IG Group sees moderation in new client acquisition level in Q1 FY22
Electronic trading major IG Group Holdings plc (LON:IGG) today provided a trading update for the three months to 31 August 2021 (“Q1 FY22”).
Revenue for the quarter was £227.5 million. Excluding the foreign exchange hedging gain associated with the financing of the tastytrade acquisition which completed on 28 June 2021, adjusted net trading revenue was £221.7 million, higher than both the same period in the prior year (Q1 FY21: £209.0 million) as well as the recent Q4 FY21 period (£214.1 million), and consistent with the Group’s previous guidance.
tastytrade delivered another consecutive record quarter of revenue. In the approximately two month period since completion of the acquisition, it delivered revenue of £20.8 million. Excluding tastytrade, adjusted net trading revenue for the quarter was £200.9 million, 4% lower than Q1 FY21, reflecting anticipated moderation in trading activity.
Core Markets+ revenue was £192.1 million in the quarter (Q1 FY21: £199.9 million), down 4%, reflecting, as anticipated, the impact of ASIC regulation in Australia which came into effect in March 2021. The Japan business continued to perform strongly and delivered growth ahead of expectations in the quarter.
High Potential Markets revenue was £29.6 million in the quarter, reflecting strong growth at tastytrade and Spectrum, offset by revenues from Nadex, which experienced reduced client activity.
Pro forma revenue, which includes a full quarter of tastytrade was £38.2 million (pro forma Q1 FY21: £32.9 million) was up 16%.
Total active clients in the quarter were 287,200. Excluding tastytrade, active clients were up 12% at 225,900 (Q1 FY21: 201,500) reflecting both elevated levels of client acquisition over the 12 month period and new client retention levels tracking in line with historical client cohorts.
As anticipated, the Group saw some moderation in the level of new client acquisition compared to the exceptional levels seen throughout FY21. The Group onboarded 27,500 new clients in the period. Excluding tastytrade, 21,900 new clients were acquired, down 37% on the prior year period (Q1 FY21: 34,600).
The strong business performance in the quarter reflects the size and quality of the Group’s active client base. The Group remains confident of achieving its medium term targets for the Core Markets+ and High Potential Markets portfolios.