REG - IG Group Hldgs plc - Interim results for the six months ended 30 Nov
23/01/2025 07:00
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RNS Number : 3596U IG Group Holdings plc 23 January 2025
LEI No: 2138003A5Q1M7ANOUD76
Interim results for the six months ended 30 November 2024
23 January 2025
IG Group Holdings plc ("IG", "the Group", "the Company"), today announces its
results for the six months ended 30 November 2024 ("H1 FY25").
Financial highlights
Earnings growth on prior year levels reflected more supportive market
conditions and lower costs.
- Total revenue of £522.5 million (H1 FY24: £472.6 million), up 11%.
- Net trading revenue of £451.7 million (H1 FY24: £402.4 million),
up 12% driven by higher revenue per client.
- Net interest income flat at £70.8 million (H1 FY24: £70.2 million)
as higher client money balances offset lower interest rates.
- Adjusted 1 profit before tax of £266.8 million (H1 FY24: £205.7
million), up 30%, at a margin of 51.1% (H1 FY24: 43.5%). Statutory profit
before tax of £249.3 million (H1 FY24: £176.4 million), up 41%.
- Adjusted basic EPS of 55.3 pence (H1 FY24: 38.9 pence), up 42% on H1
FY24. Statutory basic EPS of 51.7 pence (H1 FY24: 33.4 pence).
- Total capital return of £281 million split across dividends paid
and shares repurchased in the period (H1 FY24: £276 million).
- Increased interim dividend to 13.86p per share (H1 FY24: 13.56p).
- Extending the share buyback programme by £50 million to £200
million to be completed in the second half of FY25.
Strategic and operational highlights
Making progress delivering against the initial priorities outlined in July
2024, to improve our product, embed a high-performance culture and enhance
efficiency.
- Announced the acquisition of Freetrade, strengthening IG's UK
trading and investments proposition and providing access to new customer
segments and capabilities.
- Implemented a decentralised organisational model to enhance client
centricity.
- Taken decisive action to exit initiatives not delivering acceptable
returns, including the Spectrum multilateral trading facility ("Spectrum").
Spectrum was broadly breakeven in H1 FY25, and its core products will be
offered more cost efficiently over-the-counter.
- Total active clients of 295,300 were down fractionally on the prior
year (H1 FY24: 296,300). First trades of 33,900 were flat (H1 FY24: 33,800).
- tastytrade total revenue increased 15% year-on-year, within which
trading revenue reached a record $90.5 million (H1 FY24: $72.9 million).
tastytrade interest income was stable at $45.3 million (H1 FY24: $44.9
million).
Financial summary
£ million (unless stated) H1 FY25 H1 FY24 % YoY H2 FY24 % HoH
Net trading revenue 451.7 402.4 12% 442.6 2%
Total revenue 522.5 472.6 11% 514.7 2%
Adjusted operating costs(1) (277.4) (281.1) (1%) (283.0) (2%)
Adjusted profit before tax 266.8 205.7 30% 250.5 7%
Adjusting items(1) (17.5) (29.3) (40%) (26.1) (33%)
Statutory profit after tax 188.0 132.7 42% 175.0 7%
Basic earnings per share (p) 51.7 33.4 55% 45.1 15%
Adjusted basic earnings per share (p) 55.3 38.9 42% 50.4 10%
Interim dividend per share (p) 13.86 13.56 2% - -
(1) H1 FY25 adjusted operating costs exclude £17.5 million of recurring
non-cash items relating to the tastytrade acquisition. H1 FY24 adjusted
operating costs exclude £18.9 million of recurring non-cash items and £0.5
million of one-off costs relating to the tastytrade acquisition, and £9.9
million of one-off non-recurring costs related to the operational improvement
programme. H2 FY24 adjusted operating costs exclude £16.2 million of
recurring non-cash items and £0.8 million of one-off costs relating to the
tastytrade acquisition, and £9.2 million of one-off non-recurring costs
related to the operational improvement programme.
Breon Corcoran, Chief Executive Officer, commented:
"First half performance reflected more supportive market conditions, but we
have work to do to grow active customers which will be necessary to deliver
sustainably stronger growth.
"Our focus remains on executing against the priorities we outlined in July
2024, which are to improve our product, embed a high-performance culture
across the business and enhance efficiency.
"Last week, we were delighted to announce the acquisition of Freetrade, the
fast-growing, commission-free UK self-directed investment platform. The
transaction will strengthen IG's UK trading and investments offering and
provide access to new customer segments and capabilities.
"We have made progress in the first half of the year and have much more to do.
Our people are full of energy and committed to delivering stronger, more
sustainable growth.
"Current trading has been satisfactory, and we remain confident of meeting
consensus revenue and profit before tax expectations in FY25. I look forward
to updating you on progress in the second half of the year."
Further information
Investor Relations Media
Martin Price / Adnan Zab Edward Berry / Katherine Bell
020 7573 0020 / 020 7633 5310 07703 330 199 / 07976 870 961
investors@iggroup.com (mailto:investors@iggroup.com) iggroup.sc@fticonsulting.com
Analyst presentation
Breon Corcoran (CEO) and Clifford Abrahams (CFO) will host a webcast
presentation on IG's FY25 interim results for analysts and institutional
shareholders today at 09:30 (UK time). This will be followed by the
opportunity to ask questions via the conference call line and through the web.
To access the webcast or telephone conference call please register in advance
using the following links.
Webcast: https://pres.iggroup.com/ig063 (https://pres.iggroup.com/ig063)
Conference call: https://pres.iggroup.com/ig063/vip_connect
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fpres.iggroup.com%2Fig063%2Fvip_connect&data=05%7C02%7Cpricem%40iggroup.mail.onmicrosoft.com%7Cb419073266bd4bec7bf508dd236173d1%7C4b4cca9cedaf42f38e219070c5d9d76b%7C0%7C0%7C638705623681923434%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=YQGQND0kDbUV%2FH4N1mFhLPPcARRGxb28YYn9HmOZQU0%3D&reserved=0)
Presentation slides can be viewed at: https://www.iggroup.com/investors
(https://www.iggroup.com/investors/results-reports-and-presentations)
Alternative performance measures
IG Group management believes that the alternative performance measures
included in this document provide valuable information to the readers of the
financial statements as they enable the reader to identify a more consistent
basis for comparing business performance between financial periods. They also
provide more detail concerning the elements of performance which the managers
of these businesses are most directly able to influence or are relevant for an
assessment of the Group. Furthermore, they reflect how operating targets are
defined and performance is monitored by IG Group management. However, any
alternative performance measures in this document are not a substitute for
statutory measures and readers should also consider the statutory measures.
Refer to the appendices for further information and calculations of
alternative performance measures included throughout this document, and the
most directly comparable statutory measures.
Forward-looking statements
This preliminary statement, prepared by IG Group Holdings plc (the "Company"),
may contain forward-looking statements about the Company and its subsidiaries
(the "Group"). Such forward-looking statements can be identified by the use of
forward-looking terminology, including the terms "believes", "projects",
"estimates", "plans", "anticipates", "targets", "aims", "continues",
"expects", "intends", "hopes", "may", "will", "would", "could" or "should" or,
in each case, their negative or other various or comparable terminology.
Forward-looking statements involve known and unknown risks, uncertainties,
assumptions and other factors which are beyond the Company's control and are
based on the Company's beliefs and expectations about future events as of the
date the statements are made. If the assumptions on which the Group bases its
forward-looking statements change, actual results may differ from those
expressed in such statements. There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by these forward-looking statements, including those set out under
"Principal Risks" in the FY24 Group Annual Report for the financial year ended
31 May 2024. The Annual Report can be found on the Company's website
(www.iggroup.com (http://www.iggroup.com) ).
Forward-looking statements speak only as of the date they are made. Except as
required by applicable law and regulation, the Company undertakes no
obligation to update these forward-looking statements.
No offer or solicitation
This announcement is not intended to, and does not constitute, or form part
of, any offer to sell or an invitation to purchase or subscribe for any
securities or a solicitation of any vote or approval in any jurisdiction.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast or estimate
for any period.
Some numbers and period on period percentages in this statement have been
rounded or adjusted to ensure consistency with the financial statements. This
may lead to differences between subtotals and the sum of individual numbers as
presented. Acronyms used in this report are as defined in the Group's Annual
Report.
About IG
IG Group (LSEG:IGG)
(https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.iggroup.com%2F&data=05%7C01%7CSimon.Wright%40ig.com%7Cfa58780cb4c445598c5a08da3f12df38%7C4b4cca9cedaf42f38e219070c5d9d76b%7C0%7C0%7C637891647530086156%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=ZopP0pt%2Bpil6u7sT7JRD8OjvetOm4sSxJJ%2FDPRvXU2A%3D&reserved=0)
provides online trading platforms and educational resources to empower
ambitious clients around the globe. Headquartered in the UK, IG Group is a
FTSE 250 company that offers clients access to ~19,000 financial markets
worldwide.
Chief Executive Officer's statement
Financial performance in the first half of FY25 reflected more supportive
market conditions which resulted in higher revenue against an undemanding
prior year comparator. Lower costs contributed to higher margins and share
buybacks underpinned further growth in earnings per share.
I laid out my priorities in July 2024 which are to improve our product, embed
a high-performance culture across the business and enhance efficiency. We have
made progress and have much more to do to realise our potential.
I am delighted to welcome Clifford Abrahams as our new Chief Financial
Officer. Clifford joined us after the end of the first half on 16 December and
is already making a significant impact. His extensive experience of leading
high-performing teams makes him a valuable addition to the leadership team.
Clifford's leadership and expertise will be instrumental in delivering our
next phase of growth.
Improving our product
The focus we have had on improving our product has some early momentum with
the launch of content and features which customers have asked us for and which
close gaps to competitors. Examples include IG TopTrader which provides our
customers with real-time information on how our most successful traders are
positioning, deeper integration with TipRanks, a popular trading and
investments research platform, and integration of our OTC and exchange-traded
derivatives businesses with TradingView, a leading charting platform and
social network.
Towards the end of the first half, we rolled out measures which we expect to
enhance revenue retention in our OTC business by capturing more spread income
and lowering hedging costs, without taking more market risk, whilst enhancing
client experience.
On 16 January, we announced the acquisition of Freetrade, the fast-growing,
self-directed investment platform. The transaction will strengthen our UK
direct-to-customer proposition and provide access to new customer segments and
capabilities in a high-growth market. I'm delighted to welcome Viktor Nebehaj,
CEO and co-founder of Freetrade, and his team to IG as they continue to scale
the business. The acquisition is subject to regulatory approval and expected
to close in mid-2025.
The product enhancements we have made, and the acquisition of Freetrade, are
important first steps in improving our proposition, and we have more work to
do to close product and capability gaps and simplify our offering. Our focus
is on increasing organic growth, but we continue to seek M&A opportunities
that can accelerate delivery of our strategy and create long-term shareholder
value.
Embedding a high-performance culture
We have successfully implemented a decentralised organisational model to
enhance client centricity and increase ownership and accountability across the
business. We now have five geographically aligned divisions which have
dedicated product, technology and marketing resources to deliver more relevant
products, more quickly. We have also made changes to colleague performance
assessment and reward to foster a high-performance culture, and we are
bringing high-performing talent to IG to drive growth.
