3rd Quarter Results

RNS Number : 8690R

IG Group Holdings plc

11 March 2021

 

11 March 2021

LEI No: 2138003A5Q1M7ANOUD76

Third Quarter Revenue Update

'Another consecutive, exceptional quarter for revenues driven by continued high levels of client activity, with the Significant Opportunities revenue target now anticipated to be substantially achieved in FY21, a year ahead of plan'

IG Group Holdings plc ("IG", "the Group", "the Company"), a global leader in online trading, today issues its scheduled update on revenue for the three months to 28 February 2021 ("Q3 FY21"), representing the third quarter of the financial year ending 31 May 2021 ("FY21").

Business performance in Q3

IG continued to see exceptional levels of trading activity throughout the third quarter, delivering revenue of £230.3 million, 65% higher than the same period in the prior year (Q3 FY20: £139.8 million) and up 11% on Q2 FY21.  Performance was driven by a combination of sustained elevated levels of trading from IG's existing clients and continued high levels of client acquisition with a record 230,100 clients active in the quarter, representing growth of 60% year over year (Q3 FY20: 143,800) and 11% on Q2 FY21.  The level of revenue per client for the Group's OTC Leveraged clients was maintained at similar levels to those reported in Q1 and Q2 FY21 and 9% higher than the prior year period.

· Q3 FY21 revenue in the Core Markets was £192.7 million, up 67% year over year (Q3 FY20: £115.7 million) with active clients reaching 191,700.  Within our non-leveraged offering, we saw a period of exceptional demand which drove significant increases in revenue, revenue per client, and client acquisition in the period

· Q3 FY21 revenue in the Significant Opportunities portfolio was £37.6 million, up 55% on the prior year period (Q3 FY20: £24.2 million).  This was largely driven by a 50% increase in the number of active clients to 40,100 (Q3 FY20: 26,700)

Revenue by product (£m)	Q3 FY21	Q3 FY20	% Change
OTC Leveraged	210.5	134.0	57%
Exchange Traded Derivatives	5.4	3.9	40%
Stock Trading and Investments	14.4	1.9	619%
Group	230.3	139.8	65%

In the quarter 40,300 new clients placed a first trade with 23,900 new OTC Leveraged clients, up 81% year over year (Q3 FY20: 13,200), 3,700 new Exchange Traded Derivatives clients, and 18,300 new Stock Trading and Investments clients.  There were 5,700 new clients that traded more than one product and therefore qualified as multi-product clients.  The level of client acquisition in Q3 was similar to the elevated levels seen in the prior two quarters of FY21 with the exception of a short period in late January / early February when the Group saw an unprecedented spike in new client demand, largely in response to heightened news flow relating to certain listed US stocks.

Business performance in Q3 YTD

Year to date revenue of £647.1 million is 66% higher than the prior year period (Q3 FY20 YTD: £389.7 million) with active clients up 60% at 282,900. 

· Q3 FY21 YTD revenue in the Core Markets was £533.2 million, up 64% on the prior year period (Q3 FY20 YTD: £325.5 million) with 224,900 active clients

· Q3 FY21 YTD revenue in the Significant Opportunities portfolio was £113.9 million, 77% higher than the prior year period (Q3 FY20 YTD: £64.2 million) with 60,700 active clients.  Momentum has been maintained across the portfolio and has exceeded our expectations.  As a result, we now anticipate substantially achieving our three-year revenue target of £160 million by the end of FY21, one year ahead of schedule

Revenue by product (£m)	Q3 FY21 YTD	Q3 FY20 YTD	% Change
OTC Leveraged	599.7	371.6	61%
Exchange Traded Derivatives	17.7	11.7	51%
Stock Trading and Investments	29.7	6.4	369%
Group	647.1	389.7	66%

Outlook

With the sustained higher levels of volatility in the financial markets in FY21, IG's active client base is now at record levels and is materially larger than in the prior year period, with trading behaviours and levels of retention comparable to historical averages. The Group is in a strong position to deliver on its growth strategy and will continue to optimise its resources to deliver longer term attractive growth.  Should IG see normalisation in financial market volatility, or a stabilisation in the macro environment, we would anticipate some reduction in the level of client acquisition and activity, although underpinned by the larger high-quality client base.  

