allow it to resume progressive dividends.
Its share price fell 8.7 per cent to 500p this morning.