In the first half, we welcomed three new Executive Committee members,
including Clifford, as Group CFO, and Managing Directors for our UK and
Ireland and Institutional and Emerging Markets divisions. We have also added
senior product, marketing and digital servicing specialists who will bring
valuable, fresh perspectives to the business which are needed to drive growth.
We continue to assess colleagues to understand and close skills gaps.
I am encouraged by the positive impact these initiatives are having on
organisational effectiveness.
Taking initial steps to enhance efficiency
We have kicked-off workstreams to enhance efficiency and scalability in our
operations function, with an initial focus on client onboarding and servicing.
I am confident that these initiatives will lower our cost-to-serve, although
the benefits will take time to evidence.
Over the past 12-months, we have taken decisive action to exit initiatives not
delivering acceptable returns, including DailyFX, Spectrum and a legacy,
multi-year stock trading and investments project. Spectrum was established in
2019 to diversify our product offering in Europe and the Group has invested
significant resources and capital over the past five years attempting to scale
the business. It became clear to me that the momentum which had been hoped for
has not materialised quickly enough and performance has not been satisfactory.
We announced plans to close Spectrum in November and are making its products
available more cost efficiently over-the-counter. In H1 FY25 Spectrum
generated approximately £8 million revenue and had similar operating costs.
Outlook
We operate in large and growing addressable markets and macro-economic
uncertainty and volatility will continue to present our customers with trading
opportunities. The business has demonstrated an ability to capture cyclical
upside, we are making progress against our initial priorities and have lots
more work to do to drive sustainably stronger structural growth.
Current trading is satisfactory, and we remain confident of meeting FY25
consensus total revenue and adjusted profit before tax expectations.
Chief Financial Officer's statement
In my first report as Chief Financial Officer, I am pleased that the Group has
delivered a better performance relative to the prior year, albeit reflecting
more supportive market conditions. It is clear to me that IG has many
strengths, including solid positions in large and growing addressable markets,
geographically well diversified revenue, high margins and strong capital
generation. However, we are competing against many new and highly capable
players and there are many things we must improve to take market share.
We detailed our initial priorities in July 2024, and we are moving at pace to
deliver on these. As we do this, I am confident that we will compete more
effectively, increase active customers and build scale. That commercial growth
will translate into growth in earnings and ongoing capital returns.
Top line growth delivered in better cyclical market conditions
Total revenue exceeded the peaks of the pandemic at £522.5 million, as
volatility normalised to long-term averages from unusually low levels in the
prior year. OTC client income conversion for the half year was in line with
typical levels in a mid-70% range, but at the top end in Q1 and towards the
lower end in Q2.
Interest income was broadly flat as growth in customer cash balances offset
lower interest rates.
Performance in the period was a good demonstration of IG's ability to capture
cyclical upside, but our focus is on delivering sustainably stronger growth
from more diverse revenue streams.
Net trading revenue increased across all products, driven by higher revenue
per client, but active clients and new client acquisition, or first trades,
were flat. I am confident that the investments we are making in product and
marketing will result in stronger growth, but this will take time to evidence.
Costs well controlled
Operating costs declined 1% on prior year levels, driven by normalisation of
bad debt to £0.6 million from unusually elevated levels (H1 FY24: £10.5
million) and lower fixed remuneration due to efficiency measures initiated in
October 2023 which reduced average headcount by 10%. These savings enabled us
to offset investment in technology, including digitalisation of business
processes and relocation of our data centres.
We expect costs to be modestly higher in the second half reflecting the timing
of the provision we take for the UK Financial Services Compensation Scheme
(FSCS) levy, higher marketing costs, further investment in digitalisation to
enhance scalability and expenses associated with the acquisition of Freetrade.
Deploying our strong cash generation for shareholder returns and to accelerate
growth
In the first half of the year, we returned £281 million of capital to
shareholders via ordinary dividends and share buybacks, supported by strong
cash conversion and a robust balance sheet. Since the end of FY22, we have
returned over £1 billion to shareholders via ordinary dividends and share
buybacks and reduced our share count by 18%.
At the end of November 2024, we had £658 million of headroom over the Group
minimum regulatory capital requirement of £286 million, including a deduction
for the interim dividend declared today.
Following the acquisition of Freetrade, which we expect to close in mid-2025,
and the execution of the £50 million extension to our share buyback
programme, the Group capital position remains strong with indicative pro forma
headroom of £424 million. This is stated prior to capital generation from the
end of November 2024 and reflects a deduction from regulatory capital
resources of approximately £174 million associated with the transaction. This
deduction comprises of the £160 million enterprise value, in addition to
acquired cash, net debt items and other liquidity requirements, totalling
approximately £14 million. Indicative pro forma headroom includes modestly
higher estimated Group regulatory capital requirements resulting from the
acquisition of approximately £10 million.
Initial focus is on optimising capital allocation and growth
It is pleasing to see the strong first half performance, but I recognise this
was underpinned by supportive market conditions. Our focus is on accelerating
profitable growth by increasing active users and revenue to leverage our
platform. To do this, we must invest in our existing products and brands,
close product gaps and diversify revenue.
I am supportive of our existing capital allocation framework and intend to
review to see if it can be refined.
Today we announced that we are extending our share buyback programme by £50
million to £200 million. It is pleasing to show how we can both invest in
accretive growth and return capital at attractive equivalent rates of return
on our buyback, all whilst safeguarding our robust balance sheet.
Business Performance Review
The following analysis on the income statement is presented on an adjusted
basis, which excludes certain one-off items and recurring non-cash items.
Further detail on these adjustments and a reconciliation of alternative
performance measures used in this report is contained in the appendix.
Summary Group Income Statement
H1 FY25 adjusted H1 FY25 H1 FY24 adjusted H1 FY24 Change adjusted % Change %
£m
Net trading revenue 451.7 451.7 402.4 402.4 12% 12%
Net interest income 70.8 70.8 70.2 70.2 1% 1%
Total revenue 522.5 522.5 472.6 472.6 11% 11%
Betting duty and other operating income(1) 2.1 2.1 0.3 0.3
Net operating income 524.6 524.6 472.9 472.9 11% 11%
Total operating costs(1) (277.4) (294.9) (281.1) (310.4) (1%) (5%)
Operating profit 247.2 229.7 191.8 162.5 29% 41%
Other net losses (0.2) (0.2) (1.5) (1.5)
Net finance income 19.8 19.8 15.4 15.4
Profit before tax 266.8 249.3 205.7 176.4 30% 41%
Tax expense (65.6) (61.3) (50.9) (43.7) 29% 40%
Profit after tax 201.2 188.0 154.8 132.7 30% 42%
Weighted average number of shares for the calculation of EPS (millions) 363.9 363.9 397.6 397.6 (8%) (8%)
Basic earnings per share (pence) 55.3 51.7 38.9 33.4 42% 55%
(1) H1 FY25 adjusted operating costs exclude £17.5 million of recurring
non-cash items relating to the tastytrade acquisition. H1 FY24 adjusted
operating costs exclude £18.9 million of recurring non-cash items and £0.5
million of one-off costs relating to the tastytrade acquisition, and £9.9
million of one-off non-recurring costs related to the operational improvement
programme.
Total revenue
Total revenue consists of net trading revenue and net interest income. Total
revenue was £522.5 million in H1 FY25, increasing 11% on H1 FY24, reflecting
trading revenue up 12% and interest income up 1%.
Net trading revenue
Net trading revenue for the Group was £451.7 million, increasing 12% on H1
FY24. Volatility across a range of asset classes normalised to long-term
averages. This resulted in increased trading volumes and a higher average
revenue per client across all products and divisions.
Net trading revenue by product
Trading revenue (£m) Active clients (000)(1)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 360.4 327.7 10% 142.8 147.3 (3%)
Exchange-traded derivatives 78.0 63.6 23% 77.2 70.1 10%
Stock trading and investments 13.3 11.1 20% 85.1 89.1 (4%)
Total 451.7 402.4 12% 295.3 296.3 -
(1) Total Group active clients have been adjusted to remove the clients who
are active in more than one product category (multi-product clients) to give a
unique client count..
Revenue per client (£) First trades (000)(2)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 2,523 2,225 13% 17.5 20.7 (15%)
Exchange-traded derivatives 1,011 907 11% 15.0 10.7 40%
Stock trading and investments 157 125 25% 3.6 4.2 (14%)
Total Nm Nm Nm 33.9 33.8 -
(2) Total Group first trades have been adjusted to remove the clients who
traded in more than one product category to give a unique first trade count.
OTC derivatives trading revenue was £360.4 million, increasing 10% on H1 FY24
reflecting more supportive market conditions, particularly in Q1, resulting in
higher revenue per client. Revenue per client increased 13% offsetting a 3%
reduction in active clients.
Exchange-traded derivatives trading revenue was £78.0 million, up 23% on H1
FY24, with active clients increasing 10% and revenue per client increasing
11%.
Stock trading and investments trading revenue was £13.3 million, up 20% on H1
FY24, with active clients down 4%, offset by a 25% increase in average revenue
per client.
Net trading revenue by division
During the period the Group implemented a new decentralised operating model
with five geographically aligned divisions; UK and Ireland, APAC and Middle
East, United States, Europe and Institutional and Emerging Markets.
UK and Ireland
Trading revenue (£m) Active clients (000)(1)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 127.4 115.7 10% 41.7 43.8 (5%)
Exchange-traded derivatives 0.2 - Nm 0.9 - Nm
Stock trading and investments 10.7 9.3 15% 56.0 60.2 (7%)
Total 138.3 125.0 11% 92.5 97.7 (5%)
(1) Total UK and Ireland active clients have been adjusted to remove the
clients who are active in more than one product category (multi-product
clients) to give a unique client count.
Revenue per client (£) First trades (000)(2)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 3,056 2,640 16% 3.9 4.0 (3%)
Exchange-traded derivatives 269 - Nm 0.9 0.0 Nm
Stock trading and investments 190 154 24% 2.2 2.6 (15%)
Total Nm Nm Nm 5.7 5.8 (2%)
(2) Total Group first trades have been adjusted to remove the clients who
traded in more than one product category to give a unique first trade count.
In the UK and Ireland division, trading revenue increased 11% on H1 FY24 to
£138.3 million with OTC derivatives revenue increasing 10% and stock trading
and investments revenue increasing 15%.
In the period, the division launched futures and options trading, reported
within exchange-traded derivatives revenue, and this contributed £0.2m, with
900 new active clients onboarded in the period. Divisional revenue growth
reflected higher revenue per client, driven by more supportive market
conditions. Active clients for the division were down 5% overall, with first
trades down 2% on the prior period.
APAC and Middle East
Trading revenue (£m) Active clients (000)(1)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 129.2 122.2 6% 52.1 53.8 (3%)
Stock trading and investments 2.2 1.6 38% 28.2 28.0 1%
Total 131.4 123.8 6% 78.1 79.6 (2%)
(1) Total APAC and Middle East active clients have been adjusted to remove the
clients who are active in more than one product category (multi-product
clients) to give a unique client count.
Revenue per client (£) First trades (000)(2)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 2,479 2,270 9% 6.6 9.4 (29%)
Stock trading and investments 79 58 37% 1.4 1.5 (12%)
Total Nm Nm Nm 7.6 10.5 (28%)
(2) Total Group first trades have been adjusted to remove the clients who
traded in more than one product category to give a unique first trade count.
