IG Group Share Price Fell 7.15% on Weak Interim H1 2024 Results

The IG Group Holdings plc (LON: IGG) share price fell 7.15% after releasing the interim results for the six months that ended on 30 November 2023. The global fintech company that operates as a Forex and CFDs broker noted that softer market conditions characterised its performance in the H1 fiscal year 2024 pitted against a strong comparative.  

The company’s total revenue experienced a decline, dropping to £472.6 million compared to £519.1 million in H1 FY23, representing a 9% decrease. The net trading revenue stood at £402.4 million, a significant 19% decrease from the £494.9 million reported in H1 FY23. 

The decline was primarily attributed to substantially lower market volatility across various asset classes compared to the same period in the previous year. However, net interest income painted a brighter picture, soaring to £70.2 million, up from £24.2 million in H1 FY23. This increase was driven by higher interest rates prevalent across all markets.

Tastytrade, a company subsidiary, continued its growth trajectory, recording another record-breaking half of total revenue. The revenue for Tastytrade rose by 29% to $117.8 million, up from $91.4 million in H1 FY23.

The company's client base remained robust, with active clients totalling 296,300, slightly down from 312,000 in H1 FY23. New client acquisitions were also substantial, with 33,800 new clients joining, a slight decrease from 37,500 in the previous year, reflecting the continued attractiveness of IG’s products and services despite the challenging market environment.

Adjusted total operating costs for H1 FY24 amounted to £281.1 million, up 9% from £256.8 million in H1 FY23, but showing a 1% reduction compared to the second half of FY23. The statutory total operating costs increased by 11% to £310.4 million, up from £279.9 million in the previous year.

Adjusted profit before tax witnessed a decline of 21%, settling at £205.7 million, compared to £260.7 million in H1 FY23. The statutory profit before tax was recorded at £176.4 million, down from £240.5 million. 

Despite the decrease, the adjusted profit before tax margin remained attractive at 43.5%, though lower than the 50.2% in H1 FY23. Adjusted basic earnings per share (EPS) were 38.9p, down from 49.7 pence. 

The company launched a comprehensive operational improvement program in October 2023. The initiative is expected to yield structural cost savings of £50 million annually by FY26.

IG Group share price. 

The IG Group share price fell 7.15% to trade at 717.3p from Wednesday’s closing price of 772.5p. On Friday, following the results, Barclays lowered its price target for IG to 905p from 950p per share, maintaining an Overweight rating on the stock.

Elsewhere, RBC Capital lowered its IG target to 950p from 975p, keeping an Outperform rating on the shares.