(Alliance News) - IG Group Holdings PLC on Thursday reported a decline in first-half earnings, and it cautioned that unfavourable market conditions have continued in its third quarter.
Shares in IG dropped 8.3% to 710.90 pence each in London on Thursday morning, making it the worst performer in the FTSE 250 index.
The London-based trading platform said revenue in the first half ended November 30 declined 9.0% on-year to GBP472.6 million from GBP519.1 a year prior. Pretax profit fell 27% on-year to GBP176.4 million from GBP240.5 million.
Net trading revenue alone slumped 19% on-year to GBP402.4 million, as IG was hurt by a lack of volatility in markets.
"It's encouraging to see the benefits of our diversification strategy paying off, despite a mixed trading backdrop for our clients, driven by persistently low levels of market volatility in Q1 and Q2. While some of our businesses saw revenue weakness, others achieved strong results in the period. Our exposure to a wider range of revenue drivers will underpin further growth in the group as we deliver on our strategy," Acting Chief Executive Charlie Rozes said.
Breon Corcoran takes over as CEO later in January. Rozes will continue in the CFO post.
Active clients totalled 296,300, a year-on-year decline of 5.0% from 312,000.
IG lifted its interim dividend by 2.3% to 13.56 pence per share from 13.26p.
IG said the unfavourable market conditions seen in the first half has continued in the second. It still expects an adjusted pretax profit margin in the "mid-to-high 40s", noting its "active approach to cost management". Its adjusted pretax profit margin in the last financial year dipped to 48.0% from 51.1%.
In the half-year just gone, it fell to 43.5% from 50.2% a year prior.
Back in October, IG said it was taking steps to streamline its business, including cutting its worldwide headcount by 10%. It said it would lay off 300 staff members in a bid to save costs and become a "lean fintech company".
IG said the measures will result in structural cost savings of GBP50 million per year by its financial year ending May 2026.
By Eric Cunha, Alliance News news editor
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
IG (IGG)