IG Group revenues boosted by market volatility

Online trading platform IG Group hailed "exceptionally high" trading volumes on Friday as it benefited from high levels of market volatility since the end of February due to the coronavirus pandemic.

The company said revenue in the first 36 trading days of the 61 in the fourth quarter of FY20 is estimated to be around £173m versus £139.8m in the third quarter and first-half revenue of £249.9m. IG said high levels of volatility have persisted through March and into April and it has continued to see high levels of client trading activity and further increases in the number of active clients.

"Revenue in any period is impacted by the level of financial market volatility and the extent to which clients identify opportunities to trade," IG said. "Financial market volatility has been sustained at exceptionally high levels since the last week of February 2020, and the group's clients have responded to the opportunities such market conditions present, and client trading volumes have been exceptionally high.

"The group’s revenue, which is driven by client transaction fees, has therefore also been exceptionally high during this period."

As a result of the solid revenue in the fourth quarter to date, IG expects the charge for variable remuneration in FY20 to be around £42m, compared to £25m the year before.

IG reiterated that it expects to maintain the 43.2p a share annual dividend until earnings allow the company to resume progressive dividends.

Chief executive officer June Felix said: "During such a prolonged period of volatility, we've seen high volumes of clients choosing to trade markets with IG, reflecting our business resilience, our robust systems and our commitment to delivering the best possible trading experience."