IG Group posts 17 per cent rise in trading revenue and hikes dividend for 2016 financial year

Caitlin Morrison
Follow Caitlin
Stormy markets ahead of the EU referendum helped IG Group grow revenue and profit (Source: Getty)

Spreadbetter IG Group said today that it's feeling the benefits of recent market volatility - the group has hiked its dividend for the 2016 financial year, after posting revenue growth across all regions.

The figures

IG's net trading revenue was up 17 per cent to £456.3m, with pre-tax profit rising 23 per cent to hit £207.9m.

Diluted earnings per share grew by 24 per cent to 44.58p.

The company hiked the dividend by 12 per cent to 31.40p per share.

Why it's interesting

The company said recent volatility in financial markets had helped boost results for the year, although the group's growth was primarily driven by an improved performance in digital and mobile marketing.

The Brexit vote took place just after year end, so the impact is not reflected in these results. Chairman Andy Green said the business was "unscathed" by the referendum result, but added that the decision to leave the EU "does throw up new challenges for IG", and said resources will be diverted while the company decides "on the best course of action to secure the future of our European business".

And IG experienced internal volatility during the year - the stock was hit hard when chief executive Tim Howkins quit in July last year, and this was followed by the departure of finance chief Chris Hill. Green said he was "extremely impressed, but not surprised" by how well the group's employees rallied during the uncertainty caused by the departures.

What IG Group said

New chief exec Peter Hetherington said: "We made good progress in 2016, strategically, operationally and financially. The business starts this year in good shape, and we are delivering a number of initiatives which should continue to support future growth."

He added: "We experienced a real-world test of our systems, processes and risk management with the UK's EU referendum. This sort of event brings out the best in IG's people. We prepared meticulously, providing regular communications and adjustments for our clients to ensure they understood the potential for market moves, and stress testing our technology even more than normal.

"As it turned out, the event was more dramatic than most people anticipated, with some of the most extreme movements we have seen in financial markets. I am delighted with the way IG handled the event itself and the immediate aftermath.

"While IG avails itself of the 'passporting' regime in using its UK licence to operate across the EU, the decision to leave the EU does not change much in the short term. We will put plans in place to deal with this outcome, as we monitor the progress in political discussions, and be ready to act if required to ensure we can continue to operate across Europe."

In short

IG Group thrived on volatility brought on by the EU referendum over the last 12 months - but the real work begins now as the company starts planning how to hold on to its European business.

Related articles