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(Alliance News) - IG Group Holdings PLC on Thursday reported a strong first quarter but saw new clients drop from the "exceptional" financial 2021 additions - yet still remain above pre-pandemic levels.
Shares in the London-based contracts-for-difference trading platform were 3.6% higher in London on Thursday morning at 861.50 pence each.
IG's adjusted net trading revenue, which removes the foreign exchange hedging gain associated with the financing of the tastytrade acquisition, was higher on the year before and up on the previous quarter.
In the three months to August 31, IG's first quarter, it recorded adjusted net trading revenue of GBP221.7 million, up from GBP209.0 million a year before and up from GBP214.1 million in the fourth quarter of financial 2021.
"tastytrade delivered another consecutive record quarter of revenue. In the approximately two month period since completion, it delivered revenue of GBP20.8 million. Excluding tastytrade, adjusted net trading revenue for the quarter was GBP200.9 million, 4% lower than Q1 FY21, reflecting anticipated moderation in trading activity," IG said. .
IG unveiled its acquisition of tastytrade, a US online brokerage and trading education platform, in early 2021.
The firm's OTC leveraged net trading revenue slipped 3% year on year to GBP188.3 million from GBP195.1 million, but this was offset by surging exchange-traded derivatives revenue, rising to GBP25.8 million from GBP6.3 million. Stock trading & investments trading revenue was flat at GBP7.6 million.
Total active clients ended the quarter at 287,200. Excluding tastytrade, active clients were up 12% at 225,900, coming from both elevated levels of client acquisition over the 12 month period and new client retention levels - which IG said is tracking in line with historical client cohorts.
IG noted it saw "moderation" in new client acquisition compared to the "exceptional" levels seen in financial 2021. It added 27,500 new clients in the first quarter, with only 21,900 added excluding tastytrade - which is a 37% slowdown year on year. IG did note, however, this still represents a 40% rise on its pre-pandemic quarterly average of 15,200.
"The strong business performance in the quarter reflects the size and quality of the group's active client base. The group remains confident of achieving its medium term targets for the Core Markets+ and High Potential Markets portfolios," IG added.
Seeking to keep up the pace of its own client acquisitions, IG rival CMC Markets PLC said Thursday it has added the Share Investing clients of Melbourne, Australia-headquartered financial services firm Australia & New Zealand Banking Group Ltd.
CMC will pay AUD25 million, about USD18.29 million, for over 500,000 ANZ Share Investing clients to transition to CMC - who have assets of over AUD45 billion.
CMC said it will use existing cash resources to pay for the deal.
"The transaction is another significant step in the ongoing diversification of the group's global business and in the Australian market at a time when we are seeing elevated demand for retail stockbroking services," CMC added.
The firm also noted the deal will bring an end to the white label technology partnership between the pair. CMC has been ANZ's trading technology partner since 2018 - bringing in GBP39.5 million in net trading revenue in financial 2021.
Chief Executive Peter Cruddas said: "This transaction is part of our strategy to create a non-leveraged investment platform and forms part of our longer-term goals for the company. As this new venture expands and develops, we will be able to offer more products, including third party funds and tax wrappers, directly to our clients.
"This is a further step towards the diversification of CMC's earnings and complements the launch of our new investment platform in the UK, aligning our business strategy across our core geographies."
Shares in CMC Markets were 1.1% higher in London on Thursday at 277.00 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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