TIDMIGG
RNS Number : 3134L
IG Group Holdings plc
18 July 2017
IG GROUP HOLDINGS PLC
Results for the year ended 31 May 2017
18 July 2017
IG Group Holdings plc ("IG", "the Group", "the Company"), a
global leader in online trading, today announces results for the
year ended 31 May 2017.
Financial Summary
-- Net trading revenue(1) 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(2) 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
Operating and Strategic Summary
-- 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
o Share dealing offer rolled out to Australia and France
o Launched a discretionary managed Investment service in the
UK
o Limited Risk account, with no-negative guarantee, rolled out
globally
o New platform released to all spread betting clients
-- Regulatory uncertainty created by a number of developments during the year
o IG is compliant with the results of consultations from BaFin
and the AMF
o FCA delayed final industry regulatory proposals in June 2017,
pending the outcome of ESMA's discussions
Peter Hetherington, Chief Executive, commented:
"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
once again delivered record revenue and profits.
The industry came under elevated regulatory scrutiny during the
year. At IG we are proud of our track record of compliance and our
culture of placing the client at the heart of our business. We try
to do what is right, not just what is possible under the rules. We
understand that leveraged trading products aren't right for
everyone, and we therefore believe that it is in the best interests
of many consumers to be prevented from accessing them. We seek to
only offer our products to an appropriate audience and consistently
innovate to improve client outcomes. IG's Limited Risk account,
where clients can never lose more money than they have on their
account, and their maximum risk per position is known, is a good
example of this type of innovation. A third of our new trading
accounts in the UK now use this feature.
Unfortunately client outcomes in the industry have suffered in
recent years - unsuspecting consumers have been bombarded by
providers who market the leveraged product to an inappropriate
audience, often using bonus offers to attract clients. This is
clearly wrong and we fully support regulators' attempts to stamp
out this behaviour. Our efforts are concentrated on ensuring that
appropriate clients can continue to trade on a level playing field.
IG will continue to carefully consider and improve its procedures
to ensure we either set or achieve industry best practice. We have
a very long history of engaging constructively and productively
with all our regulators and we look forward to continuing to do
so.
This external uncertainty is unsettling for our people and I am
proud of the way they have pulled together to accelerate the
differentiation of our offering. This has involved some difficult
choices, as we have reduced running costs to give us scope to
invest in strategic projects. As the original and the biggest firm
in our industry, I believe IG is well placed to evolve and prosper
and to continue to empower our clients to access opportunities in
financial markets."
All current financial results listed are for the year ended 31
May 2017. All general references to 'the prior period', 'the prior
year', and 'last year' mean the year ended 31 May 2016, unless
otherwise specified.
(1) Net trading revenue is trading revenue after deducting
introducing partner commissions. All references to 'revenue' in the
Group Performance and Operating and Financial reviews are made with
regards to net trading revenue.
(2) Profit before tax margin is profit before tax divided by net
trading revenue.
Financial summary
For the year ended 31 May 2017 FY17 FY16 Up/(Down) %
Net trading revenue (GBPm) 491.1 456.3 7.6%
Profit before taxation (GBPm) 213.7 207.9 2.8%
Profit after taxation (GBPm) 169.2 164.3 3.0%
Diluted earnings per share (pence) 45.9 44.6 2.9%
Total dividend per share (pence) 32.30 31.40 2.9%
Net own funds generated from operations (GBPm) 183.9 197.3 (6.8%)
Further information
IG Group FTI Consulting
Kieran McKinney Neil Doyle
Liz Scorer Edward Berry
020 7573 0026 / 0727 020 3727 1141 / 1046
investors@iggroup.com
Analyst presentation
There will be an analyst and investor presentation on the
results at 9:30am (UK Time) on Tuesday 18 July 2017 at IG Group,
Cannon Bridge House, 25 Dowgate Hill, London, EC4R 2YA.
The presentation will also be accessible live via audio webcast
at www.iggroup.com and via a conference call on the following
number:
All locations: +44 20 3059 8125
The audio webcast of the presentation and a transcript will be
archived at: www.iggroup.com/investors
Disclaimer - forward-looking statements and market abuse
regulations
This preliminary statement, prepared by IG Group Holdings plc
(the "Company"), may contain forward-looking statements about IG
Group Holdings plc and its subsidiaries (the "Group").
Forward-looking statements involve uncertainties because they
relate to events, and depend on circumstances, that will, or may,
occur in the future. If the assumptions on which the Group bases
its forward-looking statements change, actual results may differ
from those expressed in such statements. Forward-looking statements
speak only as of the date they are made and the Company undertakes
no obligation to update these forward-looking statements. Nothing
in this statement should be construed as a profit forecast. Some
numbers and period on period percentages in this statement have
been rounded or adjusted in order to ensure consistency with the
financial statements. This announcement contains inside
information, which is disclosed in accordance with the Market Abuse
Regulations.
All market share data has been provided by Investment Trends
Limited
-- Investment Trends UK Leveraged Trading Report released July
2017
IG empowers informed, decisive, adventurous people to access
opportunities in over 15,000 financial markets. With a strong focus
on innovation and technology, the company puts client needs at the
heart of everything it does.
IG's vision is to be a global leader in retail trading and
investments. Established in 1974 as the world's first financial
spread betting firm, it continued leading the way by launching the
world's first online and iPhone trading services.
IG is now an award-winning, multi-platform trading company, the
world's No.1 provider of CFDs* and a global leader in forex. It
provides leveraged services with the option of limited-risk
guarantees, and offers an execution-only share dealing service in
the UK, Australia, Germany, France, Ireland, Austria and the
Netherlands. IG has recently launched a range of affordable, fully
managed investment portfolios, to provide a comprehensive offering
to investors and active traders.
It is a member of the FTSE 250, with offices across Europe,
including a Swiss bank, Africa, Asia-Pacific, the Middle East and
the US, where it offers on-exchange limited risk derivatives via
the Nadex brand.
*Based on revenue excluding FX (from published financial
statements, October 2016)
Group Performance Review
The Company once again delivered record revenue in the twelve
month period, up 8% on the prior year to GBP491.1 million (2016:
GBP456.3 million) - a good performance in relatively quiet
financial markets. Profit before tax was ahead by 3% at GBP213.7
million (2016: GBP207.9 million). Operating expenses rose by 14%.
Excluding the impact of the acquisition of DailyFX in October 2016,
marketing investment, which continued to pay back very rapidly,
accounted for almost half of the absolute rise in expenses. Profit
after tax was GBP169.2 million, 3% ahead of the prior year (2016:
GBP164.3 million), assisted slightly by a fall in the Group's
effective tax rate to 20.8%, from 21.0% in the prior year.
Business Performance
In the principal product area, OTC leveraged trading, the
Company experienced good growth across all regions outside the UK.
The strongest relative performance came in EMEA, where revenue was
ahead of the prior year by 17%, with particular year-on-year
strength in Switzerland, Dubai and South Africa. Revenue in APAC
was ahead of the prior year by 9%. Client numbers were up in all
regions, with growth at a Group level averaging 7%. The number of
client first trades was also well ahead of the prior year, up by
15%.
The share dealing service, launched in the UK in 2014, grew well
in the period. It was launched in Australia in the middle of 2016
and grew well during the year in both countries. At the end of the
year, the Company had just over 20,000 clients holding positions,
up around 200% on the prior year.
In the US, Nadex continued to grow strongly. Group revenue from
the US was 26% ahead of last year, at GBP14.1 million. Ongoing
marketing success, the addition of further market makers and
technology improvements around latency and the mobile platform have
all delivered benefits.
Further detail of the regional performance is provided in the
Operating and Financial Review.
Business Development
The Company continued to make good strategic and operational
progress during the year.
The rollout of New Web Trading Platform began late in 2016 with
a trial for UK spread betting clients and has since progressed
well. This is now the default platform for UK spread bettors, with
more than half of all client desktop trades being placed here. The
CFD rollout will commence later this year in the UK and will be
extended to other countries by the end of 2017.
The Company relaunched its Limited Risk Account in July 2016,
which requires all clients using the account to cap the downside
risk of every trade, which avoids them ever having a negative
balance on their account. IG also only provides this type of
account for new clients with lower levels of appropriateness,
experience or wealth. In the last half of the year, around 28% of
all OTC leveraged first trades were Limited Risk.
The acquisition of DailyFX from FXCM for $40 million was
completed in October 2016. While the websites are delivering the
expected number of new leads, the rate of conversion into trading
clients has been lower than anticipated. However the accounts which
are opened have proved to be more valuable than expected. This
asset is likely to prove increasingly valuable in countries where
paid-for-marketing restrictions are put in place.
IG is in a period of rapid product transition. The Company
launched its discretionary managed investments service in the UK
towards the end of this financial year. Together with the share
dealing service, this is expected to be an effective means of
engaging and retaining valuable leveraged trading clients. The
number of clients using multiple products (a leveraged account and
a share dealing or investments account) more than doubled in the
period and there is early evidence that these clients trade more
actively, making them more valuable.
Leading the Way
IG takes its leadership position in the industry extremely
seriously and constantly assesses its self-imposed restrictions and
controls, which ensure access to complex financial products is only
provided to clients for whom they are appropriate. Just after the
end of the financial year, the Company carried out a full review of
its onboarding criteria and process. As a result of this, IG
altered various elements, including raising its self-imposed wealth
hurdles and its minimum deposit. IG has also created and rolled out
globally a new appropriateness test which means that prospective
clients who were previously allowed to proceed at their own risk
can no longer have a leveraged account with IG unless they can
demonstrate that they understand the potential risks and rewards of
such an account. This is a clear example of IG doing the right
thing to ensure fair client outcomes and going beyond what is
demanded by regulation. As a result of these actions, the Company
expects to recruit fewer clients, of greater average value, and so
may see a fall in simple measures of market share.
In June 2017 the Company developed and communicated internally
and externally its updated purpose, vision and values - these
define clearly why IG exists, clarify its ambitions and lay out a
set of values by which the employees and business operate, which
align with the culture of the organisation. The values are:
Champion the client; Lead the way, and: Love what we do. These
values centre on delighting the client and ensuring everything is
designed to ensure fair outcomes at every stage. IG's business
model ensures the Company's fortunes are aligned with those of its
clients.