In the APAC and Middle East division, trading revenue increased 6% to £131.4
million, with OTC derivatives revenue up 6% and stock trading and investments
increasing 38%. OTC derivatives active clients decreased 3%, although this was
more than offset by 9% growth in revenue per client. Stock trading and
investments active clients were up slightly, with 37% growth in revenue per
client driving the overall increase in trading revenue. First trades in the
period were down 28% on H1 FY24.
United States (US)
Trading revenue (£m) Active clients (000)(1)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 7.3 7.3 0% 8.1 7.5 8%
Exchange-traded derivatives 70.0 58.2 20% 71.5 65.6 9%
Total 77.3 65.5 18% 79.5 73.1 9%
(1) Total US active clients have been adjusted to remove the clients who are
active in more than one product category (multi-product clients) to give a
unique client count.
Revenue per client (£) First trades (000)(2)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 912 981 (7%) 2.0 2.0 2%
Exchange-traded derivatives 979 888 10% 12.5 9.5 32%
Total Nm Nm Nm 14.5 11.5 27%
(2) Total Group first trades have been adjusted to remove the clients who
traded in more than one product category to give a unique first trade count.
In the US division, trading revenue of £77.3 million increased 18%, driven by
growth in exchange-traded derivatives revenue from tastytrade, which increased
20% on H1 FY24. In US Dollars, trading revenue increased 24%, reflecting 9%
growth in active clients and 10% growth in revenue per client. OTC
derivatives trading revenue was in line with H1 FY24 with active clients
increasing 8%, and revenue per client down 7%. First trades in the division
increased 27% on H1 FY24.
Europe
Trading revenue (£m) Active clients (000)(1)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 55.4 48.1 15% 28.2 29.1 (3%)
Exchange-traded derivatives 7.7 5.4 45% 4.8 4.5 5%
Total 63.1 53.5 18% 31.8 32.2 (1%)
(1) Total Europe active clients have been adjusted to remove the clients who
are active in more than one product category (multi-product clients) to give a
unique client count.
Revenue per client (£) First trades (000)(2)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 1,961 1,656 18% 3.3 3.5 (7%)
Exchange-traded derivatives 1,628 1,180 38% 1.6 1.2 28%
Total Nm Nm Nm 4.4 4.2 6%
(2) Total Group first trades have been adjusted to remove the clients who
traded in more than one product category to give a unique first trade count.
In the Europe division, trading revenue increased 18% to £63.1 million,
reflecting 15% growth in OTC derivatives revenue and 45% growth in
exchange-traded derivatives revenue from turbo products, which will be
transitioned to an OTC offering in the second half of the financial year. OTC
derivatives active clients declined 3% but revenue per client increased 18%
reflecting more supportive market conditions. Exchange-traded derivatives
active clients increased 5% and revenue per client increased by 38%. First
trades for the division increased by 6% on H1 FY24.
Institutional and Emerging Markets
Trading revenue (£m) Active clients (000)(1)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 41.1 34.4 20% 12.8 13.1 (3%)
Exchange-traded derivatives 0.1 0.0 Nm 0.0 0.0 Nm
Stock trading and investments 0.4 0.2 89% 0.9 0.8 4%
Total 41.6 34.6 20% 13.5 13.8 (2%)
(1) Total Institutional and Emerging Markets active clients have been adjusted
to remove the clients who are active in more than one product category
(multi-product clients) to give a unique client count.
Revenue per client (£) First trades (000)(2)
H1 FY25 H1 FY24 Change % H1 FY25 H1 FY24 Change %
OTC derivatives 3,222 2,618 23% 1.7 1.9 (8%)
Exchange-traded derivatives 2,000 1,296 54% 0.0 0.0 Nm
Stock trading and investments 498 273 82% 0.1 0.0 23%
Total Nm Nm Nm 1.8 1.9 (8%)
(2) Total Group first trades have been adjusted to remove the clients who
traded in more than one product category to give a unique first trade count.
In the Institutional and Emerging Markets division, trading revenue increased
by 20%, with almost all of the revenue coming from OTC derivatives. Active
clients reduced by 3%, offset by a 23% increase in revenue per client. First
trades in the period reduced 8% on H1 FY24.
Net interest income
Net interest income is driven by client balances that are held off the Group
balance sheet. Net interest income on client balances in H1 FY25 was £70.8
million, up 1% on the H1 FY24 total of £70.2 million. Interest income
represented 14% of total revenue, down from 15% in H1 FY24, reflecting higher
net trading revenue.
In the US division, client cash balances held off balance sheet at the end of
the period were $2.1 billion (H1 FY24: $1.9 billion). This contributed £36.0
million of interest income (H1 FY24: £37.3 million).
Outside the US, client cash balances held off balance sheet at the end of the
period were £2.2 billion (H1 FY24: £2.1 billion). This contributed £34.8
million of interest income (H1 FY24: £32.9 million).
Adjusted operating costs
Adjusted operating costs for H1 FY25 were £277.4 million, 1% lower than H1
FY24.
In H1 FY24 adjusted operating costs excluded £29.3 million, which reflected
amortisation of intangibles of £16.2 million relating to the tastytrade
acquisition, £2.7 million in retention awards associated with the
transaction, £0.5 million of non-recurring tastytrade integration costs, and
£9.9 million of one-off costs relating to the operational improvement
programme announced in October 2023.
In H1 FY25 our approach to cost adjustments was reviewed, and as a result we
have not made any adjustments in the period for one-off restructuring costs.
Costs incurred in the period, including the costs of the Spectrum closure,
have been included as BAU costs. H1 FY25 adjustments to operating costs only
included ongoing non-cash costs in relation to the tastytrade acquisition,
which totalled £17.5 million and included £15.2m of amortisation of the
tastytrade intangible, and £2.2m related to retention awards.
Adjusted operating costs
£m H1 FY25 H1 FY24 Change %
Fixed remuneration 95.4 100.2 (5%)
Advertising and marketing 42.2 43.8 (4%)
Revenue related costs 23.0 30.6 (25%)
IT, structural market data and communications 28.6 23.8 20%
Depreciation and amortisation 16.1 17.7 (9%)
Legal and professional 16.5 14.2 16%
Other costs 23.0 25.7 (11%)
Variable remuneration 32.6 25.1 30%
Total adjusted operating costs(1) 277.4 281.1 (1%)
Headcount - average 2,489 2,754 (10%)
Headcount - year end 2,440 2,747 (11%)
(1)H1 FY25 adjusted operating costs exclude £17.5 million of recurring
non-cash items relating to the tastytrade acquisition. H1 FY24 adjusted
operating costs exclude £18.9 million of recurring non-cash items and £0.5
million of one off costs relating to the tastytrade acquisition, and £9.9
million of one off non-recurring costs related to the operational improvement
programme.
Fixed remuneration was £95.4 million, down 5% on H1 FY24. This reflects the
reduction in headcount across the period, reflecting the operational
improvement programme announced in October 2023, offset with some one-off
restructuring costs, and a reduction in the capitalisation of salary costs.
Advertising and marketing spend in the year was £42.2 million, reducing 4% on
H1 FY24 as savings were realised by more targeted resource allocation
enhancing marketing return on investment.
Revenue related costs include market data charges, client payment charges,
provisions for client and counterparty credit losses and brokerage trading
fees. Revenue related costs in total decreased by 25% to £23.0 million (H1
FY24: £30.6 million), reflecting normalisation in client and counterparty
credit losses, following a significant charge in H1 FY24 (H1 FY25: £0.6
million, H1 FY24: £10.5 million). Credit card and brokerage trading costs
increased year-on-year, reflecting higher levels of client activity.
IT maintenance, structural market data charges, and communications costs were
£28.6 million, increasing 20% on H1 FY24, reflecting investment in
digitalisation of business processes and relocation of our data centres.
Market data costs increased driven by higher usage and inflationary pressures.
Depreciation and amortisation was £16.1m, reducing by 9%, reflecting the
reduction in the amortisation run rate as the remaining value of the DailyFX
domain name was impaired at FY24 year end. This figure also includes a £3.2m
impairment of intangible assets related to the exit from Spectrum.
Legal and professional fees were £16.5 million, an increase of 16%,
reflecting higher costs in relation to strategic and operational projects
including £1.8m in relating to the acquisition of Freetrade.
Other costs, which include travel and entertainment, regulatory fees and
irrecoverable VAT, dropped 11% to £23.0 million, reflecting a reduction in
irrecoverable VAT, premises costs, and lower staff-related costs.
Variable remuneration of £32.6 million includes the general bonus accrual,
share schemes and sales bonuses. The charge for the general bonus pool was
£18.6 million, up 67% reflecting the Group's performance against internal
targets relative to the comparative period. Share scheme costs, which relate
to long-term incentive plans for senior management, increased by 5% to £11.4
million (H1 FY24: £10.9 million) including one-off acceleration of charges
for outgoing executives' share awards.
Net finance income
Net finance income in the period was £19.8 million, up 28% on H1 FY24. Within
this, finance income was £33.6 million (H1 FY24: £26.1 million), partly
offset by finance costs of £13.8 million (H1 FY24: £10.7 million).
Finance costs are largely fixed, but include interest paid on client cash
deposits held on balance sheet which increased by £3.0 million. Finance
income reflects the interest earned on corporate cash balances and client
funds that are held on balance sheet. Client funds held on balance sheet
increased 20% to £490.1 million (H1 FY24: £410.2 million).
Taxation
The effective tax rate (ETR) applied to the Group's H1 FY25 profit is 24.6%
(FY24: 23.2%). The increase in the H1 FY25 ETR is mainly due to the tax
implications of the Spectrum closure and the UK banking surcharge of 3% on IG
Markets taxable profit exceeding £100m. The ETR is dependent on a mix of
factors including taxable profit by geography, the availability and use of tax
incentives and tax losses.
The OECD Pillar 2 global minimum tax rules came into force for the Group from
1 June 2024. The tax footprint of the Group is such that the Pillar 2 rules
are not expected to have a material impact on the Group's tax charge as there
is currently insignificant activity in low tax jurisdictions.
Earnings per share
£m (unless stated) H1 FY25 adjusted H1 FY25 H1 FY24 adjusted H1 FY24 Adjusted change % Change %
Profit before tax 266.8 249.3 205.7 176.4 30% 41%
Tax expense (65.6) (61.3) (50.9) (43.7) 29% 40%
Profit after tax for the period 201.2 188.0 154.8 132.7 30% 42%
Weighted average number of shares for the calculation of EPS (millions) 363.9 363.9 397.6 397.6 (8%) (8%)
Basic earnings per share (pence) 55.3 51.7 38.9 33.4 42% 55%
Basic earnings per share increased to 55.3 pence (H1 FY24: 38.9 pence) on an
adjusted basis. This was due to an increase in adjusted profit after tax of
30% and lower weighted average number of shares, reducing from 397.6 million
shares in H1 FY24 to 363.9 million shares in H1 FY25, as a result of share
buybacks.
Return of shareholder funds
The proposed interim dividend of 13.86 pence per share was approved by the
Board on 22 January 2025 and has not been included as a liability as at 30
November 2024. This dividend, totalling approximately £49.1 million, will be
paid on 3 March 2025 to those members on the register at the close of business
on 31 January 2025.
