Tastytrade acquisition continues to drive growth at IG Group in Q1

IG Group purchased the brokerage and investor education platform in June of last year, with this acquisition leading to a rise in revenue from high-potential markets around the world.

Total revenue for the three months to 31 August 2022 was £241.8m (€279.5m/$278.4m), up from £218.3m last year. IG Group noted the comparable figure from FY22 excluded £5.8m of foreign exchange hedging gain associated with the financing of the Tastytrade deal.

Of this total, £197.8m came from over-the-counter derivatives, up 5.1% year-on-year, while exchange trade derivatives revenue also climbed 38.3%. Interest income reached £7.1m, compared to a £200,000 loss last year, though stock trading and investment revenue fell 19.7% to £6.1m.

Revenue from core markets accounted for £200.3m of total revenue in the quarter, up 4.5% on last year. IG Group said this was particularly helped by growth in Japan, where revenue was 24.0% higher year-on-year, while it also reported higher revenue in the UK, Australia and emerging markets.

In terms of high potential markets, the addition of Tastytrade led to a 56.0% rise in revenue from £26.6m to £41.5m. Tastytrade was 62% higher, while IG Group also noted strong growth rates across its Spectrum and IG US businesses during Q1.

Total active clients across all markets and products stood at 279,300 which was in line with the previous year’s figure of 279,100, which the business said reflected the retention of the significantly increased number of active clients over the past two years.

In addition, IG Group onboarded 19,200 new clients in the period, down 26.7% from 26,200 last year. The business said this decline was anticipated and that the quality of new clients remained consistent with those onboarded in previous quarters.

The trading update comes after IG Group in July revealed its profits hit new heights during the financial year ended 31 May 2022. The results came alongside the announcement of a new shareholder distribution policy that included £150.0m in share buybacks.

As of 13 September, approximately 3.7 million shares had been re-purchased, at a cost of £30.2m. The programme is expected to be substantially completed before the end of FY23.

IG Group’s next market announcement will be the half year FY23 results, which are due to be released in January 2023.