LEI No:
2138003A5Q1M7ANOUD76
Interim results for the six
months ended 30 November 2024
23 January 2025
IG Group Holdings plc ("IG", "the
Group", "the Company"), today announces its results for the six
months ended 30 November 2024 ("H1 FY25").
Financial highlights
Earnings growth on prior year
levels reflected more supportive market conditions and lower
costs.
- Total revenue of £522.5 million (H1
FY24: £472.6 million), up 11%.
- Net trading revenue of £451.7
million (H1 FY24: £402.4 million), up 12% driven by higher revenue
per client.
- Net interest income flat at £70.8
million (H1 FY24: £70.2 million) as higher client money balances
offset lower interest rates.
- Adjusted[1] profit before tax of £266.8 million (H1 FY24:
£205.7 million), up 30%, at a margin of 51.1% (H1 FY24: 43.5%).
Statutory profit before tax of £249.3 million (H1 FY24: £176.4
million), up 41%.
- Adjusted basic EPS of 55.3 pence
(H1 FY24: 38.9 pence), up 42% on H1 FY24. Statutory basic EPS of
51.7 pence (H1 FY24: 33.4 pence).
- Total capital return of £281
million split across dividends paid and shares repurchased in the
period (H1 FY24: £276 million).
- Increased interim dividend to
13.86p per share (H1 FY24: 13.56p).
- Extending the share buyback
programme by £50 million to £200 million to be completed in the
second half of FY25.
Strategic and operational highlights
Making progress delivering against
the initial priorities outlined in July 2024, to improve our
product, embed a high-performance culture and enhance
efficiency.
- Announced the acquisition of
Freetrade, strengthening IG's UK trading and investments
proposition and providing access to new customer segments and
capabilities.
- Implemented a decentralised
organisational model to enhance client centricity.
- Taken decisive action to exit
initiatives not delivering acceptable returns, including the
Spectrum multilateral trading facility ("Spectrum"). Spectrum was
broadly breakeven in H1 FY25, and its core products will be offered
more cost efficiently over-the-counter.
- Total
active clients of 295,300 were down fractionally on the prior year
(H1 FY24: 296,300). First trades of 33,900 were flat (H1 FY24:
33,800).
- tastytrade
total revenue increased 15% year-on-year, within which trading
revenue reached a record $90.5 million (H1 FY24: $72.9 million).
tastytrade interest income was stable at $45.3 million (H1 FY24:
$44.9 million).
Financial summary
|
£ million (unless
stated)
|
H1 FY25
|
H1 FY24
|
% YoY
|
H2 FY24
|
% HoH
|
|
Net trading revenue
|
451.7
|
402.4
|
12%
|
442.6
|
2%
|
|
Total revenue
|
522.5
|
472.6
|
11%
|
514.7
|
2%
|
|
Adjusted operating
costs1
|
(277.4)
|
(281.1)
|
(1%)
|
(283.0)
|
(2%)
|
|
Adjusted profit before
tax
|
266.8
|
205.7
|
30%
|
250.5
|
7%
|
|
Adjusting
items1
|
(17.5)
|
(29.3)
|
(40%)
|
(26.1)
|
(33%)
|
|
Statutory profit after
tax
|
188.0
|
132.7
|
42%
|
175.0
|
7%
|
|
Basic earnings per share
(p)
|
51.7
|
33.4
|
55%
|
45.1
|
15%
|
|
Adjusted basic earnings per share
(p)
|
55.3
|
38.9
|
42%
|
50.4
|
10%
|
|
Interim dividend per share
(p)
|
13.86
|
13.56
|
2%
|
-
|
-
|
1 H1 FY25 adjusted operating costs exclude £17.5 million of
recurring non-cash items relating to the tastytrade acquisition. H1
FY24 adjusted operating costs exclude £18.9 million of recurring
non-cash items and £0.5 million of one-off costs relating to the
tastytrade acquisition, and £9.9 million of one-off non-recurring
costs related to the operational improvement programme. H2 FY24
adjusted operating costs exclude £16.2 million of recurring
non-cash items and £0.8 million of one-off costs relating to the
tastytrade acquisition, and £9.2 million of one-off non-recurring
costs related to the operational improvement programme.
