IG Group
IG Group first half trading strong, company takes doubtful debt charge due to volatile October
IG Group said trading conditions in the first half have been strong, particularly in the second quarter, and it expects to increase pretax profit for the six months to end-November to £58 million from £48 million a year earlier on revenues of £125 million, up 45 percent.
Recent volatile market conditions resulted in extraordinary trading conditions for the group, which achieved significant new records in October for monthly revenue, number of transactions and number of accounts opened.
However, while the volatility produced significant additional revenue, it also produced significant uplifts in betting duty and doubtful debts, both of which were adversely affected by the impact of market volatility on clients' trading performance. As a result the group expects that betting duty and the charge for doubtful debts will be approximately £7 million and £15 million, respectively for the six month period, with one third of the betting duty and almost 80 percent of the doubtful debt charge arising during October.
Account opening and client activity remain strong across the group and IG is benefiting from its broader international reach and increased product diversity. It continues to evaluate a number of additional overseas markets. The business remains debt free and highly cash generative.
Setting aside the exceptional charge for doubtful debts, the business continues to perform extremely well and the board remains confident in the future prospects of the group, IG added.
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