REG - IG Group Hldgs plc - Third Quarter Revenue Update

IG groupAnnouncement

13/03/2025 07:15

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RNS Number : 4548A  IG Group Holdings plc  13 March 2025

13 March 2025

LEI No: 2138003A5Q1M7ANOUD76

IG GROUP HOLDINGS PLC
Third Quarter Revenue Update

 

'Q3 revenue growth reflected stronger market conditions and an increase in
active clients. New customer acquisition has improved and there is more to do
to ensure stronger, sustained growth'

 

IG Group Holdings plc ("IG", "the Group"), today issues its scheduled revenue
update for the three months to 28 February 2025 ("Q3 FY25"), representing the
third quarter of the financial year ending 31 May 2025 ("FY25").

 

Business performance in Q3

Total revenue of £268.0 million increased 12% on the prior year and 10% on
the prior quarter. Within this, trading revenue of £235.3 million increased
15% on the prior year and 12% on the prior quarter. Growth was driven by
higher revenue per client as a result of stronger market conditions.

 £ million                      Q3 FY25  Q3 FY24  Change  Q2 FY25  Change

 OTC derivatives                185.9    163.7    14%     166.0    12%
 Exchange traded derivatives    41.7     35.3     18%     36.8     13%
 Stock trading and investments  7.7      5.9      32%     6.8      13%
 Trading revenue                235.3    204.9    15%     209.6    12%
 Net interest income            32.7     35.2     (7%)    34.0     (4%)
 Total revenue                  268.0    240.1    12%     243.6    10%

 

Active clients across the Group increased 2% on the prior year and 5% on the
prior quarter to 272,700 (Q3 FY24: 266,800; Q2 FY25: 261,000).

First trades increased across all products when compared to the prior year and
prior quarter. This growth resulted from stronger market conditions, improved
product offerings, effective promotions and increased marketing investment
which will continue in Q4. The Group remains focussed on closing product gaps,
including crypto, enhancing existing offerings, strengthening marketing
capabilities, and improving efficiency to deliver stronger, sustained earnings
growth.

Within exchange traded derivatives, tastytrade trading revenue increased 30%
on the prior year and 18% on the prior quarter to a record $50.9 million (Q3
FY24: $39.2 million; Q2 FY25: $43.3 million). On a reported GBP basis, trading
revenue increased 32% on the prior year and 22% on the prior quarter to £40.8
million (Q3 FY24: £30.9 million; Q2 FY25: £33.4 million).

Spectrum contributed exchange traded derivatives trading revenue of £4.4
million in the prior year and £3.2 million in the prior quarter. As
previously announced, the Group exited Spectrum shortly following the end of
H1 FY25 and there was no material revenue contribution in Q3 FY25.

Stock trading and investments trading revenue increased 32% on the prior year
and 13% on the prior quarter reflecting enhancements to our proposition.

Net interest income of £32.7 million declined 7% on the prior year and 4% on
the prior quarter reflecting lower interest rates and stable client money
balances. Net interest income is driven by client money held off the Group
balance sheet which was £3.8 billion as at 28 February 2025 (29 February
2024: £3.7 billion; 30 November 2024: £3.8 billion).

Business performance in Q3 YTD

Performance in the financial year-to-date has been driven by stronger market
conditions which increased revenue per client and contributed to total revenue
up 11% on the prior year.

Active clients increased 2% to 328,000 (Q3 FY24 YTD: 323,100) with first
trades up more strongly as a result of improved customer acquisition in Q3.

 £ million                      Q3 FY25 YTD  Q3 FY24 YTD  Change

 OTC derivatives                546.3        491.4        11%
 Exchange traded derivatives    119.7        98.9         21%
 Stock trading and investments  21.0         17.0         24%
 Trading revenue                687.0        607.3        13%
 Net interest income            103.5        105.4        (2%)
 Total revenue                  790.5        712.7        11%

 

Update on the acquisition of Freetrade

Freetrade has continued to trade well with performance tracking in line with
the Group's expectations.

The Group is pleased to announce that it has received key antitrust and change
in control approvals for the acquisition which is now expected to close in
April 2025, sooner than originally guided.

Share buyback and capital reduction

In January 2025, the Group extended the current share buyback programme by
£50 million to £200 million which will be completed in FY25. As of 11 March,
2.3 million shares had been repurchased at a cost of £21.7 million.

In the coming months, the Group plans to seek shareholder and regulatory
approval to reduce IG Group Holdings plc's share premium account and merger
reserve, with a corresponding increase in retained earnings. This would
increase IG Group Holdings plc's distributable reserves and enhance
flexibility to invest in growth and return capital to shareholders with no
impact to the Group's overall equity position.

Outlook

Based on Q3 results and continuing stronger market conditions in Q4, the Group
remains confident of meeting FY25 consensus total revenue and adjusted profit
before tax expectations 1  (#_ftn1) .

Enquiries

 IG Group Investor Relations     Media
 Martin Price / Adnan Zab        Sodali & Co

 020 7573 0020 / 020 7633 5310   020 7100 6451
 investors@ig.com                iggroup@client.sodali.com

 

Disclaimer - Forward-looking statements

This 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 Company's annual report for the financial year ended
31 May 2024. The annual report can be found on the Company's website
(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. Nothing in this
statement should be construed as a profit forecast.

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 c.19,000 financial markets
worldwide.

 1  (#_ftnref1) Consensus forecasts can be found on the investor relations
section of the Group's website (www.iggroup.com/investors
(http://www.iggroup.com/investors) ) and are currently for FY25 total revenue
of £1,027 million and adjusted PBT of £494 million

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