Trading platform says regulatory changes have not yet had any impact on business
Companies: IG Group Holdings plc
Online trading giant IG Group saw revenues fall 3.8% in the third quarter after a quieter period in global financial markets led to reduced activity from users. However, the company stressed that regulatory changes had caused "uncertainty" but had yet to have any impact on the business.
IG Group shares fell 4.2% early on Thursday and dragged down shares in CMC Markets (-1.3%) and Plus500 (-0.5%), which are also both facing regulatory uncertainty and would likely have also seen lower user activity due to the same economic factors.
Revenue for the quarter was £117.4m, 3.8% lower than the previous year, but active client numbers were actually ahead by 13%, and new first trades in the period were 20% higher than the prior year. The big drop looks due to lower revenue per customer, which was down 15%.
The company's relatively young stockbroking business in the UK and Australia continued to grow during the period, with clients hitting 16,000 at the end of February, and the firm plans to launch a discretionary managed smart portfolio ETF service in the UK during the fourth quarter.
IG said its fourth quarter had started better but stressed that it was "impossible" to predict the market conditions for the rest of the year "or to draw precise conclusions at this stage".
The regulatory changes, whilst causing uncertainty, seem to not have had any impact on performance just yet, with client recruitment remaining strong and the underlying business performing well.