IG Group reports lower revenues for Dec-Feb quarter

Spread betting and CFDs broker IG Group plc has today released its financial results for the third quarter of the fiscal year ending on February 28, 2023.

The Q3 revenue figure was reported at £239 million for the third quarter of the FY22, down 7 percent from £257.2 million in the comparable three months a year ago. Out of this figure, tastytrade contributed £45 million in Q3 revenues, up 57 percent on a yearly basis from £28.4 million in 2022.

Other business highlights show that over-the-counter (OTC) leveraged revenue dropped by 18 percent year-on-year to £179 million, while exchange traded derivatives jumped to £52 million from £32 million the previous year. Stock trading and investments revenue increased year-on-year by 19 percent. Alongside that, Spectrum continued to deliver strong organic growth and has reached an agreement with UniCredit to list products on the exchange.

IG said that this drop in revenue reflects a challenging comparative period which included the extraordinary volatility. Within its OTC derivatives business, lower market volatility in the period quarter resulted in a lower revenue per client, with active clients down 8%.

“Stock trading and investments revenue grew year-on-year driven by interest income. Client trading activity has reduced, returning to pre-pandemic levels, however the number of clients remains steady, and materially higher than pre-pandemic,” the broker explains.

On a year-to-date basis, the UK online trading leader said the trading activity among clients helped grow its revenue by 5 percent year-on-year. IG’s year-to-date revenue from continuing operations was £758 million compared with £729.1 million in 2022.

Interest income was an important driver of revenue growth in the period. US interest income was £32.7 million for Q3 YTD (Q3 FY22 YTD: £0.6 million), and non-US interest income was £17.4 million (Q3 FY22 YTD: (£1.2) million).

IG Group pointed out to stable customer metrics despite lower levels of new client acquisition compared to the exceptional metrics seen throughout the previous year. Active clients were lower by five percent to 335,400 from 354,400 a year earlier.

The FTSE 250-listed group also noted that the revenue generated in its core markets – countries regulated by the European Securities and Markets Authority, Australia, Singapore, Switzerland, Dubai and South Africa – amounted to £182 million. This figure was down from the £221.6 million it booked in the Q3 2022. Additionally, revenue in the high potential markets segment was £56.7 million, up 60 percent from £35.4 million a year earlier.