IG Group posts a 52% increase in its annual profit

IG Group Holdings plc (LON: IGG) said on Thursday that its annual profit came in 52% higher as COVID-19 fuelled client activity in recent months. The company said that market volatility is likely to return to pre-virus levels in fiscal 2021. Earlier this week, IG applied for block listing of 1 million ordinary shares.

Shares of the company opened about 2% up on Thursday but dropped more than 11% on market open. At 781 pence per share, IG Group is roughly 11% up year to date in the stock market after recovering from a low of 564 pence per share in late March. Learn more about how to invest in the stock market.

IG Group prints £295.9 million of annual pre-tax profit

The online trading firm that caters to individuals and non-institutional retail investors recorded £295.9 million of pre-tax profit in the financial year that concluded on 31^st May. In the previous year, its pre-tax profit came in at a much lower £194 million.

At over 1 million trades per day, the company boasted to have hit unprecedented levels of average daily trade volume in March when the impact of COVID-19 was at its peak. The figure represents a 200% increase as compared to 336,000 of average daily trade volume in 2019.

The online trading platforms and retail brokers have not only benefitted from the Coronavirus pandemic that fuelled client activity in recent months but also from a significant increase in market volatility (commodity, currency, and stock) that contributed further to boosting trade volumes.

IG Group reports a 36% increase in annual net trading revenue

In the medium term, the company now forecasts its core markets portfolio to see a 3% to 5% growth in revenue. By the end of 2022, it estimates £100 million of incremental revenue. In the recently ended financial year, IG said that its annual net revenue from trading came in 36% higher at £649.2 million as the online trading platform onboarded 96,900 new clients.

The London-based company’s report on Thursday also highlighted that its dividend payout remained unchanged from last year at 30.24 pence a share of final dividend and 43.2 pence a share of full-year dividend.

IG Group performed fairly upbeat in the stock market last year with an annual gain of more than 20%. At the time of writing, the online trading platform is valued at £2.89 billion and has a price to earnings ratio of 19.41.