IG Group sizes up MF Global’s ex-client base

ROUGH financial markets pushed IG Group’s like-for-like revenues up by a better-than-expected 28 per cent in the past six months, it said yesterday.

The spreadbetting group said overall revenues are expected to reach £195.6m for the six months to the end of November, with “strong growth” in revenue of 25 per cent when its closed-down sports betting business was included.

IG said the collapse of MF Global, which had about three per cent of the UK contracts for difference (CFD) market and 16 per cent of the Australian CFD market, would cost it a maximum of £0.3m but presented opportunities for it to add new clients.

“IG has benefited from account opening and account re-activation by former MF Global clients and expects this benefit to continue as MF Global repays funds to its clients,” its chief executive Tim Howkins said in a statement.

IG said it was both attracting new clients – with a 15 per cent increase in the number actively trading – and that its existing client base was spending around 11 per cent more per person.

But it warned that its pre-tax profit margin was unlikely to improve drastically despite higher revenues because it was recruiting heavily in IT and marketing. “The impact of this investment will result in a full-year margin closer to that achieved in the prior year,” it said.

It said turbulence in financial markets remained higher than 2010, although volatility in the final three months of the period was “less exceptional” than in August, which saw a spectacular spike.

UK revenues were up 23 per cent to £102.1m; Australia revenues rose 43 per cent to £32.7m; its Europe arm grew 41 per cent to £37.8m, and its emerging markets and US division jumped 54 per cent to £9.4m.