tastytrade

Trading has been very strong, with the tastyworks brokerage business accelerating its rate of active account growth in 2021 and reporting a 100% increase in the number of active trading accounts during the month of February 2021 versus the prior year period.  The strong performance in brokerage  is mirrored in the tastytrade education and content business, with registrants growing by over 100,000 in the two months to the end of February to nearly 1 million.  This performance reinforces the strategic and financial rationale of the tastytrade acquisition, creating a strong foundation for the business to deliver future growth.  With some regulatory approvals now obtained and others pending but on track, the acquisition is anticipated to close in the first quarter of FY22.

June Felix, Chief Executive Officer:

"I am delighted with the excellent results and progress we have made towards delivering on our strategic goals. The continued performance from the Significant Opportunities portfolio has been remarkable, and we anticipate substantially achieving the revenue target of £160 million one year ahead of plan. The Group is also continuing to grow the size of its high quality and loyal client base which represents a long-term asset to the Group.

Our planned US acquisition of tastytrade is progressing well and the outstanding client growth delivered in the period underlines the further, significant growth potential of this business. This accelerates our strategy to drive new sources of growth, while also expanding the Group beyond its core OTC offering.

I would like to take this opportunity to thank our people for their continued hard work during the quarter. Operationally, this has been one of the busiest periods in IG's history, and our global workforce has responded with the kind of dedication, resilience and professionalism that is embedded in the IG culture."

The Group's next scheduled market announcement will be its full year FY21 results, scheduled for July 2021.

For queries, please contact:

IG Group Investors    IG Group Press  FTI Consulting

Liz Scorer     Ramon Kaur Neil Doyle / Ed Berry 

020 7573 0727                                                 07388 440 127                                 020 3727 1141 / 1046

[e-mail]    [e-mail]

Disclaimer - forward-looking statements

This statement, prepared by IG Group Holdings plc (the "Company"), may contain forward-looking statements about the Company and its subsidiaries (the "Group"). Such forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "projects", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other various or comparable terminology. 

Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors which are beyond the Company's control and are based on the Company's beliefs and expectations about future events as of the date the statements are made. If the assumptions on which the Group bases its forward-looking statements change, actual results may differ from those expressed in such statements. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including those set out under "Principal Risks" in the FY20 Group Annual Report for the financial year ended 31 May 2020. The Annual Report can be found on the Company's website (www.iggroup.com).

Forward-looking statements speak only as of the date they are made. Except as required by applicable law and regulation, the Company undertakes no obligation to update these forward-looking statements. Nothing in this statement should be construed as a profit forecast.

About IG

IG empowers informed, decisive, adventurous people to access opportunities in over 17,000 financial markets. With a strong focus on innovation and technology, the Company puts client needs at the heart of everything it does.

IG's vision is to provide the world's best trading experience. Established in 1974 as one of the world's first providers of financial derivatives to retail traders, it continued leading the way by launching the world's first online and iPhone trading services.

IG is an award-winning, multi-product trading company which allows retail, professional and institutional clients to trade 24 hours a day, 7 days a week^[1]. IG is the world's No.1 provider of CFDs^[2] and a global leader in forex derivatives. It provides leveraged services with the option of limited-risk guarantees and offers an execution-only stock trading service in the UK and Australia. IG has a range of affordable, fully managed investment portfolios, which provide a comprehensive offering to investors and active traders.

IG is a member of the FTSE 250, with offices across Europe, including a Swiss bank, Africa, Asia-Pacific, the Middle East and North America. IG Group Holdings plc holds a long-term investment grade credit rating of BBB- with a stable outlook from Fitch Ratings.

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[1]   Excluding 10pm Friday (GMT) to 8am Saturday (GMT)

[2]   Based on revenue excluding FX (from published financial statements, June 2020)

 

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