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Julie Felix will not be returning after her medical leave. The search for a new CEO has started - is Malcolm Le May available - he seems to have a track record making him suitable to be rewarded for failure.
AceOfClubs
I do hope non exec Malcolm Le May is adding more value at IGG than he did at VANQ.
As CEO of VANQ he inherited a £775m market Cap. Added £330m through a rights issue. Exited with a market cap of £325m ( £130m+ disappeared on his last day at the office) ie £780m of shareholder value disappeared on his watch. Less than a month later and VANQ shareholders are down a further £55m.
Within days of MLM being replaced as CEO the CFO was gone ‘for personal reasons’.
At VANQ Le May never committed to anything but bluffed his way with reassuringly positive statements mainly designed to meet the criteria of plausible deniability.
His record shouts LOSER.
I just looked at recent director deals activities on the HL website.
What a sea of red. All deals were sales and for substantial sums with the share price in the region of £6.80-7.10
https://www.hl.co.uk/shares/shares-search-results/i/ig-group-holdings-plc-ord-0.005p/director-deals
Directors are not feeling very confident on the outlook of the company, why a private investor should be?
I will hold off on this one, at least for now. I feel more pain is coming. The latest announcement on company performance was not as good as many think.
Plus the buybacks of course!!!! 😁
I’ve used IV platform for more than 5 years now and love its ease of use and breadth of markets plus very reasonable on trading costs. Also ranked No1 overall for trading platforms (here in the UK anyway). Touched strong resistance around 672p this morning for the third time in 6 months and with a great dividend, higher interest rates and trading volatility ahead (good for trading platforms as more trades generated which increases revenues) and a low P/E, what’s not to like!!! Plus more and more retail traders coming into the market everyday. GLA
How come the profits before tax didn't increase as much as I would expect after a 100 fold increase on interest earnings?
The contribution from the US market was up 50%. Yet there was a decrease in PBT.
Solid report card, IMO. Not all good, but satisfactory enough to my mind.
Just hope they do not look to make any further acquisitions with that excess cash (after dividends and buy backs) just to be seen to be doing something.
AAPL and BRK sit on a huge cash pile. Good enough a strategy for them, good enough for us (although naturally it would be nice to have their balance sheets!)
Worthy of a return to the mid 8's IMO, but cannot see 9's being hit without higher numbers and improving EPS - but I am a satisfactory holder at the time of print, taking everything into consideration from the update today. GLA.
Absolutely agree Matt, share price hasn't made sense here for years. I remain a significant holder and I expect not to trim my holding at all until the SP tops 900. I imagine I'll remain invested here to some degree indefinitely.
So as expected, interest income making a significant contribution to the overall results, but the key point is that trading revenue whilst a bit lower, was actually better than the competition. Also, what the market hasn't really appreciated is that they have returned over 10% of market cap in the form of dividends and share buybacks. This will rise to around 15% of mkt cap in the next 12 months given announced buyback and (slightly) increased dividend. I've always contended that this business is a cash flow monster, and at some point, the market will reward it!
Surely crazily cheep on a pe of about 7 and including a final dividend over 30p?
Sometimes the smallest bait can catch the biggest fish.
I have heard about some very very unusual experiences relating to some organisations in some sectors and responses varying from; can we WhatsApp you to we have no records of activity and communications.
Great news about the accessibility of WhatsApp by law enforcement.
Lets see some action regarding the sharing of peoples information by organisations.
Time to lift the veil of darkness, for too long now there has been corruption in this world.
Time for a reset.
2014 - 2022 dividend growth was 5.8% pa, and whilst I can only see the final dividend paid in 2013, it looks like 2014 was up about 20% on 2013. This means that the 10 year 6.88% pa div growth is entirely plausible. I don't dispute the 382m number, I think this might well be close to £1 per share once the 7% buyback is taken into account, now putting this cash flow monster on 6x earnings potentially yielding up to 7% with a divvy increase. Feels a pretty comfortable holding position as we await the strategy to pay off. Much lower than here, and the I think acquirers would begin circling.
Leapgrog,
I don't know where you get your data from but it could explain your "fair value" DCF valuation of £24.59!
"has never reduced its divi instead growing it at 6.44% average annual over 5-yrs" The dividend was 43.2p for 4 years (2018-2021) and raised a derisory 1p in 2022 to 44.2p, a CAGR of less than 1%. I can't be bothered to check your 10 year divi CAGR, but it won't be 7%.
"Debt to equity if 15%." IGG has no debt to equity ratio because it has a net cash position.
Highest analyst price is £12.50, lowest £6.67 - who is more accurate?
Analyst forecast net income to fall to £382M in 2023 from £504M in 2022.
The share price reflects the business, drifting ruderless.
AceOfClubs
The meme-stock bubble burst caused 20% of IG’s clients to leave, mostly in the recently acquired US business, Tastytrade. Most of those who left were the inexperienced novices and IG has been able to replace them to some extent with more experienced traders who trade frequently, making larger trades.
Although revenue increased 10%, this came also from interest on unreinvested cash, where from trading would be heathier.
Alas, the 10% extra revenue didn’t reach the bottom line as operating costs increased by 25%, due mainly to higher staff costs and foreign exchange movements. That left earnings flat - which isn’t that bad given the loss of so those meme-traders.
Looking ahead, recessions can be good for active traders - IG retains its medium-term growth targets of 5-7% for its core OTC business and 25-30% for Tastytrade and Spectrum Markets.
As a dividend stock, IGG offers a 6% yield, 2.16 cover, 46% payout and has never reduced its divi instead growing it at 6.44% average annual over 5-yrs and 7.06% over 10.
Debt to equity if 15%.
IGG has just appointed Adam Wheelwright as Its New Chief Technology Officer. The CEO June Felix has been a steady buyer over the last 12 months and has £119k of stock.