Regulation
The retail leveraged trading industry is under scrutiny
globally, with particular emphasis currently in the UK and Europe.
This new level of scrutiny is overdue and IG believes that a well
thought through update to regulation should be beneficial for
clients - if it is proportionate, consistent and properly enforced.
IG has differentiated itself within the industry through its
adherence to the highest regulatory standards and its focus on fair
outcomes for clients. However, too many providers have been allowed
to enter this industry in recent years, many of which have behaved
very badly and targeted clients for whom such a product is entirely
inappropriate. This has been exacerbated by an influx of entirely
illegal providers, based in offshore regimes and using the
uncontrollable nature of the internet to take advantage of
unsophisticated or unwary individuals through misleading
advertising. These companies have often provided a single product,
the up/down binary option, using high pressure sales practices.
This combination of poorly regulated and illegal providers has
often left the impression that the entire industry is at fault and
made it very difficult for compliant providers, such as IG, to make
their voices heard. In order to improve outcomes for clients, the
Company believes it is vital that regulators support and work with
companies like IG to remove or greatly reduce the impact of these
illegal and the poorly supervised providers.
In recent months, IG has been even more active in liaising with
regulators to assist them in their efforts to improve outcomes for
clients across the world. There are a number of reviews either
complete or ongoing in countries where IG has either a presence or
a material degree of business.
In Australia, the Government and regulator are proceeding to
better protect client money - in the way that IG always has - and
to provide additional powers of intervention on financial products
provided to retail. IG welcomes both of these measures. In Dubai
the regulator, the DFSA, has indicated an intention to alter the
current regime surrounding leveraged products. IG has assisted the
considerations of the DFSA and the outcomes are expected to be
announced in the near future. The Company does not believe its
activities are the subject of regulatory concern and so does not
expect the changes to materially impact its operation in Dubai.
In Europe the regulatory situation is complex and in transition.
IG is working with National Competent Authorities (NCAs) in several
countries and has also been in discussion with the European
Securities and Markets Association (ESMA) and shared its concerns
about the divergence of regulation across the EU. Consultations in
France and Germany have been finalised and the outcome of a
requirement to provide an account which limits the downside for
clients fits with the leadership position IG took last year and
enhances IG's competitive position in these countries. The result
of the consultations in The Netherlands and Ireland have not yet
been announced.
In December 2016, in the UK, the FCA announced its intention to
enhance conduct of business rules for firms providing contract for
difference products to retail clients, and detailed a very specific
set of proposals. Following an announcement by ESMA in June 2017,
the FCA decided to delay making final rules until ESMA finalises
its discussions. ESMA announced it is in the process of discussing
the possible use of its product intervention powers under Article
40 of MiFIR, the possible content of any such measures, and how
they could be applied. Measures being discussed include leverage
limits, guaranteed limits on client losses, and restrictions on the
marketing and distribution of these products.
The Company believes a common set of regulations across the EU
provides a greater chance of successfully protecting consumers
against poor behaviour in the industry. Any inconsistency in the
application of regulatory standards in the EU region only creates
arbitrage opportunities for ill-intentioned providers to take
advantage of less sophisticated consumers. IG will continue to
engage actively with NCAs and ESMA to seek to establish a set of
rules which improve consumer outcomes and protect competition.
In its engagement to date, IG has provided consistent advice to
individual NCAs and to ESMA. IG believes the correct response needs
to be broad and properly enforced. IG sees five main areas where
regulators are expressing concern and suggesting the need for
remedies:
- Marketing. Regulators are seeking to ensure the product is
marketed only to the correct audience, with an appropriate risk
warning, including the probability of trading successfully. This
would also outlaw sports sponsorship. IG fully supports this
development.
- Bonus offers. There is a movement to ban account opening bonus
offers. IG does not offer these and fully supports this
development.
- Appropriateness. There already exists an obligation to assess
whether a product is appropriate for a prospective client. However,
under current MiFID guidance, firms are allowed to warn prospective
clients that the product is inappropriate but allow them to proceed
to trading. The ESMA Q&A makes it clear that a prospective
client should not be allowed to proceed where the product is deemed
inappropriate. IG does not take on inappropriate clients and fully
supports this development.
- No negative protection. Certain NCAs have mandated only
offering accounts to retail clients where the client cannot lose
more money than they have deposited on their account. ESMA has
indicated this may form part of its future guidance. IG already
offers this option and fully supports this development.
- Leverage. There already exists an obligation to act in the
best interests of a client. Given this, it is already impossible to
justify high levels of leverage where the significance of the
transaction fee can skew the client's probability of success. IG
does not offer any products with this characteristic. However,
there is pressure from certain regulators to explicitly cap
leverage levels. With the caveat that any mandated leverage caps
should aim solely to resolve the probability issue, IG fully
supports this development.
Potential regulatory impact and actions being taken
IG's UK and EU OTC leveraged revenue last year of GBP330 million
included GBP78 million from products and clients for which it is
anticipated any regulatory impact would be minimal - equities
trading, where leverage levels are low, corporate clients and
non-resident clients. Therefore, around half of Group revenue will
be unaffected by the proposals being discussed by regulators across
the EU.
A potentially significant mitigating factor to the impact of any
regulatory restrictions on retail clients, would be qualifying
clients electing to take on a professional status in order to
continue to trade as before. To qualify, a client must pass two of
the three tests defined under MiFID - sufficient trading
experience, a substantial investment portfolio, relevant
occupational experience. As has always been the case, the Company's
revenue is relatively concentrated towards the most active end of
the client base. In the last year, 80% of the Group's revenue
(excluding the US) was generated by less than 9% of clients. The
vast majority of IG's top 9% of clients have a recent trading
history which would suggest they should pass the sufficient trading
experience test. In addition, a recent independent survey found
that approximately 15% of IG's clients have a financial instrument
portfolio of a sufficient size to pass the second test. These
statistics underline the journey the Group has been on for a number
of years to focus on serving the upper end of the OTC leveraged
trading market. The Company cannot be sure of the degree of overlap
between these groups of clients, and it is not possible to
determine how many eligible clients would choose to be classified
as professional.
For clients who would not be able to, or who choose not to, take
on professional status, it is not possible to determine how they
would respond to regulatory restrictions on their activities.
Overall, IG clients with open positions are leveraged under 10
times. This calculation compares client cash on accounts with open
positions to the total size of those notional trading positions and
makes no allowance for the very different levels of leverage in the
various asset types. Many of the Group's clients, however,
currently have excess cash on their account compared to the trading
margin required, and could choose to continue to trade with less
headroom. Some clients may choose to increase the cash on their
account to maintain their headroom. Other clients may choose to
utilise their share portfolio held with IG as collateral. It is
likely that some clients will simply constrain their trading, or
open an account with a less constrained provider, although an EU
wide harmonised approach to regulation reduces that risk.
IG has commenced work on developing a multi-lateral trading
facility (MTF) to serve the European market. This on-exchange
offering could provide further protection for IG's business across
Europe and increase the opportunity for further growth in this
region. There can be no certainty of success here.
The Group is planning for the UK's exit from the EU, and good
progress is being made in securing regulatory approval for a
subsidiary based in the EU. The Group is also at the early stages
of exploring further opportunities outside the EU.
In the Company's experience, when tighter regulation has been
applied appropriately, client outcomes have improved, the industry
has become more sustainable, and more compliant providers have
benefitted over the longer term.
Dividend
In line with the previously stated intention to pay out, as an
ordinary dividend, approximately 70% of the Group's annual
earnings, the Board is recommending a final dividend of 22.88 pence
per share, taking the full year dividend to 32.30 pence per share,
2.9% ahead of the prior year.
Outlook
IG will continue to lead the way in the industry with respect to
how it markets its services, how it deals with clients, and through
the products and levels of client service it offers. IG believes in
doing the right thing, rather than simply complying with minimum
regulatory requirements. The Company is taking measures to further
differentiate itself within its core OTC leveraged derivatives
trading environment, and will continue to improve the transparency
of its products, and extend its geographic footprint in order to
maintain and extend its competitive advantage. The recent product
extension into share dealing and investments sets IG further apart
from the competition and extends the loyalty of the current client
base.
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.
IG is better placed than most, if not all, providers in the
industry to both influence and respond to regulatory change. The
Company will continue to engage fully with regulators, to seek to
achieve the best possible outcomes for current and future clients
of this industry, and the greatest long term value for shareholders
of the Company.
Operating and Financial Review
With the increasing geographic and product diversity of IG's
business and following a management realignment, the make-up of the
segments reported on for FY17 have been adjusted. This reflects the
information format that management review for the purposes of both
allocating resources and assessing performance, and includes
increased disclosure around the share dealing and investments
business. For further details and a restatement of prior years'
segments please refer to note 3 to the financial statements and the
additional information section at the end of the preliminary
announcement.
Reporting Segment % %
Revenue (GBPm) Change(1) Clients ('000s) Change
----------------------------- ----------- --------
FY17 FY16 FY17 FY16 Revenue
per client(1)
----------------------------- -------- ------- ----------- -------- -------- --------
UK 223.0 222.3 0.3% 64.7 59.9 8% (7%)
-----------------------------
EMEA 137.5 117.3 17% 45.9 41.6 10% 6%
-----------------------------
APAC 114.1 104.7 9% 37.4 36.4 2.8% 6%
Leverage OTC 474.6 444.3 7% 148.0 137.9 7% (0.5%)
----------------------------- -------- ------- ----------- -------- -------- -------- ---------------
US 14.1 11.2 26% 22.3 15.2 47% (14%)
-----------------------------
Share Dealing & Investments 2.4 0.8 187% 20.4 6.7 203% (5%)
-----------------------------
Multi-Product Clients - - - (5.0) (2.4) 112% -
Group 491.1 456.3 8% 185.8 157.5 18% (9%)
----------------------------- -------- ------- ----------- -------- -------- -------- ---------------
(1) The financial tables above contain numbers which have been
rounded, while all year-on-year percentages are calculated off
underlying unrounded numbers.