During H1 FY25, the Group has repurchased 17,667,560 shares, for total
consideration of £167.2 million (including related costs of £4.1
million). On 22 January 2025, the Board approved the extension of share
buyback programme by a further £50 million to a total of £200 million which
is expected to be completed in H2 FY25.
Summary Group balance sheet
The Group continues to operate with a strong and liquid balance sheet, with
net assets as at 30 November 2024 of £1,795.2 million (31 May 2024: £1,889.5
million). The balance sheet is presented on a management basis which reflects
the Group's use of alternative performance measures to monitor its financial
position. A reconciliation of these alternative performance measures to the
corresponding UK-adopted International Accounting Standards balances is
presented in the appendix.
£m 30 Nov 2024 31 May 2024 Change %
Goodwill 599.1 599.0 -
Intangible assets 195.5 216.6 (10%)
Property, plant and equipment(1) 16.5 20.3 (19%)
Operating lease net liabilities (1.7) (2.3) (26%)
Other investments 0.6 1.8 (67%)
Investments in associates 9.7 9.9 (2%)
Fixed assets 819.7 845.3 (3%)
Cash(2) 882.5 912.3 (3%)
Net amounts due from brokers 863.7 783.1 10%
Own funds in client money 20.6 47.3 (56%)
Financial investments 75.4 115.7 (35%)
Liquid assets 1,842.2 1,858.4 (1%)
Issued debt (299.5) (299.5) -
Client funds held on balance sheet (490.1) (430.5) 14%
Turbo warrants (4.5) (4.5) -
Own funds 1,048.1 1,123.9 (7%)
Working capital (44.4) (55.2) (20%)
Net tax (payable)/receivable (1.7) 2.2 (177%)
Net deferred income tax liability (26.5) (26.7) (1%)
Net assets 1,795.2 1,889.5 (5%)
(1) Excludes right-of-use assets
(2) As per the Consolidated Statement of Cash Flow
The majority of the Group's Fixed assets are held in US Dollars, including
goodwill of £497.2 million attributed to the tastytrade business. Fixed
assets carrying value reduced by £25.6 million in the period mainly due to
the amortisation of intangibles recognised from the tastytrade acquisition.
The Group measures the strength of its liquidity using an own funds measure
rather than cash. Own funds is a combination of assets held by the Group which
can be (or already are) deployed to meet its liquidity requirements, less
restricted cash or amounts payable to clients. The liquidity requirements
include broker margin, regulatory liquidity and working capital needs of its
subsidiaries, and the funding of adequate buffers in segregated client money
accounts. This broader measure is a more stable metric to assess the Group's
liquidity position in meeting its day-to-day liquidity requirements, and a
measure of liquidity net of client funds on balance sheet, which are repayable
on demand, and issued debt.
The Group continues to be highly cash generative, with £240.6 million (H1
FY24: £70.9 million) generated from operations. Own funds decreased by £75.8
million during H1 FY25 due to a £16.2 million decrease in liquid assets and a
£59.6 million increase in client funds. The ongoing share buyback continues
to be a key driver in the reduction of the own funds balance, including a
payment of £167.0 million (H1 FY24: £149.7 million) to acquire shares in the
period.
£m H1 FY25 H1 FY24
Own funds generated from operations 262.5 183.8
As a percentage of operating profit 114% 113%
Income taxes paid (59.4) (66.4)
Net own funds generated from operations 203.1 117.4
Net own funds generated from investing activities 13.5 2.3
Purchase of own shares held in Employee Benefit Trust (9.5) (13.3)
Payments made for share buyback (167.0) (149.7)
Equity dividends paid to owners of the parent (117.9) (126.7)
Net own funds used in financing activities (294.4) (289.7)
Decrease in own funds (77.8) (170.0)
Own funds at the start of the period 1,123.9 1,207.3
Decrease in own funds (77.8) (170.0)
Impact of movement in foreign exchange rates 2.0 (1.1)
Own funds at the end of the period 1,048.1 1,036.2
Liquidity
The Group maintains a strong liquidity position, ensuring sufficient liquidity
under both normal circumstances and stressed conditions to meet its liquidity
requirements.
£m 30 Nov 2024 31 May 2024 Change %
Liquid assets 1,842.2 1,858.4 (1%)
Broker margin requirement (763.7) (677.7) 13%
Cash balances in non-UK subsidiaries (372.4) (381.1) (2%)
Own funds in client money (20.6) (47.3) (56%)
Available liquidity 685.5 752.3 (9%)
Available liquidity is a measure of liquid assets that are not yet deployed to
meet liquidity requirements and that are available at short notice. This
available liquidity is typically used to meet broker margin increases and to
repay client funds on balance sheet, which are repayable on demand.
The Group optimises its liquidity position by centralising funds within the
UK, where the majority of market risk resides. This ensures sufficient
liquidity to be deployed appropriately as required. The Group continually
reviews and optimises the return on deploying this liquidity, through fixed
income instruments, money market funds and bank deposits. Significant time has
been invested into developing strong banking relationships to ensure
competitive interest on bank deposits.
The Group's available liquidity is supported by its strong and diverse funding
profile. Title transfer arrangements provide £384.3 million (31 May 2024:
£328.7 million) of liquidity which the Group partially uses to meet its
broker margin requirements. The Group has a £400.0 million revolving credit
facility, which was undrawn as of 30 November 2024 and a £250.0 million
committed repo facility providing the ability to quickly and efficiently
convert financial investments into cash.
The Group's funding profile is further supported by its £1.0 billion EMTN
programme, from which it has £300.0 million notes in issue, maturing November
2028. The Group maintains an active dialogue with a variety of debt
stakeholders, leading to its long-term credit rating from Fitch being upgraded
to BBB in August 2024.
In addition to the cash recognised on the balance sheet, as at 30 November
2024, the Group held £2,213.8 million (31 May 2024: £2,282.6 million) of
client money in segregated bank accounts which are held separately from the
Group's own cash balances. Segregated client money is excluded from both the
Group's balance sheet and liquid assets as the Group does not have control
over these balances. For client money balances in the US, £1,623.5 million
(31 May 2024 : £1,511.6 million) is held by clearing brokers. The Group is
also exposed to the risk associated with customers failing to discharge their
contractual obligations with the clearing brokers.
Regulatory capital
The Group is supervised on a consolidated basis by the UK's Financial Conduct
Authority (FCA), which requires it to hold sufficient regulatory capital at
both Group and in its UK regulated entities to cover risk exposures. The main
factors which drive the Group's regulatory capital requirements are market,
credit and operational risks. Credit risks include potential client debts in
the event of a sudden market move as well as exposure to hedging
counterparties and banking counterparties (for firm and client money) should
one or more of them default. Operational risk covers a wide range of potential
severe events, from a ransomware attack to a manual error when entering a
trade on the dealing system. Market risk is volatile in nature since the Group
is hedging high volumes of trades from clients around the world and positions
are changing minute by minute.
The Group is required to notify the FCA if it is operating within close range
of its regulatory capital thresholds, and it may choose to take actions to
restore capital levels or to reduce capital requirements if it is close to
these thresholds. The Group also has regulated entities in overseas
jurisdictions which are subject to the rules set by other regulators. These
regulations are calculated on a different basis to the FCA regulations and may
result in incremental capital requirements or the holding of additional
buffers.
The Group's regulatory capital resources, which totalled £944.4 million at 30
November 2024 (31 May 2024: £936.9 million) are an adjusted measure of
shareholders' funds. Shareholders' funds comprise share capital, share
premium, retained earnings, translation reserve, merger reserve and other
reserves.
The Group's regulatory capital requirement as at 30 November 2024 was £286.0
million (31 May 2024: £298.6 million). The Group's capital headroom, once
interim profits have been approved for use by the FCA, will be £658.4 million
(31 May 2024: £638.3 million), demonstrating the Group's solid capital base.
£m 30 Nov 2024 31 May 2024
Shareholders' funds 1,795.2 1,889.5
Less foreseeable / declared dividends (49.1) (118.0)
Less remaining share buyback (18.0) (29.7)
Less goodwill and intangible assets (749.3) (767.3)
Less deferred tax assets (22.7) (24.6)
Less significant investments in financial sector entities (10.3) (11.7)
Less value adjustment for prudent valuation (1.4) (1.3)
Regulatory capital resources 944.4 936.9
Total requirement 286.0 298.6
Headroom above minimum capital requirement 658.4 638.3
Having assessed regulatory capital headroom and alternative uses of capital,
on 22 January 2025, the Board approved an extension of £50.0 million to the
existing share buyback programme which will be completed in H2 FY25.
