IG Group reports higher revenue despite quiet markets

Despite a quiet fourth quarter for the markets, spread betting and CFD broker IG Group said revenue and profits for its fiscal year would be ahead of the previous year.

For the three months to 31 May, the FTSE 250 company saw higher revenues than the prior year, when its house broker had expected them to fall.

But IG said it now expects to report full year revenue around 7% higher than in 2016, though after a fall in the third quarter this is down from the 14% increase in net trading revenue seen in the first half of the year.

Earlier in May, with the VIX volatility index trading at a multi-decade low amid volatility levels that have been low for some time, house broker Numis had trimmed its revenue and profit forecasts.

But IG said profit before tax and earnings for the full year are expected to be "modestly ahead" of 2016, with total operating expenses in the second half of the year at around the same level as reported for the first half.

This includes a rebate from the Financial Services Compensation Scheme relating to prior years.

Shares in IG rose 4.4% by mid afternoon on Wednesday.

Numis said the 7% revenue rise was slightly ahead of its bottom of the range estimate of £484.1m and a little below consensus of £495.8m for the full year.

"We believe that achieving the second best revenue quarter ever, in such a trading environment, is a significant achievement and testament to the underlying growth profile of the business," analysts wrote.