The backdrop this year was dominated by significant political
events, including the UK's EU Referendum in June, the US
Presidential election in November and elections in key European
countries in the second half of the year. However, the uncertainty
these events created was not reflected in the financial markets,
which, outside the specific events, displayed low levels of
volatility. Although annual revenue was split almost equally
between the two halves of the year, the quarterly performance was
more variable. A weak first quarter, was followed by a record
second quarter (GBP133.4 million). The second half of the year also
started quietly and recovered in the final quarter, with client
trading levels peaking around the French and German elections.
UK
OTC leveraged revenue in this region grew 0.3% to GBP223.0
million (FY16: GBP222.3 million) and represented 45% of group
revenues. Active client numbers were up by 8% to 64,725 (FY16:
59,940). As previously outlined, the UK, due to the large installed
client base that comes with the most mature market, responds more
to volatility, both negatively and positively. In the quiet
markets, this, along with the heavy client acquisition around the
UK's EU Referendum and the US Presidential election, meant that
average revenue per client was down by 7% to GBP3,446 (FY16:
GBP3,710).
An annual study of the UK's retail leveraged trading industry
was released in July 2017. The survey concluded that, although the
retail leveraged trading market remains niche, the number of
traders grew to 148,000 (2016: 138,000 - restated). The survey
showed that IG's primary market share of spread bettors fell
slightly, from 46% to 45%, and its primary share of CFD traders
fell from 27% to 24%. The measurement of primary market share is
based on an estimate of the number of primary accounts, excluding
partner agreements, and makes no allowance for client value,
therefore drawing precise conclusions about the share of total
market revenue is difficult.
EMEA
OTC leveraged revenue grew 17% to GBP137.5 million in FY17
(FY16: GBP117.3 million), which equates to 28% of the group
revenue. Active client numbers rose 10% to 45,903 (FY16: 41,566)
and revenue per client was up 6% to GBP2,997 (FY16: GBP2,821).
This region divides into two broad areas when analysing
performance. Like the UK, the EU-based offices are more mature and
generate a slower rate of growth than the newer, non-EU offices of
Dubai, South Africa and Switzerland. In the non-EU offices, where
the regulatory environment appears more stable, revenue almost
doubled to GBP30.7 million. Active client numbers were also up in
these countries by 22% and revenue per client rose by 59%.
APAC
OTC leveraged revenue in FY17 grew by 9% to GBP114.1 million,
against a prior year of GBP104.7 million. This was driven by a 3%
growth in clients to 37,392 (FY16: 36,364) and a 6% rise in revenue
per client to GBP3,051. Revenue in the second half of the year was
5% ahead of the first half.
US
Revenue grew 26% over the period to GBP14.1 million (FY16:
GBP11.2 million). Active member numbers were up by 47% and revenue
per client was down by 14%.
Share dealing and Investments
Share dealing is now active in IG's two largest markets of the
UK and Australia, and is also offered in Austria, France, Germany,
Ireland and the Netherlands. This is an important strategic product
line for the business which further engages our current client
base.
Total client numbers in the year were up around 200% on FY16 at
20,417 (FY16: 6,748). Revenue and first trades were also up by
around 200% to GBP2.4 million and 18,188 respectively. This is
partly down to ongoing growth in the UK and partly to the launch in
Australia in July 2016.
The IG Smart Portfolio product was launched in the UK in April
2017, in partnership with BlackRock. This products seeks to take
advantage of the growing market for low cost passive portfolio
investment products and is based on BlackRock ETFs.
Financial Review
Summary group income statement
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
---------------------------------------------- ------------- -------------
Net trading revenue 491.1 456.3
Net interest on segregated client funds 4.0 3.4
Betting duty and financial transaction taxes (7.5) (11.2)
Other operating income 1.9 0.6
---------------------------------------------- ------------- -------------
Net operating income 489.5 449.1
Operating expenses (276.1) (241.5)
---------------------------------------------- ------------- -------------
Operating profit 213.4 207.6
Net finance income 0.3 0.3
Profit before taxation 213.7 207.9
Profit before taxation margin 43.5% 45.6%
Taxation (44.5) (43.6)
---------------------------------------------- ------------- -------------
Profit for the year 169.2 164.3
---------------------------------------------- ------------- -------------
Diluted earnings per share 45.9p 44.6p
---------------------------------------------- ------------- -------------
Total dividend per share 32.3p 31.4p
============================================== ============= =============
Net Operating Income
Net operating income increased by 9% to GBP489.5 million (2016:
GBP449.1 million) reflecting the 8% growth in net trading revenue,
and a reduction in betting duties reflecting lower client losses on
spread betting contracts. The long term average for betting duties
as a percentage of net trading revenue is around 2%. Net interest
income on segregated client funds increased by GBP0.6 million to
GBP4.0 million (2016: GBP3.4 million) driven by increases in the
amount of client money held.
Operating expenses
Operating expenses increased by 14% to GBP276.1 million (2016:
GBP241.5 million).
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
Employee remuneration costs - fixed 95.5 83.3
Employee remuneration costs - variable 23.6 30.2
Advertising and marketing 64.5 49.7
Depreciation and amortisation 16.4 12.7
Irrecoverable VAT and other sales taxes 14.1 11.2
Regulatory fees 2.3 5.7
Other costs 59.7 48.7
276.1 241.5
============= =============
Employee remuneration costs
Fixed employee remuneration costs increased by 15% to GBP95.5
million (2016: GBP83.3 million). This reflects an 8% increase in
average headcount and a 6% increase in average cost per head. The
increase in average headcount reflects investment in client service
roles, the additional headcount associated with DailyFX, and the
dual running of teams during the process of offshoring functions to
the Group's resource hub in Poland. The increase in the average
cost per head reflects the introduction of flexible benefits, the
impact of salary benchmarking, and the increase in the GBP
equivalent cost of non-UK staff due to the weakening of GBP
compared with most other currencies relative to FY16. Variable
employee remuneration costs reduced by 22% due to lower
discretionary bonus payments for staff for FY17 compared to those
made for the prior year.
Year ended Year ended
31 May 2017 31 May 2016
Average headcount 1,522 1,412
Year-end headcount 1,546 1,408
Advertising and marketing costs
Advertising and marketing costs increased by 30% to GBP64.5
million (2016: GBP49.7 million). The Group has continued to manage
its external marketing spend to drive client recruitment whilst
keeping acquisition cost per client flat. The cost per first trade
in FY17 (excluding Nadex clients, and including irrecoverable VAT)
was GBP1,172 (2016: GBP1,205).
Depreciation and amortisation
Depreciation and amortisation increased by GBP3.7m to GBP16.4
million (2016: GBP12.7 million). The increase includes the GBP1.9
million amortisation of the investment in DailyFX, which delivers
market leading education, research, analysis and news focused on
the FX markets and which is a key part of our future marketing
strategy. In addition, the charge in FY17 includes GBP1.6 million
relating to the write down of leasehold improvements and fixtures
and fittings as a result of the office refurbishment that took
place during the year.
Irrecoverable VAT and other sales taxes
The Group does not recover all of the input VAT and other sales
taxes it incurs on its costs, and the GBP14.1 million charge in
FY17 reflects the amounts not recovered. The increase in
irrecoverable VAT and sales taxes reflects the increase in costs in
the year on which VAT and other sales taxes are charged,
predominantly marketing and advertising costs.
Regulatory fees
The Group is charged regulatory fees by the various regulators
in the jurisdictions in which it operates, and in addition, is
required to make a contribution to the Financial Services
Compensation Scheme (FSCS) in the UK. The GBP3.4 million reduction
in the cost of regulatory fees reflects the rebate the Group
received during FY17 relating to FSCS levies paid in prior years,
and the benefit from the actual FSCS levy for 2016 which was
charged in FY16 being lower than the cost accrued. The charge for
regulatory fees is expected to revert to the normal level in
FY18.
Other costs
The GBP11.0 million increase in other costs to GBP59.7 million
reflects changes as follows:
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
Premises-related costs 13.2 12.1
Telephone and data 2.0 1.7
IT Maintenance and support 12.2 9.7
Market data 9.7 7.9
Legal and professional costs 8.0 6.8
Net charge for impaired trade receivables 3.0 1.6
Payment card charges 2.2 0.4
Other costs 9.4 8.5
59.7 48.7
============= =============
The higher IT maintenance and support costs reflects investments
made in data security and IT infrastructure. The higher market data
costs reflects the growth in client numbers. The higher payment
card charges is due to the increased volume of card payments by
clients.
Taxation
The effective rate of tax for the year ended 31 May 2017 was
20.8%, slightly lower than the effective rate of 21.0% for the
prior year. The effective rate of tax has continued to benefit from
the reduction in the standard rate of UK corporation tax, which
reduced from 20% to 19% on 1 April 2017.
The vast majority of the Group's taxable profit arises in the
UK. An analysis of the tax charge by geographic segment is shown in
Note F of the "Other Information" section of the Financial
Statements. The Group's effective rate of tax remains dependent on
the mix of taxable profit by geography, the availability and use of
taxable losses, and the tax rates levied in those geographies. The
Group's current estimate of the effective rate of tax for the year
to 31 May 2018 is 20.5%.
The calculation of the Group's tax charge involves a degree of
estimation and judgement, in particular with respect to certain
items whose tax treatment cannot be finally determined until
agreement has been reached with the relevant tax authority.
Diluted earnings per share
Diluted earnings per share of 45.9 pence for the year to 31 May
2017 is 3% higher than the 44.6 pence for the year ended 31 May
2016. Diluted earnings per share is used as a primary measure of
profitability and as a financial measure in relation to the
Executive Director and senior management share plans.
Dividend policy
The business continues to be highly cash-generative and the
Board seeks to reflect this in the direct cash returns to
shareholders. IG has a progressive dividend policy and it remains
the Board's intention to pay out, as an ordinary dividend,
approximately 70% of Group post-tax earnings. Accordingly, the
Board is recommending a final dividend of 22.88 pence per share,
giving a full-year dividend of 32.3 pence per share, 3% higher than
the 31.4 pence per share paid for the year to 31 May 2016,
reflecting the increase in post-tax earnings.
Cash generation, investments and dividends
The Group uses own funds, and net own funds, generated from
operations as its key measures of cash generation. The make-up of
own funds is shown on the balance sheet in Note A, and the own
funds cash flow is shown in Note C, of the "other information"
section of the financial statements.