Consolidated Interim Income Statement
for the six months ended 30 November 2024 (unaudited)
Unaudited Unaudited
six months ended six months ended
30 November 2024 30 November 2023
Note £m £m
Trading revenue 455.1 406.4
Introducing partner commissions (3.4) (4.0)
Net trading revenue 3 451.7 402.4
Betting duty and financial transaction taxes (1.5) (3.2)
Interest income on client funds 73.8 71.2
Interest expense on client funds (3.0) (1.0)
Other operating income 3.6 3.5
Net operating income 524.6 472.9
Operating costs 4 (294.2) (299.9)
Net credit losses on financial assets 20 (0.7) (10.5)
Operating profit 229.7 162.5
Finance income 33.6 26.1
Finance costs (13.8) (10.7)
Share of loss after tax from associates (0.2) (1.5)
Profit before tax 249.3 176.4
Tax expense 5 (61.3) (43.7)
Profit for the period attributable to owners of the parent 188.0 132.7
Earnings per ordinary share
Basic 6 51.7p 33.4p
Diluted 6 51.1p 33.1p
Consolidated Interim Statement of Comprehensive Income
for the six months ended 30 November 2024 (unaudited)
Unaudited Unaudited
six months ended six months ended
30 November 2024 30 November 2023
£m £m £m £m
Profit for the period 188.0 132.7
Other comprehensive income:
Items that may be subsequently reclassified to the Consolidated Income
Statement:
Debt instruments at fair value through other comprehensive income: 4.0 5.3
- fair value gain, net of tax
Foreign currency translation gain/(loss) 0.2 (10.9)
Other comprehensive income/(loss) for the period, net of tax 4.2 (5.6)
Total comprehensive income for the period 192.2 127.1
Consolidated Interim Statement of Financial Position
at 30 November 2024 (unaudited)
Unaudited Unaudited
30 November 2024 31 May 2024 30 November 2023
Note £m £m £m
Assets
Non-current assets
Goodwill 8 599.1 599.0 603.7
Intangible assets 9 195.5 216.6 252.2
Property, plant and equipment 37.4 41.8 38.9
Financial investments 10 304.7 351.4 477.1
Investment in associates 9.7 9.9 10.9
Other investments 0.6 1.8 1.2
Prepayments 5.5 5.4 -
Deferred tax assets 22.7 24.6 22.4
1,175.2 1,250.5 1,406.4
Current assets
Cash and cash equivalents 11 886.9 983.2 586.7
Trade receivables 12 444.8 508.3 556.6
Financial investments 10 164.5 109.3 138.4
Other assets 13 65.5 36.6 24.9
Prepayments 21.8 27.4 24.8
Other receivables 13.4 15.3 11.6
Income tax receivable 0.7 10.3 27.6
1,597.6 1,690.4 1,370.6
TOTAL ASSETS 2,772.8 2,940.9 2,777.0
Liabilities
Non-current liabilities
Debt securities in issue 14 298.3 298.1 297.9
Other payables - 1.3 1.2
Lease liabilities 15.5 15.1 13.9
Deferred tax liabilities 49.2 51.3 53.9
363.0 365.8 366.9
Current liabilities
Trade payables 15 511.9 493.3 431.2
Other payables 93.2 175.5 100.0
Lease liabilities 7.1 8.7 8.0
Income tax payable 2.4 8.1 9.4
614.6 685.6 548.6
TOTAL LIABILITIES 977.6 1,051.4 915.5
Equity
Share capital and share premium 16 125.8 125.8 125.8
Translation reserve 98.4 98.2 109.9
Merger reserve 590.0 590.0 590.0
Other reserves (27.3) (22.9) (26.6)
Retained earnings 1,008.3 1,098.4 1,062.4
TOTAL EQUITY 1,795.2 1,889.5 1,861.5
TOTAL EQUITY AND LIABILITIES 2,772.8 2,940.9 2,777.0
The Consolidated Interim Condensed Financial Statements were approved by the
Board of Directors on 22 January 2025 and signed on its behalf by:
Clifford Abrahams
Chief Financial Officer
Registered Company number: 04677092
Consolidated Interim Statement of Changes in Equity
for the six months ended 30 November 2024 (unaudited)
Share capital Share premium Translation reserve Merger reserve Other reserves Retained earnings Total
£m £m £m £m £m £m £m
At 1 June 2023 - 125.8 120.8 590.0 (16.9) 1,194.9 2,014.6
Profit for the period and attributable to owners of the parent - - - - - 132.7 132.7
Other comprehensive income/(loss) for the period - - (10.9) - 5.3 - (5.6)
Total comprehensive income for the period - - (10.9) - 5.3 132.7 127.1
Equity dividends paid - - - - - (126.7) (126.7)
Movement due to share buyback - - - - (1.0) (149.9) (150.9)
Employee Benefit Trust purchase of own shares - - - - (13.3) - (13.3)
Transfer of vested awards from the share-based payment reserve - - - - (11.4) 11.4 -
Equity-settled employee share-based payments - - - - 10.7 - 10.7
At 30 November 2023 (unaudited) - 125.8 109.9 590.0 (26.6) 1,062.4 1,861.5
At 1 June 2024 - 125.8 98.2 590.0 (22.9) 1,098.4 1,889.5
Profit for the period and attributable to owners of the parent - - - - - 188.0 188.0
Other comprehensive income for the period - - 0.2 - 4.0 - 4.2
Total comprehensive income for the period - - 0.2 - 4.0 188.0 192.2
Tax recognised directly in equity on share-based payments - - - - - (1.1) (1.1)
Equity dividends paid - - - - - (117.9) (117.9)
Movement due to share buyback - - - - 1.3 (167.2) (165.9)
Employee Benefit Trust purchase of own shares - - - - (9.5) - (9.5)
Transfer of vested awards from the share-based payment reserve - - - - (8.1) 8.1 -
Equity-settled employee share-based payments - - - - 7.9 - 7.9
At 30 November 2024 (unaudited) - 125.8 98.4 590.0 (27.3) 1,008.3 1,795.2
( )
( )
( )
Consolidated Interim Statement of Cash Flows
for the six months ended 30 November 2024
(unaudited)
Unaudited Unaudited
six months ended six months ended
30 November 2024 30 November 2023
Restated(1)
Note £m £m
Operating activities
Operating profit 229.7 162.5
Depreciation and amortisation 28.2 32.9
Impairment, write off and loss on disposal of assets 3.2 1.0
Interest received on client funds (73.8) (71.2)
Interest expense on client funds 3.0 1.0
Equity settled share-based payments charge 7.9 10.7
Decrease in trade receivables, other receivables and other assets 40.0 5.1
Increase/(decrease) in trade and other payables 2.4 (71.1)
Cash generated from operations 240.6 70.9
Interest received on client funds 74.3 69.2
Interest paid on client funds (3.1) (0.8)
Income taxes paid (59.4) (66.4)
Net cash flows generated from operating activities 252.4 72.9
Investing activities
Interest received 29.7 23.0
Purchase of property, plant and equipment (3.2) (7.4)
Payments to acquire and develop intangible assets (0.3) (3.4)
Proceeds from sale of financial investments - 90.8
Payments to purchase financial investments - (89.8)
Proceeds from sale of property, plant and equipment 0.1 -
Net cash flows generated from investing activities 26.3 13.2
Financing activities
Interest paid (11.4) (8.0)
Financing fees paid (1.4) (1.9)
Interest paid on lease liabilities (0.6) (0.4)
Repayment of principal element of lease liabilities (3.5) (3.3)
Payments made for share buyback (167.0) (149.7)
Equity dividends paid to owners of the parent 7 (117.9) (126.7)
Employee Benefit Trust purchase of own shares (9.5) (13.3)
Net cash flows used in financing activities (311.3) (303.3)
Net decrease in cash and cash equivalents (32.6) (217.2)
Cash and cash equivalents at the beginning of the period 11 912.3 795.2
Impact of movement in foreign exchange rates 2.8 (0.9)
Cash and cash equivalents at the end of the period 11 882.5 577.1
(1) Refer note 1(e) for further information.
Notes to the Consolidated Interim Condensed Financial Statements
for the six months ended 30 November 2024 (unaudited)
1. General Information and basis of preparation
General Information
The Consolidated Interim Condensed Financial Statements of IG Group Holdings
plc and its subsidiaries (together 'the Group') for the six months ended 30
November 2024 were authorised for issue by the Board on 22 January 2025. IG
Group Holdings plc is a public company limited by shares, which is listed on
the London Stock Exchange and incorporated and domiciled in England and Wales.
The address of the registered office is Cannon Bridge House, 25 Dowgate Hill,
London, EC4R 2YA.
The interim financial information for the six months ended 30 November 2024,
together with the comparative information contained in this report, does not
constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. The interim financial information is unaudited but has
been reviewed by the Group's auditors, PricewaterhouseCoopers LLP, and their
report is included at the end of these Consolidated Interim Condensed
Financial Statements. The Financial Statements for the year ended 31 May 2024
(FY24 Financial Statements) have been audited and reported on by the Group's
auditors and delivered to the Registrar of Companies. The auditors report on
the FY24 Financial Statements was unqualified, did not include a reference to
any matters to which they drew attention by way of emphasis without qualifying
its report and did not contain a statement under section 498(2) or (3) of the
Companies Act 2006.
Basis of preparation
(a) Compliance with UK-adopted International accounting standards
The Consolidated Interim Condensed Financial Statements for the six months
ended 30 November 2024 have been prepared in accordance with the Disclosure
Guidance and Transparency Rules (DTR) sourcebook of the United Kingdom's
Financial Conduct Authority and in accordance with UK-adopted International
Accounting Standard 34 - Interim Financial Reporting. The Consolidated Interim
Condensed Financial Statements are presented in Sterling.
The Consolidated Interim Condensed Financial Statements do not include all the
information and disclosures required in the FY24 Financial Statements and
should be read in conjunction with the Group's Annual Report for the year
ended 31 May 2024 (FY24 Annual Report) which has been prepared in accordance
with the UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
Throughout this report, H1 FY25 refers to the six months ended 30 November
2024 FY24 refers to the financial years ended 31 May 2024 and H1 FY24 refers
to the six months ended 30 November 2023.
(b) New accounting standards and interpretations
The IASB has published a number of amendments to accounting standards that are
effective for annual reporting periods beginning on or after 1 January 2024.
These include amendments published to IFRS 7 - Financial Instruments:
Disclosures, IFRS 16 - Leases, IAS 1 - Presentation of Financial Statements,
IAS 7 - Statement of Cash Flows, IAS12 - Income Taxes and IAS 21 - The Effects
of Changes in Foreign Exchange Rates. The Group has assessed the impact of
these amendments and has determined there to be insignificant impact on the
Consolidated Interim Condensed Financial Statements.
The Group has not early adopted any standard, interpretation or amendment that
has been issued but is not yet effective.
(c) Critical accounting estimates and judgements
The preparation of interim financial statements required management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the amounts reported for assets and liabilities as at
the reporting date, and the amounts reported for revenue and expenses during
the period. The nature of judgements and estimates means that actual outcomes
could differ from those estimates.
In the Directors' opinion, there are no accounting estimates or judgments that
have a material impact on the presentation or measurement of items recorded in
the Consolidated Interim Condensed Financial Statements, except for the
judgement below:
Assessment of impairment indicators of the US Cash Generating Unit (CGU) - A
review has been performed to consider whether indicators of impairment are
present as at 30 November 2024 for the US CGU, taking into account both
internal and external factors which are outlined in note 8. The judgement that
there were no impairment indicators present means that no formal impairment
test has been performed. The Group disclosed a critical accounting estimate
relating to the recoverable amount of the US CGU in the FY24 Financial
Statements and concluded that the recoverable amount was not sensitive to
reasonably possible change to assumptions.
(d) Going concern basis of accounting
The Directors have prepared the Consolidated Interim Condensed Financial
Statements on a going concern basis which requires the Directors to have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for a period of at least 12 months from the date of
approval of the Consolidated Interim Condensed Financial Statements.
The Group meets its day-to-day working capital requirements through its
available liquid assets and debt facilities. The Group's liquid assets exclude
all monies held in segregated client money accounts. In assessing whether it
is appropriate to adopt the going concern basis in preparing the Consolidated
Interim Condensed Financial Statements, the Directors have considered the
resilience of the Group, taking account of its liquidity position and cash
generation, the adequacy of capital resources, the availability of external
credit facilities and the associated financial covenants, and stress-testing
of liquidity and capital adequacy that considers the principal risks faced by
the business. The principal risks and uncertainties which may affect the Group
in the second half of the financial year remain consistent with those
disclosed in the FY24 Annual Report.
The Directors' assessment has considered future performance, solvency and
liquidity over a period of at least 12 months from the date of approval of the
Consolidated Interim Condensed Financial Statements. The Board, following the
review by the Audit Committee, has a reasonable expectation that the Group has
adequate resources for that period, and confirms that they consider it
appropriate to adopt the going concern basis in preparing the Consolidated
Interim Condensed Financial Statements.
1. General Information and basis of preparation (continued)
(e) Reclassification of comparatives
In the prior period, proceeds from sales and payments for purchases of
financial investments were shown on a net basis. In the current period, these
are presented as separate line items in the Consolidated Statement of Cash
Flows to comply with IAS 7. There were no transactions in the current period,
comparative figures have been adjusted for consistency, showing proceeds of
£90.8 million and purchases of £89.8 million for the period ended 30
November 2023.
(f) Seasonality of operations
The Directors consider that there is no predictable seasonality to the Group's
operations.
2. Material accounting policies
The accounting policies adopted in the preparation of the Consolidated Interim
Condensed Financial Statements are consistent with those followed in the
preparation of the FY24 Financial Statements.
3. Segmental analysis
The Group's reportable segments are based the information reviewed regularly
by the Group's Chief Operating Decision Maker (CODM), identified as Executive
Directors, for resource allocation and performance assessment.
