IG Group full-year profit dented by Swiss franc incident
IG Group posted a 13% drop in full-year pre-tax profit, as the online trading company took a hit from the surge in the Swiss franc in January when the Swiss National Bank announced without notice that it was ceasing intervention in the franc exchange rate.
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For the year ended 31 May, pre-tax profit was down to £169.5m from £194.9m last year.
However, underlying revenue – before the impact of the Swiss franc event – was up 8% at £400.2m, while underlying pre-tax profit was down by 0.9% to £193.2m.
The company said the Swiss franc de-peg on 15 January reduced revenue by £12m and increased the bad debt charge by £15m.
IG said it achieved double-digit underlying revenue growth in the UK, Australia and Rest of World, which together comprise 80% of its revenue. This growth was as driven by the combination of higher active client numbers and higher average revenue per client in the UK and Australia, and strong client growth in Rest of World.
However, this was partially offset by a 1.5% fall in European revenue, the company said. IG maintained its full-year dividend at 28.15p, bringing the final dividend to 19.70p.
In a separate statement, IG Group announced that its chief executive officer Tim Howkins will retire from his post after the company’s annual general meeting in October.
Shore Capital said: “The numbers are slightly below our expectations in a period where we thought that IG may have some capacity to take advantage of difficulties at a competitor towards the period end.”
Shore had expected net trading revenue of £400.8m and adjusted pre-tax profit of £199.4m. It kept its ‘sell’ recommendation on the stock with a 670p fair value.
At 1023 BST, IG Group shares were down 6.5% at 754.30p.