IG Group Shares Edged 3.72% Higher on Business Streamlining News

The IG Group Holdings plc (LON: IGG) share price edged 3.72% higher after announcing that it had started implementing measures to streamline its business and position it as a lean fintech company that can deliver world-class customer experience.

These strategic moves are set to make the company more agile, efficient, and poised for innovation, thereby elevating the quality of its services and client experience. The decision to undertake these actions follows a comprehensive review of opportunities for cost efficiency, as indicated in recent financial result reports. 

A central element of this strategic shift involves a reduction in headcount by around 300 positions, representing approximately 10% of the total workforce at the close of FY23. In tandem with this workforce reduction, IG Group will implement various efficiency measures, including an expansion in the utilisation of its global centres of excellence.

The comprehensive approach is anticipated to yield annual cost savings of £50 million, signalling the company's commitment to fiscal prudence and financial sustainability. 

The cost-saving initiatives are not merely short-term measures; they are expected to yield structural savings in the years to come. IG Group anticipates realising savings of £10 million in FY24, followed by £40 million in FY25, and eventually reaching £50 million in FY26. 

The specific reduction of variable costs by £10 million in FY24 underscores the company's responsiveness to prevailing market conditions, particularly the challenges disclosed in Q1 and ongoing into Q2. These measures are estimated to generate savings of £20 million for the fiscal year 2024.

In the pursuit of these efficiency enhancements, IG Group acknowledges the existence of non-recurring costs associated with implementing these savings. These costs are projected to amount to approximately £18 million and will be spread across FY24 and FY25. 

Charlie Rozes, IG Group’s Acting CEO, commented: “We want to position IG Group as a lean fintech company, and today's decisive actions ensure a strong platform for future growth. We will continuously evaluate and pursue cost-efficiency opportunities to create a more agile and scalable organisation. Full support will be provided to our people throughout this process, and while these decisions are not easy to take, they will ensure the business is well positioned for continued long-term success.”

IG Group share price. 

The IG Group share price edged 3.72% higher to trade at 663.3p from Monday’s closing price of 639.5p.