Cash generation remains strong. Own funds generated from
operations of GBP229.2 million (2016: GBP239.8 million), compares
with operating profit of GBP213.4 million (2016: GBP207.6 million),
with a cash conversion rate, calculated as own funds generated from
operations divided by operating profit, of 107% (2016: 116%). The
reduction in the conversion rate reflects the reduction in year end
bonus accruals at 31 May 2017 compared with
the prior year end. The Group continues to benefit from a net credit balance in working capital.
Capital expenditure in the year of GBP17.1 million includes
GBP7.6 million relating to the purchase and development of
intangible assets during the year, including the new web trading
platform, and new financial systems to improve the control
environment for cash and client money, and GBP10.5 million on
tangible assets including GBP2.8 million for the office
refurbishment in London, and GBP6.3 million for new and replacement
IT hardware.
During the year the Group purchased the assets of DailyFX, a
leading global news and research portal, from FXCM Inc. for $40.0
million (GBP32.7 million), with $4.0 million (GBP3.3 million) of
this amount deferred for a year.
Dividend payments to shareholders during the year to 31 May 2017
of GBP118.7 million comprise the final dividend for the year to 31
May 2016 of GBP84.1 million, and the interim dividend for the year
to 31 May 2017 of GBP34.6 million.
The final dividend for the year to 31 May 2017 of GBP83.9
million will, if approved, be paid in October 2017.
The group's own funds of GBP614.3m at the end of the year are
GBP26.6 million higher than at the end of the prior year reflecting
the GBP17.8 million own funds cash flow after investments and
dividends, and GBP8.8 million of FX translation benefit reflecting
the increased GBP equivalent value of own funds in non-UK
businesses.
Liquidity
The Group's total liquid assets at the end of year were GBP731.4
million (2016: GBP626.7 million). The increase in liquid assets
reflects the increase in own funds, and the increase in client
funds on the balance sheet to GBP117.1 million at 31 May 2017 from
GBP39.0 million at 31 May 2016. Client funds on the balance sheet
includes GBP60.0 million (2016: GBP25.5 million) deposited by
clients under title transfer arrangements, and GBP57.1 million
(2016: GBP13.5 million) of client deposits with IG Bank SA, the
Group's subsidiary in Switzerland. The Group does not currently use
any of the Swiss Bank deposits for liquidity purposes, and all the
clients' deposits in Switzerland are held in bank accounts in that
country.
The Group's primary requirement for liquidity is for the margin
it is required to deposit with its hedging brokers. The average
broker margin requirement in FY17 was GBP286 million, GBP73 million
higher than in FY16, with a peak broker margin requirement of
GBP367 million during the year. At 31 May 2017 the actual broker
margin requirement was GBP356 million (2016: GBP228 million).
The Group has access to a committed revolving credit facility of
GBP160 million to assist in liquidity risk management. The Group
draws down on its RCF during periods when broker margin is at
elevated levels and in advance of events that could result in an
elevated broker margin requirement, in order to reduce liquidity
risk. During the year, the facility was partly drawn down ahead of
three political events - the EU referendum on 23 June 2016, the US
Presidential elections on 8 November 2016 and the Italian
referendum on 4 December 2016. These precautionary drawdowns were
repaid after the event. In June 2017 the group renewed the GBP160
million RCF with a syndicate of four UK banks. Of the GBP160
million, GBP60 million is available for three years and GBP100
million for 12 months.
Segregated client funds
At 31 May 2017 the Group held GBP1,215.3 million (2016: GBP917.3
million) of client money in segregated trust bank accounts, and
GBP499.8 million (2016: GBP177.8 million) of client assets in third
party custodian accounts.
These amounts are segregated client money and assets and are
therefore excluded from the balance sheet.
Regulatory capital resources
The calculation of the Group's consolidated capital resources,
and capital ratio is shown in note E of the "other information"
section of the financial statements. The Group's capital ratio -
resources as a percentage of the total requirement was 26.7% as at
31 May 2017, compared with the minimum ratio for the Group of
18.7%. The Group continues to have sufficient capital headroom.
Impact of changes in foreign currency exchange rates
IG offers its clients opportunities to trade in over 15,000
markets. Our clients have the opportunity to gain exposure to these
markets in the natural currency of that market or, in many cases,
their account currency. The Group hedges its exposure to the
underlying markets and to currencies. The Group's trading revenue
from OTC leveraged derivatives is the aggregate of the transaction
fees on many millions of individual client trades net of the
transaction fees on hedging the exposures which are also
denominated in a number of currencies. These transactions are
almost all booked in entities whose functional currency is GBP. It
is impractical to isolate the effect that changes in foreign
currency exchange rates has on the Group's GBP reported
revenue.
Around one third of the Group's operating expenses are incurred
in currencies other than GBP. Although it is possible to identify
the effect that changes in foreign currency exchange rates has on
the GBP reported costs, as it is not practical to do so on revenue,
the Group accepts that it manages its earnings in GBP, and reports
on and explains its results accordingly.
Consolidated income statement
for the year ended 31 May 2017
Year ended Year ended
31 May 2017 31 May 2016
Note GBPm GBPm
-------------------------------------------------------------- ----- ------------- -------------
Trading revenue 518.7 487.9
Introducing partner commissions (27.6) (31.6)
Net trading revenue 2 491.1 456.3
Betting duty and financial transaction taxes (7.5) (11.2)
Interest income on segregated client funds 4.6 3.8
Interest expense on segregated client funds (0.6) (0.4)
Other operating income 1.9 0.6
-------------------------------------------------------------- ----- ------------- -------------
Net operating income 489.5 449.1
Operating expenses 4 (276.1) (241.5)
-------------------------------------------------------------- ----- ------------- -------------
Operating profit 213.4 207.6
Finance income 1.7 2.0
Finance costs (1.4) (1.7)
-------------------------------------------------------------- ----- ------------- -------------
Profit before taxation 213.7 207.9
Taxation 5 (44.5) (43.6)
-------------------------------------------------------------- ----- ------------- -------------
Profit for the year and attributable to owners of the parent 169.2 164.3
============================================================== ===== ============= =============
Earnings per ordinary share:
* Basic 6 46.2p 44.9p
* Diluted 6 45.9p 44.6p
Notes 1 to 13 are an integral part of this preliminary
announcement.
Consolidated statement of comprehensive income
for the year ended 31 May 2017
Year ended Year ended
31 May 2017 31 May 2016
------------------------------------------------------------------ --------------- ---------------
GBPm GBPm GBPm GBPm
Profit for the year and attributable to owners of the parent 169.2 164.3
Other comprehensive (expense)/income:
Items that may be reclassified to the income statement:
Change in value of available-for-sale financial assets (note 12) (0.2) (0.1)
Foreign currency translation income 14.7 4.5
------------------------------------------------------------------ ------- ------ ------- ------
Other comprehensive income for the year, net of tax 14.5 4.4
------------------------------------------------------------------ ------- ------ ------- ------
Total comprehensive income for the year 183.7 168.7
------------------------------------------------------------------ ------- ------ ------- ------
Total comprehensive income attributable to owners of the parent 183.7 168.7
================================================================== ======= ====== ======= ======
All items of other comprehensive income or expense may be
subsequently recycled to the income statement.
The items of comprehensive income noted above are stated net of
related tax effects (31 May 2017 and 31 May 2016: GBPnil).
Notes 1 to 13 are an integral part of this preliminary
announcement.
Consolidated statement of financial position
at 31 May 2017
31 May 2017 31 May 2016
Note GBPm GBPm
----------------------------------- ----- ------------ ------------
Assets
Non-current assets
Property, plant and equipment 17.4 13.0
Intangible assets 8 156.7 125.1
Financial investments 12 52.4 25.0
Deferred income tax assets 9.1 7.2
----------------------------------- ----- ------------ ------------
235.6 170.3
----------------------------------- ----- ------------ ------------
Current assets
Trade receivables 9 357.5 278.5
Prepayments and other receivables 12.2 12.4
Cash and cash equivalents 10 230.9 218.8
Financial investments 12 92.0 111.0
----------------------------------- ----- ------------ ------------
692.6 620.7
----------------------------------- ----- ------------ ------------
TOTAL ASSETS 928.2 791.0
=================================== ===== ============ ============
Liabilities
Current liabilities
Trade payables 117.3 43.4
Other payables 62.5 70.8
Income tax payable 5 13.1 13.8
----------------------------------- ----- ------------ ------------
192.9 128.0
----------------------------------- ----- ------------ ------------
Non-current liabilities
Redeemable preference shares - -
----------------------------------- ----- ------------ ------------
Total liabilities 192.9 128.0
----------------------------------- ----- ------------ ------------
Equity
Share capital - -
Share premium 206.8 206.8
Other reserves 123.1 102.2
Retained earnings 405.4 354.0
----------------------------------- ----- ------------ ------------
Total equity 735.3 663.0
----------------------------------- ----- ------------ ------------
TOTAL EQUITY AND LIABILITIES 928.2 791.0
=================================== ===== ============ ============
Notes 1 to 13 are an integral part of this preliminary
announcement.
