Online broker IG Group Holdings PLC (LON:IGG) delivered a 30% jump in third quarter revenue, boosted by a boom in cryptocurrencies trading.
Net trading revenue rose to a record £152.9mln in the quarter ended February 28 from £117.4mln a year earlier.
Shares shot up 5% to 854p in morning trading.
The company, which provides online stockbroking and trading services to retail investors, reported said active client numbers rose 16.5% from a year earlier with revenue per client increasing 12%.
READ: IG Group achieves record profits as it prepares for regulatory clampdown
Revenue in the UK rose 35% to 369.2mln, while revenue in the Europe, Middle East and Africa increased 25% to £41.9mln and revenue in the Asia Pacific grew 29% to £36.4mln.
Cryptocurrencies demand lifts revenues
IG said client trading in cryptocurrencies accounted for 11% of revenue in the third quarter, though the market had slowed since the end of January as global regulators begin to crack down on the sector. The value of Bitcoin surged last year by more than 900% but prices have reversed from a peak of US$20,000 just before Christmas to about US$8,996 today.
Regulators have also been clamping down on the spreadbetting industry due to concerns about retail investors losing money on contracts for difference (CFDs).
The European Securities and Markets Authority is considering imposing restrictions on the marketing, distribution and sale of CFDs to retail clients and is expected to publish measures soon.
IG said it continues to believe that any financial impact from the implementation of measures by ESMA is unlikely to be significant in fiscal year 2018.
In January, the UK’s Financial Conduct Authority also told spreadbetting firms to properly warn retail investors of the risks involved in CFDs or face action.
IG's market position should improve, says Numis
"As the CFD industry matures and regulation is introduced to restrict the activities of the less scrupulous providers, we believe IG's market position
should improve," Numis said.
"We see this enhancing the quality of the group's income and believe its best in class practice will ensure that it is less negatively impacted from regulatory change."
Numis left its rating on the stock at 'hold' but raised its target price to 820p from 781p, saying third quarter revenues were 5.4% ahead of its estimate.
The broker upgraded its full-year revenue forecasts to £560.9mln from £553.0mln and raised its pre-tax profit guidance for the year by 2% to £268.7mln from £263.5mln.
"We continue to take a conservative approach to Q4 (our revenue forecast remains unchanged at £139.6mln) and we believe that the risk to our forecasts remains to the upside.
"We have also modestly increased our profit forecast for next year by 2.2% to £225.2mln from £220.3mln and for the year after by 2.2% to £249.5mln from £244.2mln.