It is currently trading on a PE of 7.7 (its peers 18.6 - because of lower current expected earnings growth - but there is a major marketing campaign due H2. According to my DCF, IGG is 70% undervalued at £7.34 versus £24.59 fair value; or £23.09 if I value using DDF ie on divis (my methods...take care!). The seven analysts covering IGG are not really in agreement but on average give a one-yr share price expectation of £10.77 ie a 48% uplift.
Bit late to Q3's trading update party, but sharing my take anyway!
Revenue was clearly disappointing, especially given FX and interest rate tailwinds.
But on the flipside, there were temporary headwinds that shouldn't affect future quarters:
- December's World Cup knockout rounds involved US, Japan, Aus, UK and Europe, all major IGG markets. Some IGG punters will have partially switched to betting on the fubba, continuing in that vein over the xmas bank holidays, before hopefully returning to financial markets trading in January. Hence why December was a stinker.
- Q3 2022/23 had one fewer Wall Street trading day (60 days) compared to Q3 2021/22 (61), and three fewer than Q2 2022/23 (63).
The last trading update paragraph signposts, to me, a share buy back extension or special dividend later in the year:
"We continue to recognise significant headroom above the minimum capital requirement and the Board has
kept the capital allocation framework under continual review".
And the divi is covered 2+ times by profits, demonstrating scope to continue increasing in the medium term at their intended modest rate.
So FWIW, I'm a buyer at these levels and think June's strategic calls have actually been sound. She targeted the US and Japan as growth markets - to be fair it's difficult to think of larger, alternative growth markets in the world for IG, with accessible regulatory frameworks. So to keep IG progressing and growing for shareholders, she had to have a pop there.
It is fair to say TT needs to pull its finger out to address reduced trader numbers/activity from previous peaks, clearly a concern. Hopefully their new marketing campaign strikes a chord with punters, and they finally make it to Canada by the end of 2023. Although Canada timescales come with a pinch of salt, with ongoing regulatory delays and risks there.
Good luck all.
SBC
Nevertheless, good to see some inside buying just now. I am sure June bought a lot more in the past (cannot remember the specifics now, but remember at the time being impressed with the amount in the RNS) - but not pocket money either.
I agree that sometimes there is a fundamental disconnect between a company's share price and the intrinsic value, which sometimes leads to significant profit potential, when the market 'wakes up' to this. However, more frequently, and IMO in the case of IG right now, if the SP is languishing, it is for sound reasons. In this example, the significantly overpriced acquisition of TT. Which many of us pointed out at the time. Also operating costs, which could - and should - be addressed. Especially when it seems we are essentially carrying the TT burden. Until or unless TT becomes the type of profitable operation that June obviously thought/thinks it would be, then cost savings need to be made. Operating costs can increase again if needed, once the balance sheet is bulging and if a business case demonstrates the justification for this. This was not a company in distress which she took over, in which case more latitude could be justified. She is well paid and IMO got a plum job with a proven cash machine. It has not moved forward under her leadership. At least not yet, IMO. I think the SP reflects such sentiments. But I am once again a shareholder here and want to see it achieve its potential. Which I think it can, in spite of these setbacks, which is why I came back. Ultimately, my fear is complacency setting in, lower standards embedding and long term damage to the outfit. Which is totally avoidable and would be unforgivable.
I don’t understand why the next move of the share price should determine the effectiveness, or otherwise, of the management and company. The share price may go to 600 in the next two weeks. It could also go to 800. Would we praise June in the case of the rise, and lambast in the case of the fall?
Post-hoc rationalisation is too easy to fall into. TT was overpriced, I won’t argue that. It could still be profitable. I think operating costs are too high. But I also see huge net profits and revenue growth, and my feelings towards the company are not going to change just because the share price rises or falls this week, or next.
If it goes down, I’ll buy more. Nothing spooks me here right now. I may take some profit on the way up (I’m massively exposed here now), but fundamentally I hate judging the boards performance based on stock price, which is always at the whim of investors.
There are the 6's that I felt were nailed on. Took another baby tranche and may take a few more if/more likely when that 650-odd level is revisited. If that goes, IMO we are going way back to the 5's. And June's job should at that point be under threat, because that would be an appalling result, given what a sound cash machine she inherited when she took the top job. GLA.
Not a good day for a trading update with Credit Suisse roiling the markets. Seasoned IGG investors are used to these setbacks as we get these huge slumps in share price quite regularly. They say the definition of insanity is doing the same thing over and over again and expecting a different result. I suppose by that judgement I am insane to not sell these shares.
Those buy backs are giving this a bit of support. It's a shame they cannot instruct the broker to sell below a certain price, rather than presumably via a different method.
The more the price falls the more shares they can buy in the remaining share buy back period.
Always good to hear a wide range of differing opinions. It's what makes these chat boards enjoyable and informative. Part of my reason for rejoining as a shareholder is my belief that we are going to see an uptick in volatility (and therefore trading) in the months ahead. If this proves to be correct, it will hopefully offset some of the damage June has done here. Most of us seem to be, at best, underwhelmed with her performance thus far. I want to see some serious cost cutting if TT does not deliver material improvements in the next update. None of us have been fooled as to where things stand on that front right now. Just because (touch wood) the core business can probably continue to carry dead wood, does not mean it should. Failure to do so would mean that I would support the removal of June at that point. She and TT will have had long enough to deliver by then IMO.
Bid target at this level? If mgmt are as bad as people make out then new owners could replace them on day 1
Agreed gift of a buy as pe on reaffirmed consensus is below 8, volatility picking up massively and interest income on client cash is going up further. Tasty trade was horrible dilution given the massive pe paid for it, and the ceo should not be in place as a result, but let us just look at where we are now.