This preliminary announcement was approved by the Board of
Directors on 18 July 2017 and signed on its behalf by:
Paul Mainwaring
Chief Financial Officer
Consolidated statement of changes in equity
for the year ended 31 May 2017
Share capital Share premium Other reserves Retained earnings Total
GBPm GBPm GBPm GBPm GBPm
----------------------------- ---------------- -------------- --------------- ------------------ --------
At 1 June 2015 - 206.8 91.8 292.8 591.4
Profit for the year and
attributable to the owners
of the parent - - - 164.3 164.3
Other comprehensive income
for the year - - 4.4 - 4.4
----------------------------- ---------------- -------------- --------------- ------------------ --------
Total comprehensive income - - 4.4 164.3 168.7
----------------------------- ---------------- -------------- --------------- ------------------ --------
Equity-settled employee
share-based payments - - 7.0 - 7.0
Tax deduction benefit on - - - - -
share-based payments
recognised directly in
equity (note 5)
Purchase of own shares - - (1.0) - (1.0)
Equity dividends paid - - - (103.1) (103.1)
----------------------------- ---------------- --------------
Movement in equity - - 10.4 61.2 71.6
----------------------------- ---------------- -------------- --------------- ------------------ --------
At 31 May 2016 - 206.8 102.2 354.0 663.0
----------------------------- ---------------- -------------- --------------- ------------------ --------
Profit for the year and
attributable to the owners
of the parent - - - 169.2 169.2
Other comprehensive income
for the year - - 14.5 - 14.5
----------------------------- ---------------- -------------- --------------- ------------------ --------
Total comprehensive income - - 14.5 169.2 183.7
----------------------------- ---------------- -------------- --------------- ------------------ --------
Equity-settled employee
share-based payments - - 7.7 - 7.7
Tax deduction benefit on
share-based payments
recognised directly in
equity (note 5) - - 0.7 - 0.7
Purchase of own shares - - (1.1) - (1.1)
Equity dividends paid - - - (118.7) (118.7)
Dividends paid on own shares
held in trust - - (0.9) 0.9 -
----------------------------- ---------------- -------------- --------------- ------------------ --------
Movement in equity - - 20.9 51.4 72.3
----------------------------- ---------------- -------------- --------------- ------------------ --------
At 31 May 2017 - 206.8 123.1 405.4 735.3
============================= ================ ============== =============== ================== ========
There are no non-controlling interests.
Notes 1 to 13 are an integral part of this preliminary
announcement.
Consolidated cash flow statement
for the year ended 31 May 2017
Year ended Year ended
31 May 2017 31 May 2016
Note GBPm GBPm
-------------------------------------------- ----- ------------- -------------
Operating activities
Cash generated from operations 11 224.1 227.1
Income taxes paid (45.3) (42.5)
Net cash flow generated from operating
activities 178.8 184.6
-------------------------------------------- ----- ------------- -------------
Investing activities
Interest received 2.0 1.1
Purchase of property, plant and equipment (10.6) (5.1)
Payments to acquire and develop intangible
assets (36.3) (8.6)
Net cashflow from (purchase)/sale of
financial investments (8.8) 2.1
Net cash flow used in investing activities (53.7) (10.5)
-------------------------------------------- ----- ------------- -------------
Financing activities
Interest paid (1.4) (1.3)
Equity dividends paid to owners of the
parent 7 (118.7) (103.1)
Purchase of own shares (1.1) (1.0)
-------------------------------------------- ----- ------------- -------------
Net cash flow used in financing activities (121.2) (105.4)
-------------------------------------------- ----- ------------- -------------
Net increase in cash and cash equivalents 3.9 68.7
Cash and cash equivalents at the beginning
of the year 218.8 148.8
Impact of movement in foreign exchange
rates 8.2 1.3
Cash and cash equivalents at the end
of the year 10 230.9 218.8
============================================ ===== ============= =============
Notes 1 to 13 are an integral part of this preliminary
announcement.
Notes to the preliminary results for the year ended 31 May
2017
1. Basis of preparation
The financial information in this announcement is derived from
IG Group Holdings plc's group financial statements but does not,
within the meaning of Section 435 of the Companies Act 2006,
constitute statutory accounts for the years ended 31 May 2016 or 31
May 2017. The financial statements are prepared on a going concern
basis and the accounting policies are consistent with the Group's
2016 Annual Report.
Although the financial information has been prepared in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS), this
preliminary statement does not itself contain sufficient
information to comply with IFRS. The Group will publish full IFRS
compliant group financial statements in August 2017 and statutory
accounts for 2017 will be delivered to the Registrar of Companies
following the company's Annual General Meeting on 21 September
2017.
The Group's auditors, PricewaterhouseCoopers LLP, have reported
on those financial statements and the report was unqualified, did
not emphasise any matters nor contained any statements under
Section 498(2) or (3) of the Companies Act 2006.
Copies of full group financial statements will be posted to all
shareholders in August 2017. Further copies will be available, from
the date of posting, from the Group's Headquarters, Cannon Bridge
House, 25 Dowgate Hill, London, EC4R 2YA, by telephone on 020 7896
0011 or via the Group's corporate website at www.iggroup.com.
Critical accounting estimates and judgments
The preparation of financial statements requires the group to
make estimates and judgments that affect the amounts reported for
assets and liabilities as at the year-end, and the amounts reported
for revenues and expenses during the year. The nature of estimates
means that actual outcomes could differ from those estimates.
In the Directors' opinion, the accounting estimates or judgments
that have the most significant impact on the presentation and
measurement of items recorded in the financial statements are the
following:
(a) Consideration as to whether the group's purchase of DailyFX
(a leading global FX related news and research website and selected
associated assets, refer to note 8) was a business combination or
an asset purchase. Determining whether the purchase is a business
combination or an asset is a matter of judgment.
The purchase included the website together with its historical
content and lead list. In order to enable lead capturing and to
re-establish the DailyFX Plus facility, which captures details on
new subscribers, the infrastructure necessary for operating and
integrating the website needed to be rebuilt. A number of the
DailyFX staff were offered and subsequently accepted roles with IG.
Therefore whilst inputs had been acquired, the processes that IG
would ultimately benefit from had to be recreated and rebuilt or
separately acquired. Accordingly, the group accounted for the
transaction as an asset purchase as not all the requirements for a
business combination were met.
In addition, the assessment of the useful economic life of the
assets acquired is judgmental. In line with the group's accounting
policy for domain names and generic top level domains, the
principal intangible asset arising from the purchase of the DailyFX
assets will be amortised over ten years.
(b) The assessment of the useful economic life of the group's
internally developed and acquired software, licenses, domain name
and generic top-level domain based intangible assets is judgmental
and can change due to obsolescence as a result of unforeseen
technological developments, and other factors. The useful life for
licenses represents management's view of the expected term over
which the group will receive benefits from the software, and does
not exceed the licence term. For internally developed and acquired
software and domain assets the life is based on historical
experience with similar products as well as anticipation of future
events which may impact their useful economic life (refer to note
8).
(c) The calculation of the group's current corporation tax
charge involves a degree of estimation and judgment with respect to
certain items whose tax treatment cannot be finally determined
until resolution has been reached with the relevant tax authority.
Amounts to be paid/received may ultimately be materially different
than the amounts already accounted for and could therefore impact
the overall profitability and cash flows of the group in future
periods (refer to note 5).
(d) The measurement of the group's net trading revenue
predominantly reflects transactions that have settled in cash and
accordingly involves little judgment. However, the calculation of
the segmental net trading revenue involves the use of an allocation
methodology determined by management, as the group manages risk and
hedges on a group-wide portfolio basis. This allocation methodology
does not impact the overall group net trading revenue
disclosed.
2. Net trading revenue
Net trading revenue represents trading revenue after deducting
introducing partner commissions, and is analysed as follows:
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
OTC leveraged derivatives:
Indices 205.6 226.7
Commodities 66.3 36.0
Equities 76.4 67.4
Foreign exchange 82.3 77.4
Options 44.0 36.8
474.6 444.3
Exchange traded derivatives 14.1 11.2
Share dealing and investments 2.4 0.8
------------- -------------
Total net trading revenue 491.1 456.3
============= =============
The group does not derive more than 10% of net trading revenue
from any one single client.
3. Segment information
The Executive Directors are the group's chief operating
decision-maker (CODM). Management has determined the operating
segments based on the information reviewed by the Executive
Directors for the purposes of allocating resources and assessing
performance.
During the year, the management structure of the group has
evolved and the CODM now receive information from the business on a
different basis to previous years. Accordingly, the segmental
reporting for the comparative year has been restated.
The Executive Directors continue to consider the business
performance principally from a geographic perspective, but now as
the United Kingdom (UK), Europe, Middle East and Africa (EMEA),
Asia Pacific (APAC) and the United States of America (US):
- The UK segment comprises the group's local trading activities in the United Kingdom.
- The EMEA segment comprises the group's local trading
activities in Ireland, France, Germany, Italy, Luxembourg, Spain,
Sweden, Switzerland, United Arab Emirates and South Africa.
- The APAC segment comprises the group's local trading
activities in Australia, Singapore and Japan.
- The US segment comprises the group's local trading activities in the US.
The UK segment derives its net trading revenue from OTC
leveraged derivatives, share dealing, and investments. The EMEA and
APAC segments derive their net trading revenue from OTC leveraged
derivatives and share dealing. The US segment derives its net
trading revenue from exchange traded derivatives.
Segment net trading revenue is stated after deducting
introducing partner commissions as this is consistent with the
management information received by the Executive Directors.
Net trading revenue from OTC leveraged derivatives is reported
by segment reflecting the location of the office that manages the
underlying client relationship and represents an allocation of the
net trading revenue that the Group generates from clients' trading
activity.
The Executive Directors review segment contribution as the
measure of segment profit or loss. Segment contribution is segment
net trading revenue less direct costs, which are reported by
segment reflecting the costs that are directly related to
activities within that region or controlled by management in that
region.
The Group manages market risk and a number of other activities
on a group-wide portfolio basis and accordingly a large proportion
of costs are incurred centrally. These central costs are not
allocated to individual segments for decision making purposes for
the CODM and accordingly these costs have not been allocated to
segments.
Capital expenditure is predominantly managed centrally and
depreciation and amortisation is not allocated to individual
segments for decision making and accordingly has not been allocated
to segments.
