IG Group smashes profit forecasts
FINANCIAL trading firm IG Group announced yesterday that pre-tax profits jumped by more than 25 per cent for the year ending 31 May, beating most analyst expectations.
Shareholders will also get their slice of the pie after the company announced a 13.5p dividend, which brings the total dividend for the year to 18.5p, a 25.5 per cent increase on 2009. Chief executive Tim Howkins said that the company remains committed to paying shareholders 60 per cent of earnings.
Trading revenue was up 16 per cent boosted in part by IG cutting its spreads for the UK market during the past year. Some analysts have questioned whether this will continue to have a positive impact on earnings, but Howkins is confident: “The benefits will be ongoing. We have positioned ourselves competitively in the UK market and this should continue to show results.”
Howkins does not expect the changes to Capital Gains Tax (CGT) in the UK to have much of an effect on its spread betting business, which is exempt from CGT. And neither does he fear regulatory changes even though Japanese regulators are planning to reduce leverage limits: “Most regulators are concerned with reducing systemic risks and as an organisation we are not systemic,” he said.
The FTSE 250-listed company is due to move offices to Cannon Street next month, which will be 50 per cent larger than its current London premises. Howkins told CityA.M. it also plans to recruit 50 new staff to boost its London-based IT function in the coming months.
Stockbroker Arden Partners upgraded its rating on IG to a “buy” after the results were announced.