IG Group gets tight on costs to head off fall

 
Michael Bow
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IG Group, the spread betting company, yesterday said it would curb costs to help deflect flatlining revenues forecast for the second half of the financial year.

The company, which yesterday revealed a 14 per cent drop in revenues for the first half of the year, said the traditionally booming second part of the calendar between December and May would be broadly in line with the first half.

IG, which is the world’s largest spread betting company, said it had already made headcount reductions, cut planned marketing spend and deferred recruitment to offset the headwinds.

Revenue between the end of June and the end of November was £169m. The figures for the second quarter crept up seven per cent from the first quarter.

Last year IG delivered a stellar set of numbers as the extreme levels of volatility helped the firm attract business. It said continuing subdued markets this year had impacted client activity.

Shares in the company closed down 2.2 per cent yesterday.

Canaccord Genuity analyst Robin Savage said: “The good news is IGG’s market leadership position strengthens as the weak market impacts its competitors more than IGG.”

Numis analyst James Hamilton added: The scale of IG enables it to match an unrivalled proportion of its customer trades with other customers while its competitors have to trade against their customers to achieve profitability.”