3. Segment information (continued)
Year ended 31 May 2017 UK EMEA APAC US Central Total
GBPm GBPm GBPm GBPm GBPm GBPm
Segment net trading revenue 225.0 137.7 114.3 14.1 - 491.1
Betting duty and financial
transaction taxes (6.9) (0.6) - - - (7.5)
Interest income on segregated
client funds - - - - 4.6 4.6
Interest expense on segregated
client funds - - - - (0.6) (0.6)
Other operating income - - - - 1.9 1.9
Net operating income 218.1 137.1 114.3 14.1 5.9 489.5
-------------------------------- ------- ------- ------- ------- -------- --------
Direct costs (49.8) (54.2) (28.3) (15.2) - (147.5)
Segment contribution 168.3 82.9 86.0 (1.1) 5.9 342.0
Central costs (112.2) (112.2)
Depreciation and amortisation (16.4) (16.4)
Operating profit 213.4
Net finance income 0.3
--------
Profit before taxation 213.7
========
Year ended 31 May 2016 (restated) UK EMEA APAC US Central Total
GBPm GBPm GBPm GBPm GBPm GBPm
Segment net trading revenue 223.1 117.3 104.7 11.2 - 456.3
Betting duty and financial
transaction taxes (10.5) (0.7) - - - (11.2)
Interest income on segregated
client funds - - - - 3.8 3.8
Interest expense on segregated
client funds - - - - (0.4) (0.4)
Other operating income - - - - 0.6 0.6
Net operating income 212.6 116.6 104.7 11.2 4.0 449.1
Direct costs (45.9) (47.4) (20.9) (10.4) - (124.6)
----------------------------------- ------- ------- ------- ------- -------- --------
Segment contribution 166.7 69.2 83.8 0.8 4.0 324.5
Central costs (104.2) (104.2)
Depreciation and amortisation (12.7) (12.7)
Operating profit 207.6
Net finance income 0.3
--------
Profit before taxation 207.9
========
4. Operating expenses
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
Employee remuneration costs are as follows:
Wages and salaries and other pension costs (in relation to defined contribution
schemes) 95.5 83.3
Equity-settled share-based payment awards and related social security costs 7.5 8.3
Performance related bonus and related social security costs 16.1 21.9
------------- -------------
119.1 113.5
------------- -------------
Advertising and marketing 64.5 49.7
Premises-related costs 13.2 12.1
Telephone and data 2.0 1.7
IT Maintenance and support 12.2 9.7
Market data 9.7 7.9
Legal and professional costs 8.0 6.8
Regulatory fees 2.3 5.7
Net charge for impaired trade receivables 3.0 1.6
Irrecoverable VAT and other sales taxes 14.1 11.2
Payment card charges 2.2 0.4
Other costs 9.4 8.5
Depreciation and amortisation 16.4 12.7
276.1 241.5
============= =============
Included in premises-related costs is operating lease rentals for office space of GBP6.9 million
(2016: GBP6.1 million).
5. Taxation
Tax on profit on ordinary activities
Tax charged in the income statement:
Year ended Year ended
31 May 2017 31 May 2016
Current income tax: GBPm GBPm
UK Corporation tax 40.5 41.0
Non-UK Corporation tax 3.2 3.5
Adjustment in respect of prior years 2.0 (0.9)
------------- -------------
Total current income tax 45.7 43.6
Deferred income tax:
Origination and reversal of temporary differences (0.8) (0.2)
Adjustment in respect of prior years - 0.3
Impact of change in tax rates on deferred tax (0.4) (0.1)
Total deferred income tax (1.2) -
Tax expense in the income statement 44.5 43.6
============= =============
Tax not credited to income statement:
------
Tax deduction on share-based payments recognised (0.7) -
directly in equity
======
Reconciliation of the current total tax charge
The standard rate of corporation tax in the UK changed from 20%
to 19% with effect from 1 April 2017. Accordingly, the effective
rate of corporation tax for the year ended 31 May 2017 is 19.83%
(year ended 31 May 2016: 20%). Taxation outside the UK is
calculated at the rates prevailing in the relevant jurisdictions.
The tax expense in the income statement for the year can be
reconciled as set out below:
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
Profit before taxation 213.7 207.9
============= =============
Profit multiplied by the UK standard rate of corporation
tax
of 19.83% (2016: 20.00%) 42.4 41.6
Expenses not deductible for tax purposes 0.4 0.3
Timing differences not yet recognised in respect 1.0 -
of share payments
Higher taxes on overseas earnings 0.5 1.4
Recognition of deferred tax assets (1.8) -
Adjustment in respect of prior years 2.0 (0.6)
Impact of change in tax rates on deferred tax (0.4) 0.1
Deferred tax not recognised on current year tax
losses 0.4 0.8
Total tax expense reported in the income statement 44.5 43.6
============= =============
The effective tax rate is 20.81% (2016: 21.00%).
Factors affecting the tax charge in future years
Factors that may affect the group's future tax charge include
the geographic location of the group's earnings, the tax rates in
those locations, changes in tax legislation, future planning
opportunities, the use of brought-forward tax losses and the
resolution of open tax issues. The calculation of the group's total
tax charge involves a degree of estimation and judgment with
respect to the recognition of deferred tax assets and of certain
items whose tax treatment cannot be finally determined until
resolution has been reached with the relevant tax authority. The
Group has made tax payments in respect of the potential tax
liability that may arise on these unresolved items, however, the
amount ultimately payable may be materially lower than the amount
already paid and could therefore improve the overall profitability
and cash flows of the group in future periods.
Reconciliation of current corporation tax liability
The movement in the current corporation tax liability included
in the statement of financial position is as follows:
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
At the beginning of the year 13.8 13.1
* Income statement charge 45.7 43.6
* Payments (45.3) (42.5)
(0.3) -
* Tax credit directly to equity
* Research and development expenditure credit (0.4) (0.4)
(0.4) -
* Impact of movement in foreign exchange rates
------------- -------------
At the end of the year 13.1 13.8
============= =============
6. Earnings per ordinary share
Basic earnings per share is calculated by dividing the profit
for the year attributable to ordinary equity holders of the parent
by the weighted average number of ordinary shares in issue during
the year, excluding shares held as own shares in Employee Benefit
Trusts. Diluted earnings per share is calculated using the same
profit figure as that used in basic earnings per share and by
adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive ordinary shares
arising from share schemes.
The following reflects the income and share data used in the
earnings per share computation:
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
Earnings attributable to owners of the parent 169.2 164.3
============= =============
Weighted average number of shares:
Basic 366,441,640 365,620,585
Dilutive effect of share-based payments 2,442,663 2,910,404
------------- -------------
Diluted 368,884,303 368,530,989
============= =============
Year ended Year ended
31 May 2017 31 May 2016
Basic earnings per share 46.2p 44.9p
Diluted earnings per share 45.9p 44.6p
------------- -----------------------
7. Dividends paid and proposed
Year ended Year ended
31 May 2017 31 May 2016
GBPm GBPm
Proposed final dividend for 2017 at 22.88p per
share (2016 final paid: 22.95p) 83.9 84.0
Interim dividend for 2017 at 9.42p per share
(2016: 8.45p) 34.6 30.9
------------- -----------------
118.5 114.9
============= =================
Dividend payout ratio 70% 70%
The final dividend for 2017 of 22.88p per share amounting to
GBP83.9 million was proposed by the Board on 18 July 2017 and has
not been included as a liability at 31 May 2017. This dividend will
be paid on 27 October 2017, following approval at the Company's
AGM, to those members on the register at the close of business on
29 September 2017.
8. Intangible assets
Development Software
Goodwill Domain names costs and licences Total
GBPm GBPm GBPm GBPm GBPm
Cost:
At 31 May 2015 107.1 7.3 15.1 17.8 147.3
Additions - 0.6 4.8 3.1 8.5
Impact of movement in foreign
exchange rates - 0.2 - 0.1 0.3
At 31 May 2016 107.1 8.1 19.9 21.0 156.1
Additions - 33.1 5.7 1.9 40.7
Impact of movement in foreign
exchange rates 1.0 (1.3) - 0.2 (0.1)
At 31 May 2017 108.1 39.9 25.6 23.1 196.7
--------- ------------- ------------ -------------- ----------
Accumulated amortisation:
At 31 May 2015 - 1.2 6.0 16.1 23.3
Provided during the year - 3.4 2.5 1.6 7.5
Impact of movement in foreign
exchange rates - - - 0.2 0.2
At 31 May 2016 - 4.6 8.5 17.9 31.0
Provided during the year - 2.4 4.2 1.9 8.5
Impact of movement in foreign
exchange rates - 0.4 - 0.1 0.5
At 31 May 2017 - 7.4 12.7 19.9 40.0
--------- ------------- ------------ -------------- ----------
Net book value - 31 May
2017 108.1 32.5 12.9 3.2 156.7
========= ============= ============ ============== ==========
Net book value - 31 May
2016 107.1 3.5 11.4 3.1 125.1
========= ============= ============ ============== ==========
Net book value - 31 May
2015 107.1 6.1 9.1 1.7 124.0
========= ============= ============ ============== ==========
Goodwill primarily relates to the purchase of IG Group plc by IG
Group Holdings Limited.
Domain names include the cost of acquiring ig.com and a suite of
complementary domains to support the group's global brand. Included
within the amount provided during the year ended 31 May 2016 is
GBP2.7 million relating to the impairment of industry specific
generic top level domains.
On 31 October 2016 the group completed the purchase of DailyFX,
a leading global news and research portal, from FXCM Inc. for a
total consideration of $40.0 million (GBP32.7 million), with $4.0
million (GBP3.3 million) of this amount deferred for up to 12
months.
DailyFX, through a series of global websites, delivers
market-leading education, research, analysis and news, focused
predominantly on the FX markets. The group believes this
transaction will significantly enhance its ability to acquire new
clients and to engage with and improve the retention rates of its
current clients.
In line with the group's accounting policy for domain names and
generic top level domains, the intangible asset arising from the
purchase of DailyFX is amortised over ten years.
Development costs relate to internally generated intangible
assets.
Software and licences relate entirely to external purchases of
off-the-shelf commercially available software for internal
consumption within the group.
9. Trade receivables
31 May 2017 31 May 2016
GBPm GBPm
Amounts due from brokers 313.0 245.5
Own funds in client money 43.4 30.8
Amounts due from clients 1.1 2.2
------------ --------------
357.5 278.5
============ ==============
Amounts due from brokers represent balances with brokers where
the combination of cash held on account and the valuation of
financial derivative open positions results in an amount due to the
group. In addition to the GBP313.0 million (2016: GBP245.5 million)
the group had GBP63.2 million (2016: GBP53.4 million) of UK
Government Securities held as collateral at brokers.
Included within amounts due from brokers is GBP11.9 million (31
May 2016: GBP3.2 million) related to amounts held on Bitcoin
exchanges and in third party vaults.
Own funds in client money represents the group's own cash held
in segregated client funds, in accordance with the UK's Financial
Conduct Authority (FCA) 'CASS' rules and similar rules of other
regulators in whose jurisdiction the group operates and includes
GBP12.7 million (31 May 2016: GBP1.5 million) to be transferred to
the group on the following business day.