The Group manages market risk and a number of other activities on a Group-wide
portfolio basis and accordingly a large proportion of costs are incurred
centrally. These costs are not allocated to individual segments for
decision-making purposes for the CODM, and, accordingly, these costs have not
been allocated to segments. Additionally, the Group's assets and liabilities
are not allocated to individual segments and are not reported as such for
decision making purposes. Therefore, the segmental analysis does not include a
measure of profitability, nor a complete segmented balance sheet, as this does
not reflect information received by the CODM on a regular basis. The Group
continues to evaluate and consider the most appropriate metrics to measure
performance of divisions in future reviews to provide a more comprehensive
performance assessment.
In prior years, the Group reported an alternative performance measure of total
revenue, comprising trading revenue and interest income, split by product. In
July 2024, the Group restructured to create separate decentralised divisions,
enhancing agility and responsiveness of the business to respond to local
client needs. Consequently, the information presented to the CODM during H1
FY25 was revised to better assess the performance of the Group by division,
increasing ownership and accountability. The CODM continues to be presented
with, on a regular basis total revenue split by product, with an additional
split by division. The divisions comprise UK and Ireland, US, APAC & ME,
Europe (including Switzerland) and Institutional & Emerging Markets (EM).
Operating Segments
UK & Ireland US APAC & ME Europe Institutional & EM Total
30 November 2024 (unaudited) £m £m £m £m £m £m
OTC derivatives 127.4 7.3 129.2 55.4 41.1 360.4
Exchange-traded derivatives 0.2 70.0 - 7.7 0.1 78.0
Stock trading and investments 10.7 - 2.2 - 0.4 13.3
Segmental net trading revenue 138.3 77.3 131.4 63.1 41.6 451.7
Net interest on client money 21.9 36.0 6.9 3.0 3.0 70.8
Segmental total revenue 160.2 113.3 138.3 66.1 44.6 522.5
UK & Ireland US APAC & ME Europe Institutional & EM Total
30 November 2023 (unaudited) £m £m £m £m £m £m
OTC derivatives 115.7 7.3 122.2 48.1 34.4 327.7
Exchange-traded derivatives - 58.2 - 5.4 - 63.6
Stock trading and investments 9.3 - 1.6 - 0.2 11.1
Segmental net trading revenue 125.0 65.5 123.8 53.5 34.6 402.4
Net interest on client money 23.8 37.3 6.9 0.8 1.4 70.2
Segmental total revenue 148.8 102.8 130.7 54.3 36.0 472.6
3. Segmental analysis (continued)
The geographical split reflects the location of the office that manages the
underlying client relationships. Institutional clients have been allocated to
the appropriate geographies in the following presentation.
Unaudited Unaudited
six months ended six months ended
30 November 2024 30 November 2023 Restated
£m £m
Net trading revenue by geography:
Australia 40.1 43.6
Japan 43.8 38.9
Singapore 38.1 35.1
Dubai 12.8 8.4
APAC & ME 134.8 126.0
Emerging Markets 25.1 20.8
UK & Ireland 146.8 132.7
US 77.4 65.7
Europe 67.6 57.2
Net trading revenue 451.7 402.4
Net interest on client funds - US 36.0 37.3
Net interest on client funds - Other 34.8 32.9
Total revenue 522.5 472.6
The Group does not derive more than 10% of revenue from any one single client.
The Group has reclassified the geographical classification to align with the
new divisional structure. EMEA Non-EU is no longer used with the following
resulting changes; Switzerland is now included in Europe, £10.7 million (30
November 2023: £10.0 million), Dubai is now included in APAC & ME, £12.8
million (30 November 2023: £8.4 million) and South Africa is now included in
Emerging Markets, £4.4 million (30 November 2023: £2.9 million).
Accordingly, the prior period comparative balance for 30 November 2023 has
been restated to reflect this classification.
The segmental breakdown of non-current assets excluding financial investments,
other investments as collateral and deferred income tax assets, based on
geography is as follows:
Unaudited 31 May 2024 Restated Unaudited
six months ended six months ended
30 November 2024 30 November 2023 Restated
£m £m £m
US 699.5 716.5 740.6
UK & Ireland 126.2 133.3 147.7
Europe 10.4 12.0 7.4
APAC & ME 8.7 8.5 7.6
Emerging Markets 2.4 2.4 2.4
Total non-current assets 847.2 872.7 905.7
The Group has reclassified the geographical classification to align with the
new divisional structure. EMEA Non-EU is no longer used with the following
resulting changes; Switzerland is now included in Europe, £3.9 million (31
May 2024: £4.0 million, 30 November 2023: £0.6 million), India and Dubai is
now included in APAC & ME, £3.7 million (31 May 2024: £2.7 million, 30
November 2023: £2.6 million) and South Africa is now included in Emerging
Markets, £2.4 million (31 May 2024; £2.4 million, 30 November 2023: £2.4
million). Accordingly, the prior period comparative balances for 31 May 2024
and 30 November 2023 have been restated to reflect this classification.
4. Operating costs
Unaudited Unaudited
six months ended six months ended
30 November 2024 30 November 2023
£m £m
Fixed remuneration 95.2 109.1
Variable remuneration 35.0 27.7
Employee related expenses 130.2 136.8
Advertising and marketing 42.2 43.8
Depreciation, amortisation and impairment 31.4 32.9
IT, market data and communications 32.0 27.2
Trading related costs 19.3 17.0
Legal and professional costs 16.1 15.4
Premises-related costs 4.1 6.0
Regulatory fees 1.1 (0.7)
Other costs 17.8 21.5
Total operating costs 294.2 299.9
5. Tax expense
The tax expense of £61.3 million (H1 FY24: £43.7 million) is recognised
based on management's estimate of the effective tax rate for the full year of
24.6% (H1 FY24: 24.8%), applied to profits generated from operations. The
actual effective tax rate for FY24 was 23.2%. The factors affecting the tax
charge in future periods are detailed in Note 9 of the FY24 Annual Report.
The OECD Pillar 2 global minimum tax rules come into force for the Group from
FY25. The tax footprint of the Group is such that the Pillar 2 rules are not
expected to have a material impact on the Group's tax charge as there is
currently insignificant activity in low tax jurisdictions. The Group has
applied the exception under IAS 12 - Income Taxes to recognising and
disclosing information about deferred taxes related to Pillar 2 and therefore,
there was no impact on the recognition and measurement of deferred tax
balances as a result of the legislation being substantively enacted.
6. Earnings per ordinary share
Basic earnings per ordinary share is calculated by dividing the profit for the
period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares in issue during the period, excluding shares
held in treasury and shares held in the Group's Employee Benefit Trusts.
Diluted earnings per ordinary share is calculated using the same profit figure
as that used in basic earnings per ordinary share and by adjusting the
weighted average number of ordinary shares assuming the vesting of all
outstanding share scheme awards.
Weighted average number of ordinary shares Unaudited Unaudited
30 November 2024 30 November 2023
Basic 363,896,654 397,611,659
Dilutive effect of share-based payments 4,071,377 3,740,573
Diluted 367,968,031 401,352,232
Unaudited Unaudited
six months ended six months ended
30 November 2024
30 November 2023
Basic earnings per ordinary share 51.7p 33.4p
Diluted earnings per ordinary share 51.1p 33.1p
7. Dividends paid and proposed
Unaudited Unaudited
six months ended six months ended
30 November 2024 30 November 2023
£m £m
Final dividend for FY24 of 32.64 pence per share (FY23: 31.94 pence per share) 117.9 126.7
The proposed interim dividend for FY25 of 13.86 pence per share, totalling
approximately £49.1 million, was approved by the Board on 22 January 2025 and
has not been included as a liability as at 30 November 2024. This dividend
will be paid on 3 March 2025 to those members on the register at the close of
business on 31 January 2025.
8. Goodwill
Goodwill has been allocated to CGUs as follows:
Unaudited 31 May 2024 Unaudited
30 November 2024 30 November 2023
£m £m £m
US 497.2 497.2 501.9
UK 100.9 100.9 100.9
South Africa 0.9 0.8 0.8
Australia 0.1 0.1 0.1
599.1 599.0 603.7
The movement in the goodwill balance is attributable to foreign exchange
movements. For the allocated goodwill above, there are no accumulated
impairment losses recognised as at 30 November 2024.
Goodwill arose as follows:
· US - from the acquisition of tastytrade on 28 June 2021.
· UK - from the reorganisation of the UK business on 5 September
2003.
· South Africa - from the acquisition of Ideal CFDs on 1 September
2010.
· Australia - from the acquisition of the non-controlling interest
in IG Australia Pty Limited in the year ended 31 May 2006.
The Group performs a full goodwill impairment assessment for its annual
financial statements and when circumstances indicate that the carrying values
may be impaired. The Group's full impairment assessment carried out for the
FY24 Financial Statements was based on value-in-use calculations. The key
assumptions used to determine the value-in-use for the different cash
generating units are disclosed in the FY24 Financial Statements.
An assessment of both qualitative and quantitative factors has been performed
to identify whether any indicators of impairment are present as at 30 November
2024. Having performed this assessment, management concluded that there was no
indication that goodwill may be impaired, for any of the Group's CGUs, as the
factors considered do not currently indicate a long-term deterioration of the
businesses and profitability. Management will continue to perform an annual
impairment test, incorporating cash flow projections based on the annual
budgets approved by the Board, for the FY25 Financial Statements.
US CGU:
The Group's largest goodwill balance is associated with the US CGU. Given the
judgement involved (refer to Note 2) in determining whether there are any
indicators of impairment, further details on the assessment of qualitative and
quantitative factors are provided below.
Performance of the US CGU:
During the period, the CGU demonstrated continued growth with H1 FY25
performance in relation to new client acquisition, net trading revenue and
client interest income being higher than H1 FY24. Management have not
identified an indicator of impairment when reviewing the CGU performance to
date.
Interest rate movement:
Interest rate movements impact both the discount rate and future cash flows.
The discount rate used to calculate the recoverable amount of the US CGU in
FY24 is a post-tax weighted average cost of capital (WACC) which is specific
to the US geographical region. The discount rate depends on the current market
assessment of the time value of money, determined by external market
information such as interest rates. Future cashflows include interest from
client funds, which can increase as a result of higher interest rates. Having
considered the impact of the decline in interest rates on both the future cash
flows and the discount rate, management have determined that the decline in
interest rate as at 30 November 2024 does not represent an indicator of
impairment.
Other factors:
Management have considered other factors including changes to the regulatory
environment and observable decline in assets such as technology as part of the
assessment. No indicator of impairment has been identified.
9. Intangible assets
Customer relationships Trade names Non-compete arrangements Internally developed software Domain names Software and licences Total
£m £m £m £m £m £m £m
Net book values
30 November 2023 - (unaudited) 135.8 52.3 16.3 31.1 9.4 7.3 252.2
31 May 2024 125.7 49.7 13.0 23.1 - 5.1 216.6
30 November 2024 - (unaudited) 116.8 47.7 9.9 17.3 - 3.8 195.5
The Group has performed a review of intangible assets as at 30 November 2024
and concluded that there are no indicators of impairment for customer
relationships, trade names, non-compete arrangements and software and
licences. The movements in carrying value of these intangible assets in the
current period are attributable to accumulated amortisation and foreign
exchange movements. The movements in carrying value of internal development in
the current period are attributable to additions, disposals, accumulated
amortisation, impairment losses and foreign exchange movements.
