This week IG Group (LSE: IGG) released results for the year ended 31 May 2017:
- Net trading revenue up 8% at GBP491.1 million
- Operating expenses up 14%, reflecting continued investment in effective marketing
- Profit before tax up 3% to GBP213.7 million; profit before tax margin 43.5% (FY16: 45.6%)
- Diluted EPS up 3% at 45.9 pence
- Final dividend of 22.88 pence per share; full year dividend up 2.9% to 32.3 pence per share
- New client numbers, defined as first trades, ahead of prior year by 38%; 15% in the OTC leveraged business
- Purchased and integrated the assets of DailyFX, a global retail FX research and education portal, for $40 million
- Continued progress in strategic evolution towards leadership in trading and investments
- Share dealing offer rolled out to Australia and France
- Launched a discretionary managed Investment service in the UK
- Limited Risk account, with no-negative guarantee, rolled out globally
- New platform released to all spread betting clients
Not bad for a business that could have been severely affected by proposed legislation/regulatory chanes to curtail CFD trading to private investors who seem to be losing their shirts.
But our tough little stock IG Group (LSE: IGG) came up trumps with their full year results:
It was an interesting and challenging year in terms of global news flow, especially in the political and regulatory sphere, but the year turned out to be one of the least volatile in financial markets for decades. Against this backdrop I am pleased that IG Group (LSE: IGG) once again delivered record revenue and profits.
Peter Hetherington, Chief Executive
Record revenue and profits.
As to the proposed regulatory changes Hetherington continued:
None of the recently announced regulatory changes have adversely impacted the business to date, and the current year has started well. The nature and timing of potential regulatory changes in the UK and some other key markets for the Group remain uncertain, and it is therefore difficult to predict what impact, if any, regulatory change may have on the Group this financial year and beyond. Actions have been taken to manage costs to allow for investments to be made in strategic initiatives without a significant increase in the fixed cost base. Operating costs excluding variable remuneration in FY18 are expected to remain at a similar level to FY17.
Although uncertainty still exists (hence why the share price still remains depressed) IG Group (LSE: IGG) is a well managed business that has already made provision for any adverse impact to it’s operations.
I’m holding for now check out the rest of the positions in the Shares and Stock Markets Portfolio.