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IG Group makes long-term dividend commitment as trading activity picks up

“Assuming these targets are achieved, the Group's revenue in FY22 will be around 30% higher than in FY19.“
Trading
IG expects £100mln of revenues from new markets and terrtitories

May has seen a strong pick-up in trading at spread better IG Group Holdings PLC (LON:IGG) prompting it to raise its forecasts.

Shares rose by more than 10% as IG also laid down a punchy sales forecast for the next three years in a strategy update.

Cryptocurrency prices have rebounded since the start of the month, which will have helped, but IG said that market conditions generally were more favourable.

Fourth-quarter revenue is now forecast at £115mln, compared with £108mln in the three months previously.

Turnover for the year to May is expected to come in at £475mln (£569mln).

Revenues have been affected by a  sector-wide tightening up on the regulatory environment for trading financial instruments such as spread betting, CFD and options.

Operating profits for the year to May will be £190mln, while the dividend is maintained at 43.2p.

IG also vowed to maintain the payout at least at this level going forward.

In the strategy review, the group added it expects to see growth resume after this year and will up spending by £30mln a year to take advantage of opportunities in new products and territories.

These new opportunities are forecast to generate an additional £100mln of revenue by 2022, with the core business to grow by 3-5% a year.

“Assuming these targets are achieved, the Group's revenue in FY22 will be around 30% higher than in FY19.“

On this year’s £475mln, that would equate to annual turnover of £618mln.

Shares rose 11% to 525.2p.

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