Amounts due from clients arise when a client's total funds
deposited with the group are insufficient to cover any trading
losses incurred or when a client utilises a trading credit limit,
stated net of an allowance for impairment.
10. Cash and cash equivalents
31 May 2017 31 May 2016
GBPm GBPm
Cash and cash equivalents 230.9 218.8
------------ ------------
Cash and cash equivalents includes:
-- title transfer funds held by the group under a title transfer
collateral arrangement (TTCA) under which a client agrees that full
ownership of such monies is unconditionally transferred to the
group of GBP60.0 million (31 May 2016: GBP25.5 million); and
-- client monies deposited with the group's Swiss banking
subsidiary, IG Bank SA, of GBP57.1 million (31 May 2016: GBP13.5
million).
To ensure effective management of the group's cash resources,
all of the Company's cash and cash equivalents are swept to another
group company each day and accordingly the Company holds no cash at
year end.
11. Cash generated from operations
31 May 2017 31 May 2016
GBPm GBPm
Operating activities
Operating profit 213.4 207.6
Adjustments to reconcile operating profit to
cash generated from operations:
Depreciation 7.9 5.2
Amortisation 8.5 7.5
Non-cash foreign exchange losses in operating
profit - 3.0
Share-based payments charge 7.7 7.0
(Increase) in trade and other receivables (78.6) (29.5)
Increase in trade and other payables 65.2 26.3
Cash generated from operations 224.1 227.1
============ ============
12. Financial investments
Financial investments are UK Government securities as
follows:
31 May 2017 31 May 2016
GBPm GBPm
Liquid asset buffer 81.2 82.6
Collateral at brokers 63.2 53.4
------------ ------------
144.4 136.0
============ ============
Split as:
* Non-current portion 52.4 25.0
* Current portion 92.0 111.0
------------ ------------
144.4 136.0
============ ============
Certain UK Government securities are held by the Group in
satisfaction of the FCA requirements to hold a "liquid asset
buffer" against potential liquidity stress under BIPRU 12.
During the year ended 31 May 2017 the Group purchased UK
Government Gilts for GBP120.4 million (year ended 31 May 2016:
GBP61.3 million) and disposed of gilts for GBP112.4 million (year
ended 31 May 2016: GBP34.5 million).
The effective interest rates of securities held at the year-end
range from 0.03% to 0.59% (2016: 0.33% to 1.01%).
Financial investments are shown as current assets when they have
a maturity of less than one year and are held as
'available-for-sale'. The fair value of securities held is based on
closing market prices at the year end as published by the UK Debt
Management Office.
13. Subsequent events
In June 2017 the group renewed its GBP160.0 million revolving
credit facility from a syndicate of four UK banks. This facility
has two tranches, a GBP100.0 million tranche available for up to a
1 year term (with an option to extend for a further year) and a
GBP60.0 million tranche available for up to 3 years.
A final dividend of 22.88p per share amounting to GBP83.9
million was proposed by the Board on 14 July 2017.
Other information (unaudited)
The following supplemental notes provide additional analysis to
aid the readers' understanding of this preliminary statement:
A. Balance sheet
31 May 2017 31 May 2016
GBPm GBPm
------------------------------------------ ------------ ------------
Intangible assets arising on acquisition 108.1 107.1
Other intangible assets 48.6 18.0
Property plant and equipment 17.4 13.0
------------------------------------------ ------------ ------------
Fixed assets 174.1 138.1
------------------------------------------ ------------ ------------
Liquid assets buffer 81.2 82.6
Amounts held at/due from brokers 376.1 298.9
Cash in IG bank accounts 230.9 218.8
Own funds in client money 43.2 26.4
------------------------------------------ ------------ ------------
Liquid assets 731.4 626.7
Client funds on balance sheet (117.1) (39.0)
Own funds 614.3 587.7
------------------------------------------ ------------ ------------
Working capital (49.1) (56.2)
Tax payable (13.1) (13.8)
Deferred tax assets 9.1 7.2
NET ASSETS/SHAREHOLDERS' FUNDS 735.3 663.0
========================================== ============ ============
B. Client funds and assets
Segregated client funds comprise individual client funds held in
segregated client money accounts or money market facilities
established under the UK's Financial Conduct Authority (FCA) 'CASS'
rules and similar rules of other regulators in whose jurisdiction
the group operates. Such monies are not included in the group's
statement of financial position.
31 May 2017 31 May 2016
GBPm GBPm
Segregated client funds 1,215.3 917.3
Segregated client assets 499.8 177.8
Total segregated client funds and assets 1,715.1 1,095.1
============ ============
In addition, the group's Swiss banking subsidiary, IG Bank SA,
is required to protect customer deposits under the FINMA Privileged
Deposit Scheme. At 31 May 2017, IG Bank SA was required to hold
GBP16.5 million (31 May 2016: GBP7.0 million) in satisfaction of
this requirement. This amount is included in cash and cash
equivalents on the statement of financial position.
C. Own funds
31 May 2017 31 May 2016
GBPm GBPm
------------------------------------------ ------------ ------------
Own funds flow:
Operating profit 213.4 207.6
Depreciation and amortisation 16.4 12.7
Share based payments 7.7 7.0
Movement in working capital (8.3) 12.5
------------------------------------------- ------------ ------------
Own funds generated from operations 229.2 239.8
Income tax paid (45.3) (42.5)
------------------------------------------- ------------ ------------
Net own funds generated from operating
activities 183.9 197.3
Interest received 2.0 1.1
Interest paid (1.4) (1.3)
Purchase of DailyFX (29.8) -
Purchase of other capital expenditure (17.1) (13.7)
Purchase of own shares (1.1) (1.0)
------------------------------------------- ------------ ------------
Net own funds generated before dividends 136.5 182.4
Dividends (118.7) (103.1)
Increase in own funds 17.8 79.3
=========================================== ============ ============
Own funds at start of the year 587.7 507.1
Impact of movement in foreign exchange
rates 8.8 1.3
Own funds at end of the year 614.3 587.7
=========================================== ============ ============
D. Liquidity
31 May 2017 31 May 2016
GBPm GBPm
-------------------------------------- ------------ ------------
Liquid assets 731.4 626.7
Broker margin requirement (356.3) (227.6)
Non-UK liquid assets (134.6) (64.3)
Own funds in client money (43.2) (26.4)
--------------------------------------- ------------ ------------
Total available liquidity at the end
of the year 197.3 308.4
--------------------------------------- ------------ ------------
Of which is:
Held as liquid asset buffer 81.2 82.6
Final dividend due 83.9 84.1
Additional sources of liquidity
* Undrawn committed RCF 160.0 160.0
--------------------------------------- ------------ ------------
E. Regulatory capital
Group consolidated capital resources (audited)
31 May
31 May 2017 2016
GBPm GBPm
Shareholders' funds 735.3 663.0
----------------------------------- ------------ --------
Less foreseeable declared
dividends (83.9) (84.0)
Less acquisition intangibles (108.1) (107.1)
Less other intangible assets (48.6) (18.0)
Less deferred tax assets (9.1) (7.2)
----------------------------------- ------------ --------
Capital resources (audited) A 485.6 446.7
Group consolidated capital
requirement (unaudited)
---------------------------------- ----------- -------- --------
Capital resources A 485.6 446.7
---------------------------------- ----------- -------- --------
Pillar 1 Risk Exposure Amounts
(REA)
---------------------------------- ----------- -------- --------
Total Pillar 1 REA B 1,817.3 1,568.4
---------------------------------- ----------- -------- --------
Capital ratio A/B=C 26.7% 28.5%
Required capital ratio
---------------------------------- ----------- -------- --------
Pillar 1 minimum D 8.0% 8.0%
Individual Capital Guidance
(ICG) E 9.4% 5.0%
---------------------------------- ----------- -------- --------
ICG requirement D + E = F 17.4% 13.0%
plus combined buffer requirement G 1.3% 0.6%
---------------------------------- ----------- -------- --------
Total requirement % F+G =H 18.7% 13.6%
================================== =========== ======== ========
Total requirement - GBPm H x B = I 339.8 213.3
Capital headroom - GBPm A - I 145.7 233.4
---------------------------------- ----------- -------- --------
The Group is required to hold a minimum amount of regulatory
capital in accordance with the Individual Capital Guidance ('ICG')
periodically determined by the FCA based on their supervisory
review and evaluation process ('SREP') of the Group, plus an amount
equal to the higher of the internally calculated Capital Planning
Buffer and the combination of the Conservation and Countercyclical
buffers. The FCA determine the ICG following review of the Group's
Internal Capital Adequacy Assessment Process through which the
Group calculates the amount of capital that should be held against
specific firm risks, in addition to the Pillar 1 requirements.
The FCA last undertook a SREP of IG Group in the first half of
calendar year 2016, and advised the Board of the level of capital
the Group is required to hold in August 2016. The ICG advised in
August 2016 replaced the ICG advised to the Board in May 2013. The
FCA plan to carry out their next SREP around August 2019.
The Group's total capital ratio and its minimum capital
requirements are expressed as a percentage, calculated as capital
resources divided by the Pillar 1 Risk Exposure Amounts in
accordance with CRD IV rules.
The ICG advised by the FCA in August 2016 requires the Group to
hold capital in addition to the Pillar 1 minimum equal to 9.4% of
the Pillar 1 Risk Exposure Amounts. The previous ICG required the
Group to hold capital in addition to the Pillar 1 minimum equal to
5.0% of the Pillar 1 Risk Exposure Amounts. The increase in the ICG
primarily reflects an increase in the level of market risk that
will be faced by the Group as a result of the increasing take up of
Limited Risk Accounts, and includes a scalar (at 5% of the minimum
requirements) to reflect 'unsighted' risks the Group may face
following the launch of IG Investments.
The required minimum capital ratio at 31 May 2017 was 18.7%,
including the effect of the Capital Conservation Buffer, which the
Bank of England raised on 1 January 2017 to 1.25% in line with the
transitional provisions laid out by the FCA in IFPRU TP 7.
The Group's Total Capital Ratio, using the balance sheet of the
Group as at 31 May 2017 including the profit for the financial
year, was 26.7%.