Breon Corcoran, Chief Executive Officer,
commented:
"First half performance reflected
more supportive market conditions, but we have work to do to grow
active customers which will be necessary to deliver sustainably
stronger growth.
"Our focus remains on executing
against the priorities we outlined in July 2024, which are to
improve our product, embed a high-performance culture across the
business and enhance efficiency.
"Last week, we were delighted to
announce the acquisition of Freetrade, the fast-growing,
commission-free UK self-directed investment platform. The
transaction will strengthen IG's UK trading and investments
offering and provide access to new customer segments and
capabilities.
"We have made progress in the
first half of the year and have much more to do. Our people are
full of energy and committed to delivering stronger, more
sustainable growth.
"Current trading has been
satisfactory, and we remain confident of meeting consensus revenue
and profit before tax expectations in FY25. I look forward to
updating you on progress in the second half of the
year."
Further information
|
Investor Relations
|
|
Media
|
|
Martin Price / Adnan
Zab
|
|
Edward Berry / Katherine
Bell
|
|
020 7573 0020 / 020 7633
5310
|
|
07703 330 199 / 07976 870
961
|
|
investors@iggroup.com
|
|
iggroup.sc@fticonsulting.com
|
Analyst presentation
Breon Corcoran (CEO) and Clifford
Abrahams (CFO) will host a webcast presentation on IG's FY25
interim results for analysts and institutional shareholders today
at 09:30 (UK time). This will be followed by the opportunity to ask
questions via the conference call line and through the web. To
access the webcast or telephone conference call please register in
advance using the following links.
Webcast: https://pres.iggroup.com/ig063
Conference call:
https://pres.iggroup.com/ig063/vip_connect
Presentation slides can be viewed
at:
https://www.iggroup.com/investors
Alternative performance measures
IG Group management believes that
the alternative performance measures included in this document
provide valuable information to the readers of the financial
statements as they enable the reader to identify a more consistent
basis for comparing business performance between financial periods.
They also provide more detail concerning the elements of
performance which the managers of these businesses are most
directly able to influence or are relevant for an assessment of the
Group. Furthermore, they reflect how operating targets are defined
and performance is monitored by IG Group management. However, any
alternative performance measures in this document are not a
substitute for statutory measures and readers should also consider
the statutory measures. Refer to the appendices for further
information and calculations of alternative performance measures
included throughout this document, and the most directly comparable
statutory measures.
Forward-looking statements
This preliminary statement,
prepared by IG Group Holdings plc (the "Company"), may contain
forward-looking statements about the Company and its subsidiaries
(the "Group"). Such forward-looking statements can be identified by
the use of forward-looking terminology, including the terms
"believes", "projects", "estimates", "plans", "anticipates",
"targets", "aims", "continues", "expects", "intends", "hopes",
"may", "will", "would", "could" or "should" or, in each case, their
negative or other various or comparable terminology.
Forward-looking statements involve
known and unknown risks, uncertainties, assumptions and other
factors which are beyond the Company's control and are based on the
Company's beliefs and expectations about future events as of the
date the statements are made. If the assumptions on which the Group
bases its forward-looking statements change, actual results may
differ from those expressed in such statements. There are a number
of factors that could cause actual results and developments to
differ materially from those expressed or implied by these
forward-looking statements, including those set out under
"Principal Risks" in the FY24 Group Annual Report for the financial
year ended 31 May 2024. The Annual Report can be found on the
Company's website (www.iggroup.com).
Forward-looking statements speak
only as of the date they are made. Except as required by applicable
law and regulation, the Company undertakes no obligation to update
these forward-looking statements.
No offer or solicitation
This announcement is not intended
to, and does not constitute, or form part of, any offer to sell or
an invitation to purchase or subscribe for any securities or a
solicitation of any vote or approval in any
jurisdiction.
No profit forecasts or estimates
No statement in this announcement
is intended as a profit forecast or estimate for any
period.
Some numbers and period on period
percentages in this statement have been rounded or adjusted to
ensure consistency with the financial statements. This may lead to
differences between subtotals and the sum of individual numbers as
presented. Acronyms used in this report are as defined in the
Group's Annual Report.
About IG
IG Group (LSEG:IGG) provides online trading
platforms and educational resources to empower ambitious clients
around the globe. Headquartered in the UK, IG Group is a FTSE 250
company that offers clients access to ~19,000 financial markets
worldwide.
