Finance

IG Group hails “another exceptional quarter” as revenue climbs 65% in Q3

| By Robert Fletcher
In a trading update, spread betting and contracts for difference (CFD) operator IG Group said total revenue for the three months through to 28 February amounted to £230.3m (€268.5m/$321.1m), up from £139.8m in the same period last year.
Finance growth

The operator said its performance was driven by a combination of sustained and elevated levels of trading from existing clients, as well as continued high levels of client acquisition, with a record 230,100 clients active in Q3, up 60% year-on-year.

Over-the-counter (OTC) leveraged revenue was 57% higher at £210.5m in Q3, while exchange traded derivatives revenue was up 40% to £5.4m. However, the most significant growth came within IG Group’s stock trading and investment, where revenue rocketed 619% to £14.4m.

Breaking down this performance further, IG Group said revenue from operations in core markets reached £192.7m, up 67% year-on-year, while the total number of active clients in these market reached 191,700.

Other revenue came from its ‘Significant Opportunities’ portfolio, where revenue was up 55% to £37.6m, largely driven by a 50% rise in active clients to 40,100.

IG Group did not disclose any further details of its financial performance in Q3, but chief executive June Felix said that the operator made progress towards delivering on a number of its strategic goals during the quarter.

“The continued performance from the Significant Opportunities portfolio has been remarkable, and we anticipate substantially achieving the revenue target of £160m one year ahead of plan,” Felix said.

“The group is also continuing to grow the size of its high quality and loyal client base which represents a long-term asset to the group.”

In terms of its year-to-date performance, group revenue in the nine months to 28 February was £647.1m, up 66% from £389.7m at the same point in the previous year.

OTC leveraged revenue was up by 61% year-on-year to £599.7m, while exchange traded derivatives revenue increased 51% to £17.7m and stock trading and investment 369% to £29.7m.

Core markets revenue hiked 64% to £533.2m, with 224,900 active clients, while Significant Opportunities portfolio revenue increased 77% to £113.9m, with 60,700 active clients.

“I would like to take this opportunity to thank our people for their continued hard work during the quarter,” Felix said. “Operationally, this has been one of the busiest periods in IG’s history, and our global workforce has responded with the kind of dedication, resilience and professionalism embedded in the IG culture.”

Meanwhile, IG Group also gave an update on its planned acquisition of brokerage and trading education platform Tastytrade.

Upon publishing its first-half results in January, IG Group revealed it had struck a deal to purchase Tastytrade for $1.0bn.

Tastytrade has two brands: media-focused Tastytrade, which offers education to traders about options and futures markets; and brokerage platform Tastyworks, which has 105,000 active accounts and makes up 1.3% of the entire US equity options market by trading volume.

IG Group said trading at Tastytrade was strong in Q3, with the Tastyworks arm accelerating its rate of active account growth in 2021 and reporting a 100% rise in the number of active trading accounts during February.

Tastytrade was able to grow its registrants by over 100,000 in the two months to the end of February to nearly one million.

IG Group has now secured certain regulatory approvals for the acquisition, with others pending, and hopes to complete the purchase in the first quarter of its 2022 financial year.

“Our planned acquisition of Tastytrade is progressing well and the outstanding client growth delivered in the period underlines the further, significant growth potential of this business,” Felix said.

“This accelerates our strategy to drive new sources of growth, while also expanding the group beyond its core OTC offering.”

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