F. Segmental tax information
The segmental analysis in note 3 reflects the information
reviewed by the Executive Directors for the purposes of allocating
resources and assessing performance. Net trading revenue from OTC
leveraged derivatives is reported by segment reflecting the
location of the office that manages the underlying client
relationship and represents an allocation of the net trading
revenue that the Group generates from clients' trading activity.
This does not reflect the statutory revenue or costs recorded in
individual legal entities and branches which is the basis for the
determination of taxable profit.
With the exception of South Africa, where the local office
hedges the market risk arising from clients' trading in onshore
products, all the local offices hedge the market risk arising from
their clients' activities in OTC leveraged derivatives with a legal
entity in the UK, on a back to back basis, and as result report nil
net trading revenue from OTC leveraged derivatives in their
statutory accounts.
Revenue and profit reported in the statutory accounts of legal
entities and branches reflect the transfer pricing arrangements in
place, which change from time to time reflecting the commercial and
operational circumstances of the individual legal entity or branch,
and changes in tax legislation. These arrangements mean that the
majority of the group's profit is taxed in the UK, reflecting the
fact that majority of the business value is created through the
trading platform developed and maintained in the UK, and through
the internalisation of global client flows in the UK.
The table below sets out the statutory profit before tax, and
tax charge, reported by the legal entities and branches in each of
the geographic segments in order to explain the make-up of the
group's tax charge by region.
Year ended 31 May
2017 UK EMEA APAC US Total
GBPm GBPm GBPm GBPm GBPm
Profit before tax 197.7 10.6 6.6 (1.2) 213.7
Current tax charge (42.5) (1.8) (1.4) - (45.7)
Deferred tax charge (1.4) - 1.2 1.4 1.2
------- ------ ------ --------- -------
Tax charge (43.9) (1.8) (0.2) 1.4 (44.5)
------- ------ ------ --------- -------
Effective tax rate 22.2% 17.0% 3.0% (116.7)% 20.8%
Year ended 31 May
2016 UK EMEA APAC US Total
GBPm GBPm GBPm GBPm GBPm
Profit before tax 197.6 7.1 7.0 (3.8) 207.9
Current tax charge (40.6) (1.9) (1.1) - (43.6)
Deferred tax charge 0.5 - (0.5) - -
------- ------ ------ ------ -------
Tax charge (40.1) (1.9) (1.6) - (43.6)
------- ------ ------ ------ -------
Effective tax rate 20.3% 26.8% 22.9% 0.0% 21%
Additional information - quarterly geographical revenue for the
year ended 31 May 2017
The tables below contain numbers which have been rounded and
therefore there may be rounding differences between subtotals and
the sum of individual numbers as presented. All year-on-year
percentages are calculated off underlying unrounded numbers.
Reporting Segment Q1 Revenue KPI %
----------------------------- ------------------------- ----------------------------
FY17 FY16 % Change Active Client Revenue
Growth per client
Growth
----------------------------- ------ ------ --------- -------------- ------------
UK 53.0 54.5 (2.8%) 11% (13%)
-----------------------------
EMEA 29.8 24.1 24% 18% 5%
-----------------------------
APAC 25.2 25.1 0.3% (1.3%) 1.6%
Leverage OTC 108.0 103.7 4.2% 9% (4.8%)
----------------------------- ------ ------ --------- -------------- ------------
US 3.0 2.2 38% 43% (3.9%)
-----------------------------
Share Dealing & Investments 0.5 0.1 248% 206% 14%
-----------------------------
Multi-Product Clients - - - 92%
-------------- ------------
Group 111.4 106.0 5.2% 17% (10.3%)
----------------------------- ------ ------ --------- -------------- ------------
Reporting Segment Q2 Revenue KPI %
----------------------------- ------------------------- ----------------------------
FY17 FY16 % Change Active Client Revenue
Growth per client
Growth
----------------------------- ------ ------ --------- -------------- ------------
UK 62.0 51.9 20% 17% 2.3%
-----------------------------
EMEA 37.2 29.0 28% 21% 6%
-----------------------------
APAC 30.4 25.2 21% 4.2% 16%
Leverage OTC 129.7 106.1 22% 14% 7%
----------------------------- ------ ------ --------- -------------- ------------
US 3.3 2.6 25% 40% (11%)
-----------------------------
Share Dealing & Investments 0.5 0.1 246% 236% 3.1%
-----------------------------
Multi-Product Clients - - - 114%
Group 133.4 108.9 23% 24% (1.1%)
----------------------------- ------ ------ --------- -------------- ------------
Reporting Segment Q3 Revenue KPI %
----------------------------- ------------------------- ----------------------------
FY17 FY16 % Change Active Client Revenue
Growth per client
Growth
----------------------------- ------ ------ --------- -------------- ------------
UK 51.1 60.3 (15%) (0.9%) (14%)
-----------------------------
EMEA 33.5 30.4 11% 11% (0.2%)
-----------------------------
APAC 28.2 28.5 (1.1%) (0.8%) (0.3%)
Leverage OTC 112.8 119.1 (5%) 2.6% (8%)
----------------------------- ------ ------ --------- -------------- ------------
US 3.9 2.6 49% 57% (4.9%)
-----------------------------
Share Dealing & Investments 0.6 0.2 166% 237% (21%)
-----------------------------
Multi-Product Clients - - - 116%
Group 117.4 122.0 (3.8%) 16% (17%)
----------------------------- ------ ------ --------- -------------- ------------
Reporting Segment Q4 Revenue KPI %
----------------------------- ------------------------- ----------------------------
FY17 FY16 % Change Active Client Revenue
Growth per client
Growth
----------------------------- ------ ------ --------- -------------- ------------
UK 56.9 55.7 2.2% 6% (3.9%)
-----------------------------
EMEA 37.0 33.8 9% 14% (4.2%)
-----------------------------
APAC 30.3 25.9 17% 3.8% 13%
Leverage OTC 124.2 115.4 8% 8% (0.4%)
----------------------------- ------ ------ --------- -------------- ------------
US 3.9 3.8 2.9% 47% (30%)
-----------------------------
Share Dealing & Investments 0.8 0.3 149% 203% (18%)
-----------------------------
Multi-Product Clients - - - 107%
Group 128.8 119.5 8% 22% (12%)
----------------------------- ------ ------ --------- -------------- ------------
Additional information - half yearly geographical revenue for
the year ended 31 May 2017
The tables below contain numbers which have been rounded and
therefore there may be rounding differences between subtotals and
the sum of individual numbers as presented. All year-on-year
percentages are calculated off underlying unrounded numbers.
Reporting Segment H1 Revenue KPI %
----------------------------- ------------------------- ----------------------------
FY17 FY16 % Change Active Client Revenue
Growth per client
Growth
----------------------------- ------ ------ --------- -------------- ------------
UK 115.0 106.4 8% 15% (6%)
-----------------------------
EMEA 67.0 53.1 26% 18% 7%
-----------------------------
APAC 55.6 50.3 11% 0.7% 10%
Leverage OTC 237.6 209.8 13% 12% 1.5%
----------------------------- ------ ------ --------- -------------- ------------
US 6.3 4.8 31% 44% (9%)
-----------------------------
Share Dealing & Investments 1.0 0.3 247% 236% 3.4%
-----------------------------
Multi-Product Clients - - - 115%
------------
Group 244.9 214.8 14% 20% (5%)
----------------------------- ------ ------ --------- -------------- ------------
Reporting Segment H2 Revenue KPI %
----------------------------- ------------------------- ----------------------------
FY17 FY16 % Change Active Client Revenue
Growth per client
Growth
----------------------------- ------ ------ --------- -------------- ------------
UK 108.0 116.0 (7%) 0.2% (7%)
-----------------------------
EMEA 70.5 64.2 10% 9% 1.0%
-----------------------------
APAC 58.5 54.4 8% 1.9% 6%
Leverage OTC 237.0 234.5 1.1% 3.3% (2.2%)
----------------------------- ------ ------ --------- -------------- ------------
US 7.8 6.4 22% 50% (19%)
-----------------------------
Share Dealing & Investments 1.4 0.5 156% 203% (15%)
-----------------------------
Multi-Product Clients - - - 105%
Group 246.2 241.5 2.0% 16% (12%)
----------------------------- ------ ------ --------- -------------- ------------
Additional information - restatement of current and prior year
revenue and client to reflect reporting changes
The tables below contain numbers which have been rounded and
therefore there may be rounding differences between subtotals and
the sum of individual numbers as presented. All year-on-year
percentages are calculated off underlying unrounded numbers.
Historic FY17 Revenue Ireland RoW > RoW > US Non-Leverage FY17 Revenue New Segments
Segments EMEA APAC
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
UK & Ireland 232.7 (7.7) (1.9) 223.0 UK
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
Europe 109.5 7.7 20.5 (0.2) 137.5 EMEA
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
Australasia 71.3 43.0 (0.2) 114.1 APAC
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
Rest of World 77.6 (20.5) (43.0) (14.1)
Group 491.1 0.0 0.0 0.0 (14.1) (2.4) 474.6 Leverage
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
14.1 14.1 US
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
2.4 2.4 Non-Leverage
491.1 Group
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
Historic FY16 Revenue Ireland RoW > RoW > US Non-Leverage FY16 Revenue New Segments
Segments EMEA APAC
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
UK & Ireland 231.1 (8.0) (0.8) 222.3 UK
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
Europe 98.6 8.0 10.7 (0.0) 117.3 EMEA
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
Australasia 64.0 40.7 104.7 APAC
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
Rest of World 62.6 (10.7) (40.7) (11.2)
Group 456.3 0.0 0.0 0.0 (11.2) (0.8) 444.3 Leverage
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
11.2 11.2 US
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
0.8 0.8 Non-Leverage
456.3 Group
--------------- ------------- -------- ------- ------- ------- ------------- ------------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DDGDRRGBBGRR
(END) Dow Jones Newswires
July 18, 2017 02:00 ET (06:00 GMT)
Ig (LSE:IGG)
Historical Stock Chart
From May 2024 to Jun 2024
Ig (LSE:IGG)
Historical Stock Chart
From Jun 2023 to Jun 2024