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IG Group Holdings plc (LON:IGG), a leading player in the online trading industry, announced a revenue update for the three months ended February 29, 2024 (Q3 FY24). The company demonstrated resilience in a low-volatility environment, achieving key financial metrics that met or exceeded expectations.
Steady Revenue Growth
IG Group reported total revenue of £240.1 million in Q3 FY24, reflecting a slight increase compared to the previous quarter (£229.7 million) and remaining stable year-over-year (Q3 FY23: £239.3 million). This achievement is particularly noteworthy considering the lowest level of volatility witnessed in over five years.
Active Client Engagement for IG Group
Client engagement remained consistent for IG Group. The company saw a rise in active clients from Q2 FY24 (263,600) to 266,800 in Q3 FY24. While this figure is slightly lower compared to the prior year (Q3 FY23: 268,600), the decrease is minimal. The number of first-time trades also increased in Q3 FY24 (18,000) compared to Q2 FY24 (16,600) and surpassed the previous year (Q3 FY23: 17,400).
Record High Client Assets and Interest Income for IG Group
IG Group experienced a continued rise in total client assets, reaching a record high of £10.1 billion (up from £9.3 billion on November 30, 2023). This indicates strong client confidence in the platform. Additionally, client money balances remained stable compared to H1 FY24.
Interest income for the period reached £35.2 million, aligning with previous guidance. Notably, £19.1 million of this income originated from the US market.
tastytrade Delivers Record Performance
tastytrade, a subsidiary of IG Group, achieved another record-breaking quarter. The platform’s total revenue climbed to $62.6 million, representing an 8% increase from Q2 FY24 ($57.8 million) and a 15% year-over-year growth (Q3 FY23: $54.6 million). This growth reflects a surge in both trading revenue and interest income. In GBP terms, tastytrade’s revenue witnessed a 10% rise to £49.4 million (Q3 FY23: £44.9 million).
Despite a significant decrease in market volatility, IG Group successfully maintained a strong active client base. Year-to-date (YTD) figures for Q3 FY24 show a minimal decline of only 4% in active clients (323,100) compared to the same period in the previous year (335,400). Similarly, the number of first-time trades (51,800 YTD) displayed a modest decrease of 6% against Q3 FY23 YTD (54,900).
IG Group’s interest income generation also demonstrated significant growth. The company reported £105.4 million in interest income YTD, a substantial increase from the previous year (£50.1 million YTD). The US market played a key role in this growth, contributing £56.4 million to the total interest income earned YTD (Q3 FY23 YTD: £32.7 million).
tastytrade continued its impressive performance, generating a total revenue of $180.4 million YTD, a remarkable 24% increase compared to the prior year (Q3 FY23 YTD: $146.0 million). In GBP terms, this translates to a 17% year-over-year rise in revenue (£143.7 million YTD vs. £122.8 million YTD in Q3 FY23).
Looking Forward
In July 2023, IG Group announced a £250 million share buyback program anticipated for substantial completion within the current financial year. The company expects total Group revenue and adjusted profit before tax for FY24 to be in line with current market expectations.
IG Group’s performance in Q3 FY24 demonstrates the company’s ability to navigate challenging market conditions. The stable revenue growth, combined with the record-breaking performance of tastytrade, positions IG Group for continued success in the online trading industry.
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