Appy trading for IG Group as profits rise

SPREADBETTER IG Group yesterday said volatile markets across Europe and the success of new smartphone apps helped it post record profits for the past year.

Pre-tax profits at the group rose 3.4 per cent to £163m in the year to the end of June, after adjustment for items such as the closure of its sport betting business Extrabet, beating analyst expectations for £158.5m.

Chief executive Tim Howkins told City A.M. IG’s four smartphone apps – its Android app launched less than a month ago – had opened up new revenues from existing clients, with 14 per cent of client transactions now made through smartphones.

“If you’re an active trader you don’t want any downtime,” he said. “Clients which use the app as well as a computer are now about twice as valuable as our usual clients.”

He said it was “hard not to be pleased” by 54 per cent growth in IG’s German business, while its European division had also performed well.

IG is targeting international growth as it has 39 per cent market share in the UK but less in its other major markets and it believes it can raise that.

But Howkins said he saw high market volatility continuing. “There is a lot of uncertainty in the markets, and it may be here to stay at this level for several months,” he said.

IG’s revenues were up 7.3 per cent to £320.4m as its client base grew, and it said trading since the new financial year was better than in 2010.

It also paid a £4.1m Financial Services Compensation Scheme levy.

Numis analyst James Hamilton said once the extra costs were taken into consideration its underlying profit growth was 7.4 per cent.