10. Financial investments
Unaudited 31 May 2024 Unaudited
30 November 2024 30 November 2023
£m £m £m
UK Government securities 469.2 460.7 615.5
Split as:
Non-current portion 304.7 351.4 477.1
Current portion 164.5 109.3 138.4
The Group held £393.8 million UK Government securities as at 30 November 2024
(31 May 2024: £345.0 million and 30 November 2023: £392.3 million) to
satisfy margin requirements.
The Group also held £135.6 million (31 May 2024: £139.2 million and 30
November 2023: £36.3 million) of financial assets as collateral from certain
brokers, which are not recognised on balance sheet.
11. Cash and cash equivalents
Unaudited 31 May 2024 Unaudited
30 November 2024 30 November 2023
£m £m £m
Cash at bank 508.7 622.6 472.0
Money market funds 378.2 360.6 114.7
886.9 983.2 586.7
Segregated client funds are held in segregated client money accounts which
restrict the Group's ability to control the monies and are therefore held
off-balance sheet. The amount of segregated client funds held at 30 November
2024 was £2,213.8 million (31 May 2024: £2,282.6 million; 30 November 2023:
£2,131.9 million). The return received on managing segregated client funds is
included within net operating income.
The above balances reconcile to the amount of cash shown in the Consolidated
Statement of Cash Flows as at the end of the period as follows:
Unaudited 31 May 2024 Unaudited
30 November 2024 30 November 2023
£m £m £m
Cash as per Consolidated Statement of Financial Position 886.9 983.2 586.7
Amounts due to pooling arrangement (4.4) (70.9) (9.6)
Balances as per Consolidated Statement of Cash Flows 882.5 912.3 577.1
12. Trade receivables
Unaudited 31 May 2024 Unaudited
30 November 2024 30 November 2023
£m £m £m
Amounts due from brokers 408.6 456.0 500.1
Own funds in client money 32.8 49.4 48.1
Amounts due from clients 3.4 2.9 8.4
444.8 508.3 556.6
Amounts due from brokers represent balances with brokers and execution
partners where the combination of cash held on account and the valuation of
financial derivative open positions, or unsettled trade receivables, results
in an amount due to the Group.
Own funds in client money represent the Group's own cash held in segregated
client funds, in accordance with the UK's Financial Conduct Authority (FCA)
CASS rules and similar rules of other regulators in whose jurisdiction the
Group operates and includes £3.4 million (31 May 2024: £16.0 million and 30
November 2023: £11.3 million) to be transferred to the Group on the following
business day.
Amounts due from clients arise when clients' total funds held with the Group
are insufficient to cover any trading losses incurred by clients, when clients
utilise trading credit limits or when clients are due to pay the Group fees in
relation to the services received. Amounts due from clients are presented net
of an allowance for impairment.
Allowances for expected credit losses on trade receivable balances are
disclosed in note 20.
13. Other assets
Other assets are cryptocurrency assets and rights to cryptocurrency assets,
which are owned and controlled by the Group for the purpose of hedging the
Group's exposure to clients' cryptocurrency trading positions. The Group holds
rights to cryptocurrency assets on exchange and in vaults as follows:
Unaudited 31 May 2024 Unaudited
30 November 2024 30 November 2023
£m £m £m
Exchange 1.4 0.8 1.2
Vaults 64.1 35.8 23.7
65.5 36.6 24.9
Other assets are measured at fair value less costs to sell. Other assets are
level 2 assets in accordance with the fair value hierarchy set out in note 29
of the FY24 Annual report.
14. Debt securities in issue
The Group has issued £300.0 million 3.125% senior unsecured bonds due in
2028. The issued debt has been recognised at fair value less transaction fees.
As at 30 November 2024, £1.2 million unamortised arrangement fees are
recognised on the balance sheet (31 May 2024: £1.4 million and 30 November
2023: £1.5 million).
The Group also has access to a £400.0 million revolving credit facility. The
revolving credit facility will mature in October 2026.
Under the terms of the revolving credit facility agreement, the Group is
required to comply with financial covenants covering maximum levels of
leverage and debt to equity. The Group has complied with all covenants
throughout the reporting period.
15. Trade payables
Unaudited 31 May 2024 Unaudited
30 November 2024 Restated 30 November 2023
Restated
£m £m £m
Client funds
UK 342.3 280.3 262.1
US 33.6 47.8 44.9
APAC 5.6 7.4 10.5
Europe 108.6 95.0 92.7
Total client funds 490.1 430.5 410.2
Issued turbo warrants 4.5 4.5 4.3
Amounts due to brokers 4.2 54.5 13.4
Amounts due to clients 13.1 3.8 3.3
511.9 493.3 431.2
Client funds reflects the Group's liability for client monies which are
recognised on balance sheet in cash and cash equivalents. The geographical
presentation of client funds has been presented to align with operating
segment (note 3). Prior period comparatives have been restated accordingly.
Amounts due to brokers represents balances where the value of unsettled
positions, or the value of open derivatives positions held in accounts which
are not covered by an enforceable netting agreement, results in an amount
payable by the Group.
Amounts due to clients represent balances that will be transferred from cash
and cash equivalents into segregated client funds on the following business
day in accordance with the UK's Financial Conduct Authority CASS rules and
similar rules of other regulators in whose jurisdiction the Group operates.
16. Share capital and share premium
Number of shares Share capital Share premium account
£m £m
Allotted and fully paid:
Ordinary shares (0.005p)
At 31 May 2023 408,947,842 - 125.8
Shares bought back and immediately cancelled (22,547,134) - -
At 30 November 2023 (unaudited) 386,400,708 - 125.8
At 31 May 2024 373,093,741 - 125.8
Shares bought back and immediately cancelled (11,535,873) - -
At 30 November 2024 (unaudited) 361,557,868 - 125.8
On 19 July 2023, the Board approved a £250.0 million buyback programme. The
second £150.0 million tranche began on 7 November 2023 was finalised on 31
July 2024. This resulted in a further purchase and cancellation of 3,686,746
shares in H1 FY25.
On 24 July 2024, the Board approved a £150.0 million buyback programme
comprising two tranches of £75.0 million each. The first of these tranches
commenced on 12 August 2024 and was completed on 9 September 2024. This
resulted in the purchase and cancellation of 7,782,442 shares. The second
£75.0 million tranche began on 25 September 2024. As at 30 November 2024,
6,198,372 shares had been bought back under this tranche for a total
consideration of £57.2 million. The Group has decided to hold these shares in
treasury and not cancel, unlike the previous tranches.
As at 30 November 2024, for the period of H1 FY25, the Group has repurchased
17,667,560 shares, with an aggregate nominal value of £883, for total
consideration of £167.2 million (including related costs of £4.1 million).
During the period, the Group has purchased 1,104,112 shares and utilised
1,368,728 shares held in the Employee Benefit Trust to satisfy the exercise
of the employee share-based payment awards. The cost of the purchase is part
of other reserves and these shares are held in Employee Benefit Trust.
No shares were issued to satisfy the exercise of share awards in H1 FY25.
During H1 FY25, there have been no changes to the Group's deferred redeemable
shares (H1 FY24: none).
17. Related party transactions
The basis of remuneration of key management personnel remains consistent with
that disclosed in the FY24 Annual Report. During the period there has been a
change in the composition of key management personnel. As a result, the group
has incurred one-off costs amounting to £1.2 million in the period which are
recognised as part of operating costs in note 4.
The Group has a 9.3% shareholding and 33% voting rights in Zero Hash Holdings
Limited which is accounted for as investment in associate on the Group's
balance sheet. Zero Hash facilitates cryptocurrency trading for clients of
tastytrade, Inc. (tastytrade). tastytrade recognised £0.1 million revenue
from Zero Hash during the period (H1 FY24: £0.1 million). In addition to
this, the Group has subleased part of its US office to Zero Hash. The rental
income generated in H1 FY25 from this sublease is £0.1 million (H1 FY24:
£0.1 million).
There were no other related party transactions which had a material impact on
the Consolidated Interim Condensed Financial Statements.
18. Contingent liabilities and provisions
The Group is subject to legal and regulatory risks in a number of
jurisdictions which may result in legal claims or regulatory action against
the Group. Through the Group's ordinary course of business there are ongoing
legal proceedings and engagements with regulatory authorities. Where possible,
an estimate of the potential financial impact of these legal proceedings is
made using management's best estimate, but where the most likely outcome
cannot be determined no provision is recognised.
The Group has ongoing litigation in respect of a class action lawsuit served
against two of its operating entities in 2023. The class action covers the
period from May 2017 to August 2023 and relates to the sale of OTC derivative
products to retail clients in Australia. The action is at an early procedural
stage and it is not possible to determine the potential outcome or to reliably
estimate any potential liability, so no provision has been recognised.
The Group is also subject to a group of claims that could have a financial
impact of approximately £19.7 million as at 30 November 2024 (31 May 2024:
£19.4 million and 30 November 2023: £19.9 million). The claims are for
damages arising from the alleged wrongful reversal of client nickel trades on
8 March 2022. On 11 July 2024 the Group obtained a favourable ruling from the
High Court of the Republic of Singapore in relation to one of the claims
against the Group, totalling £13.3 million, against which an appeal has been
filed by the claimants. In October 2024, an additional claim relating to the
nickel trade reversals were filed in the Japanese Tokyo District Court in
Japan. The claim is for approximately £6.4 million. As both sets of claims
are at an early procedural stages, and it is not possible to determine the
potential outcome or to reliably estimate any potential liability, no
provision has been recognised.
18. Contingent liabilities and provisions (continued)
Under the terms of the agreement with the Group's clearing broker for its
operations in the US, Apex Clearing Corporation, the Group guarantees the
performance of its customers in meeting contracted obligations. In conjunction
with the clearing broker, the Group seeks to control the risks associated with
its customer activities by requiring customers to maintain collateral in
compliance with various regulatory and internal guidelines. Compliance with
the various guidelines is monitored daily and, pursuant to such guidelines,
the customers may be required to deposit additional collateral or reduce
positions where necessary.
Other than the matters outlined above, the Group does not expect there to be
other contingent liabilities that would have material adverse impact on the
Group Consolidated Interim Condensed Financial Statements. The Group had no
material provisions as at 30 November 2024 (31 May 2024: £nil and 30 November
2023: £nil).
19. Financial risk management
Financial risks arising from financial instruments are analysed into market,
credit and liquidity risks. Details of how these risks are managed are in note
30 of the FY24 Annual Report. There has been no material change in the Group's
financial risk management policies during the period.
20. Net credit losses on financial assets
The Group recognised net credit losses of £0.7 million during the period (30
November 2023: £10.5 million). The principal sources of credit risk to the
Group's business are from financial institutions and individual clients.
Amounts due from financial institutions, which are stated net of an expected
credit loss of £4.8 million (31 May 2024: £1.2 million and 30 November 2023:
£1.2 million), are all less than 30 days due. Amounts due from clients, which
are stated net of an expected credit loss of £24.7 million (31 May 2024:
£29.4 million and 30 November 2023: £26.3 million), include both amounts
less than and greater than 30 days past due.
