IG Group reports strong year, launches £150m share buyback

Trading platform operator IG Group reported “another record performance” from continuing operations in its full-year results on Thursday, with net trading revenue rising 16% to £972.3m, as it kicked off a £150m share buyback.

The FTSE 250 company said that excluding the one-time hedging gain from the financing of the Tastytrade acquisition, adjusted net trading revenue was ahead 14% at £966.5m.

Adjusted total revenue, which includes interest on client money, was also up 14% to £967.3m, while total revenue grew 16% to £973.1m.

The firm’s total active client numbers increased 31% to 381,500, although active clients reduced 2% on a pro forma basis, but remained “significantly above” pre-pandemic levels.

First trades reduced as anticipated, but also remained “well above” pre-Covid levels, the board reported.

Profit before tax was up 7% to £477m, while adjusted profit before tax grew 4% to £494.3m.

IG said its strong revenue performance, combined with good cost control, delivered an adjusted profit before tax margin of 51%, which was down from 56% year-on-year.

The company said it maintained “strong” capital and liquidity positions that continued to support client growth, with regulatory capital resources of £1.03bn, rising from £860.7m.

Basic earnings per share fell to 92.9p from 99.8p, while adjusted basic earnings per share slipped to 96.3p from 107.3p, reflecting the share issue for the Tastytrade acquisition.

IG proposed a final dividend of 31.24p per share, representing a full-year dividend of 44.2p per share, up from 43.2p for the 2021 financial year, making for a resumption of progressive, sustainable dividends under the board’s new capital allocation framework.

The company also announced the launch of a share buyback programme of up to £150m, to be substantially complete in the current 2023 financial year.

IG said the sole purpose of the programme was to reduce share capital, adding that the first tranche would be for a maximum total value of £75m, to start on 21 July and end on or before 21 January.

The board said it intended to launch a further tranche of up to £75m later in the 2023 financial period.

“This year's record results show how we have achieved consistent, strong financial performance while we continue our journey to become a more diversified, innovative, global fintech,” said chief executive officer June Felix.

“Our forward-looking strategy has positioned us well to capitalise on a significantly larger total addressable market and to take advantage of the ongoing shifts towards self-directed investing.

“We are now operating on an entirely new scale.”

Felix said the company’s “outstanding performance” was due to several factors - its clients, its people, and its strategy.

“The quality and loyalty of our clients has generated sustainable revenue, providing a positive impact on our financial strength.

“This strength enables us to invest organically in key areas, expand regionally, create new products, and innovate strategically.

“Our new capital allocation framework crystallises our capital priorities to maintain a strong balance sheet, invest purposefully in our business, and meet the needs of key stakeholders.”

The board was “thrilled” to announce its new shareholder distribution policy, including a share buyback programme of up to £150m, June Felix added.

“I'm excited about our success and we are extremely positive about our future direction.

“We are seeing a materially evolved organisation as we expand our geographic footprint and grow our product offering.

“Overall, our results this year showcase that we are acting decisively and thoughtfully to support our key stakeholders today and tomorrow.”

At 1100 BST, shares in IG Group Holdings were up 5.34% at 749.51p.

Reporting by Josh White at Sharecast.com.