In H1 FY23, IG Group reports increased revenue

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IG Group Holdings plc (LON:IGG), a leader in electronic trading, released its results for the six months ended on November 30, 2022, today (H1 FY23).

Net trading revenue from continuing operations was £494.9 million on a statutory basis, an increase of 5% from H1 FY22. The Group’s overall revenue, which includes interest income, increased 10% to £519.1 million, reflecting the period’s rising interest rates.

In comparison to H1 FY22, statutory operating costs were £279.9 million, up 25%. In comparison to H1 FY22, the Group’s statutory profit before tax for the first half of FY23 was £240.5 million.

Compared to H1 FY22, net trading revenue from OTC derivatives in H1 FY23 climbed by 6% to £416.5 million. In the first half, Q2 revenue rose 11% from Q1.

With 159,100 active clients trading throughout the period, the number of active clients remained consistent with H1 FY22, and the average revenue per client climbed by 6% to £2,618 in order to demonstrate the sustained strength and calibre of our client base. 24,300 extra new clients were onboarded and active throughout the period, which is a 17% decrease from H1 FY22.

OTC derivatives revenue for the UK and EU was £209.3 million, in line with H1 FY22’s (208.3 million). A 3% decrease in active clients was counterbalanced by a 3% rise in average revenue per client. Due to higher revenue per client in the second quarter, revenue in Q2 was 9% higher than in Q1.

With a 28% increase in active clients and a 2% decline in average revenue per client, Japan revenue climbed by 25% to £55.8 million. With Q2 revenue being 6% higher than Q1, H1 FY23 constituted a record half for revenue and active clients for Japan. Although client onboarding is still going strong, first trades in the period were down 18% from the unusually high levels seen in H1 FY22.

The greatest revenue quarter since the Australian Securities & Investments Commission (ASIC) leverage restrictions were established in Q4 FY21, with revenue of £49.3 million up 9% from H1 FY22 and 15% from Q1. A 24% rise in revenue per client in the first half more than offset a 12% decline in active clients.

In the first half of FY23, profit before tax increased by 1% to £240.5 million ($260.7 million) on an adjusted basis from H1 FY22.

Profit after tax was 1% lower on an adjusted basis and 4% lower than H1 FY22. Due to decreased profitability, basic EPS was 5% lower than H1 FY22 and 2% lower on an adjusted basis.

The Board authorised the 13.26 pence per share, £55.1 million proposed interim dividend for FY23 on January 25, 2023, and it was not recorded as a liability as of November 30, 2022. The members listed on the register as of the close of business on February 3, 2023, will receive this dividend on March 3, 2023.

Chief Executive June Felix said:

“I’m extremely proud of our achievements in the period, having delivered on two critical elements of our strategy: diversified business growth and the return of excess capital to shareholders. Non-OTC products now make a meaningful contribution of nearly 20% to our total revenue, and by the end of the half we had returned nearly £250 million to shareholders. We have also announced an extension to our share buyback today.

“Despite a softening in trading demand due to the global economic environment, our high-quality clients have continued to find opportunities to trade, demonstrating the resilience of the business model. This is the result of our unwavering focus on investing in and prioritising the delivery of best-in-class technology and platforms, innovation, client service and marketing. All achieved while delivering significant profit margins and consistently generating healthy levels of cash and capital.

“Underpinning this strong performance are our ambitious, passionate and talented people around the world, who are driven by our purpose to create the pre-eminent solution for active traders.”

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