Below is the reconciliation of the Group's loss allowance:
Unaudited 31 May 2024 Unaudited
30 November 2024 30 November 2023
£m £m £m
At the beginning of the period 30.6 18.1 18.1
Loss allowance for the period:
- gross charge for the period 5.9 18.2 12.7
- recoveries (5.2) (2.7) (2.2)
- debts written off (1.9) (2.9) (1.1)
Foreign exchange 0.1 (0.1) -
At the end of the period 29.5 30.6 27.5
21. Financial instruments
Fair value hierarchy
The financial instruments valuation hierarchy and the definitions, details of
the inputs and the valuation techniques used in determining the fair values of
the Group's financial instruments are shown in note 29 of the FY24 Annual
Report.
There have been no changes to the valuation techniques for any of the Group's
financial instruments held at fair value as at 30 Nov 2024 (31 May 2024:
none). However, for the period ended 30 November 2023, the Group reclassified
£9.3 million trade receivables - due from brokers balances from level 2 to
level 1, £13.6 million trade payables - due to brokers balances from level 2
to level 1, £63.0 million trade payables - client funds balances from level 2
to level 1 and £4.3 million trade payables - issued turbo warrants balances
from level 2 to level 3.
The hierarchy of the Group's financial instruments carried at fair value is as
follows:
Level 1 Level 2 Level 3 Total fair value
At 30 November 2024 (unaudited) £m £m £m £m
Financial assets:
Cash and cash equivalents 378.2 - - 378.2
Trade receivables - amounts due from brokers (10.4) 10.0 - (0.4)
Financial investments 469.2 - - 469.2
Other investments - - 0.6 0.6
Financial liabilities:
Trade payables - amounts due to brokers (3.9) (1.4) - (5.3)
Trade payables - client funds 56.3 9.0 0.2 65.5
Trade payables - issued turbo warrants - - (4.5) (4.5)
Level 1 Level 2 Level 3 Total fair value
21. Financial instruments (continued)
At 31 May 2024 £m £m £m £m
Financial assets:
Cash and cash equivalents 360.6 - - 360.6
Trade receivables - amounts due from brokers (33.6) 2.8 - (30.8)
Financial investments 460.7 - - 460.7
Other investments - - 1.8 1.8
Financial liabilities:
Trade payables - amounts due to brokers (8.6) (1.8) - (10.4)
Trade payables - client funds 40.0 12.6 0.4 53.0
Trade payables - issued turbo warrants - - (4.5) (4.5)
Level 1 Level 2 Level 3 Total fair value
At 30 November 2023 (unaudited) £m £m £m £m
Financial assets:
Cash and cash equivalents 114.7 - - 114.7
Trade receivables - amounts due from brokers (32.8) 7.4 - (25.4)
Financial investments 615.5 - - 615.5
Other investments - - 1.2 1.2
Financial liabilities:
Trade payables - amounts due to brokers (13.6) (4.3) - (17.9)
Trade payables - client funds 80.4 16.6 - 97.0
Trade payables - issued turbo warrants - - (4.3) (4.3)
Fair value of financial assets and liabilities measured at amortised cost
The fair value of the Group's financial assets and liabilities measured at
amortised cost approximates their carrying amount, with the exception of debt
securities in issue.
The carrying value of the Group's debt securities in issue as at 30 November
2024 was £298.3 million (31 May 2024: £298.1 million, 30 November 2023:
£297.9 million) and the fair value of the debt securities was £267.8 million
(31 May 2024: £259.7 million, 30 November 2023: £250.2 million).
22. Subsequent events
During the period from 1 December 2024 to 20 January 2025, the Group
repurchased 1,091,411 Ordinary Shares with a nominal value of 0.005p for an
aggregate purchase amount of £10.8 million (including related costs of £0.1
million).
On 22 January 2025, the Board approved the extension of share buyback
programme of £150.0 million announced on 24 July 2024, by a further £50.0
million. This is expected to complete in H2 FY25.
On 16 January 2025, the Group announced the acquisition of Freetrade Limited,
a UK-based commission-free, self-directed investment platform for an
enterprise value of £160.0 million. The acquisition will be funded in cash
from existing capital resources. The acquisition is subject to a number of
conditions including regulatory approvals and expected to complete in
mid-2025. The enterprise value of £160.0 million excludes up to approximately
£14 million of acquired cash, net debt items and other liquidity requirements
resulting from the transaction.
There have been no other subsequent events that have a material impact on the
Consolidated Interim Condensed Financial Statements.
Statement of Directors' Responsibilities
The Directors confirm to the best of their knowledge that these Consolidated
Interim Condensed Financial Statements have been prepared in accordance with
UK-adopted International Accounting Standard IAS 34 - Interim Financial
Reporting, and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and that the interim
management report includes a fair review of the information required by
Disclosure and Transparency Rules 4.2.7 and 4.2.8, namely:
· an indication of important events that have
occurred during the six months ended 30 November 2024 and their impact on the
Condensed Consolidated Interim Financial Statements, and a description of the
principal risks and uncertainties for the remaining six months of the
financial year; and
· related-party transactions that have taken place
during the six months ended 30 November 2024 that have had a material effect
on financial position/performance; and changes in the related-party
transactions described in the last annual report that could have a material
effect on the financial position/performance in the six months ended 30
November 2024.
A list of current Directors is maintained on the IG Group Holdings plc
website: www.iggroup.com
On behalf of the Board
Clifford
Abrahams
Chief Financial Officer
Independent review report to IG Group Holdings plc
Report on the Consolidated Interim Condensed Financial Statements
Our conclusion
We have reviewed IG Group Holdings plc's condensed consolidated interim
financial statements (the "interim financial statements") in the interim
results of IG Group Holdings plc for the 6 month period ended 30 November 2024
(the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Consolidated Interim Statement of Financial Position as at 30
November 2024;
· the Consolidated Interim Income Statement and Consolidated
Interim Statement of Comprehensive Income for the period then ended;
· the Consolidated Interim Statement of Cash Flows for the period
then ended;
· the Consolidated Interim Statement of Changes in Equity for the
period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the interim results of IG Group
Holdings plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The interim results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the interim results, including the
interim financial statements, the directors are responsible for assessing the
group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the interim results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
22 January 2025
Appendix
Property, plant and equipment excluding right-of-use asset
£m 30 Nov 2024 31 May 2024
Property, plant and equipment 37.4 41.8
Right-of-use assets (20.9) (21.5)
Property, plant and equipment(1) 16.5 20.3
(1) Excludes right-of-use assets.
Operating lease net liabilities
£m 30 Nov 2024 31 May 2024
Right-of-use assets(1) 20.9 21.5
Lease liabilities (current) (7.1) (8.7)
Lease liabilities (non-current) (15.5) (15.1)
Operating lease net liabilities (1.7) (2.3)
(1) Amounts identified as right-of-use assets from property, plant and
equipment.
Own cash
£m 30 Nov 2024 31 May 2024
Cash and cash equivalents 886.9 983.2
Less: Amounts due to pooling arrangement (note 11) (4.4) (70.9)
Own cash 882.5 912.3
Issued debt
£m 30 Nov 2024 31 May 2024
Debt securities in issue (298.3) (298.1)
Unamortised fees capitalised (note 14) (1.2) (1.4)
Issued debt (299.5) (299.5)
Net amounts due from brokers
£m 30 Nov 2024 31 May 2024
Financial investments - UK Government securities held at brokers (note 10) 393.8 345.0
Trade receivables - amounts due from brokers (note 12) 408.6 456.0
Trade payables - amounts due to brokers (note 15) (4.2) (54.5)
Other assets (note 13) 65.5 36.6
Net amounts due from brokers 863.7 783.1
Financial investments
£m 30 Nov 2024 31 May 2024
Financial investments (note 10) 469.2 460.7
Less: Financial investments - UK Government securities held at brokers (note (393.8) (345.0)
10)
Financial investments 75.4 115.7
Net deferred tax liability
£m 30 Nov 2024 31 May 2024
Deferred tax assets 22.7 24.6
Deferred tax liabilities (49.2) (51.3)
Net deferred tax liability (26.5) (26.7)
Net tax (payable)/receivable
£m 30 Nov 2024 31 May 2024
Income tax receivable 0.7 10.3
Income tax payable (2.4) (8.1)
Net tax (payable)/receivable (1.7) 2.2
Own funds in client money
£m 30 Nov 2024 31 May 2024
Trade receivables - own funds in client money (note 12) 32.8 49.4
Less: Trade payables - amounts due to clients(1) (12.2) (2.1)
Own funds in client money 20.6 47.3
(1)Amounts considered as part of own funds.
Working capital
£m 30 Nov 2024 31 May 2024
Prepayments (non-current) 5.5 5.4
Prepayments (current) 21.8 27.4
Amounts due from clients (note 12) 3.4 2.9
Unamortised fees capitalised (note 14) 1.2 1.4
Other receivables 13.4 15.3
Other payables (non-current) - (1.3)
Other payables - accruals (85.7) (98.6)
Other payables - payroll taxes, social security and other taxes (3.1) (6.0)
Trade payables - amounts due to clients(1) (0.9) (1.7)
Working capital (44.4) (55.2)
(1)Amounts considered part of working capital.
Net own funds generated from operations
£m H1 FY25 H1 FY24
Cash generated from operations 240.6 70.9
Interest received on client funds 74.3 69.2
Interest paid on client funds (3.1) (0.8)
Cash generated from operations net of client interest 311.8 139.3
- (Increase) in other assets (28.9) (9.9)
- (Decrease)/increase in trade payables (16.3) 45.9
- (Increase)/decrease in trade receivables (5.5) 5.2
- Repayment of principal element of lease liabilities (3.5) (3.3)
- Interest paid on lease liabilities (0.6) (0.4)
- Fair value movement in financial investments 5.5 7.0
Own funds generated from operations (A) 262.5 183.8
Profit before tax (B) 249.3 176.4
Conversion rate from profit to cash (A/B) % 105% 104%
Adjusted operating costs
£m H1 FY25 H1 FY24
Operating costs (note 4) 294.2 299.9
- Net credit losses on financial assets 0.7 10.5
Operating costs inc. net credit losses 294.9 310.4
- Operating costs relating to the operational improvement programme - (10.0)
- Amortisation on tastytrade acquisition intangibles and recurring non-cash (17.5) (18.8)
costs
- Operating costs relating to the tastytrade acquisition and integration - (0.5)
Adjusted operating costs 277.4 281.1
Adjusted profit before tax and earnings per share
£m (unless stated) H1 FY25 H1 FY24
Earnings per share (p) (Consolidated Interim Income Statement) 51.7 33.4
Weighted average number of shares for the calculation of EPS (millions) (note 363.9 397.6
6)
Profit after tax (Consolidated Interim Income Statement) 188.0 132.7
Tax expense (Consolidated Interim Income Statement) 61.3 43.7
Profit before tax (Consolidated Interim Income Statement) 249.3 176.4
- Operating costs relating to the operational improvement - 10.0
programme
- Operating costs relating to the tastytrade acquisition and - 0.5
integration
- Amortisation on tastytrade acquisition intangibles and recurring 17.5 18.8
non-cash costs
Adjusted profit before tax (A) 266.8 205.7
Adjusted tax expense (65.6) (50.9)
Adjusted profit after tax 201.2 154.8
Adjusted earnings per share (pence) 55.3 38.9
Total revenue (B) 522.5 472.6
Adjusted PBT margin (A/B) % 51.1% 43.5%
1 Adjusted metrics exclude non-recurring or non-cash items. A reconciliation
to statutory measures can be found in the appendix.
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