Flat markets hurt IG Group’s income as traders cut activity

 
Tim Wallace
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Revenues slumped at IG Group over the three months to August as low volatility left little room for its trading clients to act, the firm said yesterday.

Incomes dropped nine per cent from £93.6m to £85.6m. Every country was hit – the smallest drop came in the UK, where revenues fell three per cent to £45.9m.

European revenues fell nine per cent to £18.4m, and Australian incomes fell 10 per cent to £12.3m.

The firm blamed low volatility across financial markets, particularly in foreign exchange.

“IG remains a growth business that we view as being similar to the tide coming in. Each new wave climbs up the beach but it also flows back from it peak with volatility determining how far up the beach each wave climbs and how far it retreats from that crest,” said analyst James Hamilton from Numis.

“We believe IG offers good value on a historic multiple of 14.8x earnings, and providing an historic 4.7 per cent dividend yield.” IG’s shares fell 0.91 per cent on the results.

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