IG Quarterly Sales Rise as Clients Bet on Cyprus, Japan, GoldKevin Crowley
IG Group Holdings Plc, the U.K.’s biggest spread-betting firm, said fiscal fourth-quarter revenue rose 8 percent as clients levied wagers on market-moving events affecting Cyprus and Japan as well as the price of gold.
Revenue climbed to 104.3 million pounds ($163 million) in the three months to May 31, boosted by growth in Australia and Japan, the London-based company said today in a statement. While revenue for the fiscal full-year declined 1 percent to 361.9 million pounds, pretax profit will be more than in the previous fiscal year, the firm said, without providing a specific figure.
“Clients responded to a number of separate market events including the Cyprus bail-in, a significant fall in gold prices, continuing strength in the global equity markets and movements in the yen and the Nikkei, driven by Bank of Japan intervention,” IG Group said in the statement.
IG Group, founded in 1974 to enable people to bet on the price of gold without trading the commodity itself, is seeking to expand in countries such as Norway and France, which have a less established spread-betting market than the U.K. Spread-betting firms profit through the initial spread, or the difference between the price offered to clients on opposite sides of the same trade. They also charge interest on funds loaned to clients to boost the size of their trades.
Pretax profit for this year will be increased by 4 million pounds due to the successful defense of a legal case linked to the insolvency of Echelon Wealth Management, IG Group said in the statement.
Operating costs will rise in in the next fiscal year as the company resets employees’ variable pay and invests in expanding the firm, IG Group said. The company has offices in 15 countries.