Chief Executive Officer's
statement
Financial performance in the first
half of FY25 reflected more supportive market conditions which
resulted in higher revenue against an undemanding prior year
comparator. Lower costs contributed to higher margins and share
buybacks underpinned further growth in earnings per
share.
I laid out my priorities in July
2024 which are to improve our product, embed a high-performance
culture across the business and enhance efficiency. We have made
progress and have much more to do to realise our
potential.
I am delighted to welcome Clifford
Abrahams as our new Chief Financial Officer. Clifford joined us
after the end of the first half on 16 December and is already
making a significant impact. His extensive experience of leading
high-performing teams makes him a valuable addition to the
leadership team. Clifford's leadership and expertise will be
instrumental in delivering our next phase of growth.
Improving our product
The focus we have had on improving
our product has some early momentum with the launch of content and
features which customers have asked us for and which close gaps to
competitors. Examples include IG TopTrader which provides our
customers with real-time information on how our most successful
traders are positioning, deeper integration with TipRanks, a
popular trading and investments research platform, and integration
of our OTC and exchange-traded derivatives businesses with
TradingView, a leading charting platform and social
network.
Towards the end of the first half,
we rolled out measures which we expect to enhance revenue retention
in our OTC business by capturing more spread income and lowering
hedging costs, without taking more market risk, whilst enhancing
client experience.
On 16 January, we announced the
acquisition of Freetrade, the fast-growing, self-directed
investment platform. The transaction will strengthen our UK
direct-to-customer proposition and provide access to new customer
segments and capabilities in a high-growth market. I'm delighted to
welcome Viktor Nebehaj, CEO and co-founder of Freetrade, and his
team to IG as they continue to scale the business. The acquisition
is subject to regulatory approval and expected to close in
mid-2025.
The product enhancements we have
made, and the acquisition of Freetrade, are important first steps
in improving our proposition, and we have more work to do to close
product and capability gaps and simplify our offering. Our focus is
on increasing organic growth, but we continue to seek M&A
opportunities that can accelerate delivery of our strategy and
create long-term shareholder value.
Embedding a high-performance culture
We have successfully implemented a
decentralised organisational model to enhance client centricity and
increase ownership and accountability across the business. We now
have five geographically aligned divisions which have dedicated
product, technology and marketing resources to deliver more
relevant products, more quickly. We have also made changes to
colleague performance assessment and reward to foster a
high-performance culture, and we are bringing high-performing
talent to IG to drive growth.
In the first half, we welcomed
three new Executive Committee members, including Clifford, as Group
CFO, and Managing Directors for our UK and Ireland and
Institutional and Emerging Markets divisions. We have also added
senior product, marketing and digital servicing specialists who
will bring valuable, fresh perspectives to the business which are
needed to drive growth. We continue to assess colleagues to
understand and close skills gaps.
I am encouraged by the positive
impact these initiatives are having on organisational
effectiveness.
Taking initial steps to enhance efficiency
We have kicked-off workstreams to
enhance efficiency and scalability in our operations function, with
an initial focus on client onboarding and servicing. I am confident
that these initiatives will lower our cost-to-serve, although the
benefits will take time to evidence.
Over the past 12-months, we have
taken decisive action to exit initiatives not delivering acceptable
returns, including DailyFX, Spectrum and a legacy, multi-year stock
trading and investments project. Spectrum was established in 2019
to diversify our product offering in Europe and the Group has
invested significant resources and capital over the past five years
attempting to scale the business. It became clear to me that the
momentum which had been hoped for has not materialised quickly
enough and performance has not been satisfactory. We announced
plans to close Spectrum in November and are making its products
available more cost efficiently over-the-counter. In H1 FY25
Spectrum generated approximately £8 million revenue and had similar
operating costs.
Outlook
We operate in large and growing
addressable markets and macro-economic uncertainty and volatility
will continue to present our customers with trading opportunities.
The business has demonstrated an ability to capture cyclical
upside, we are making progress against our initial priorities and
have lots more work to do to drive sustainably stronger structural
growth.
Current trading is satisfactory,
and we remain confident of meeting FY25 consensus total revenue and
adjusted profit before tax expectations.
Chief Financial Officer's
statement
In my first report as Chief
Financial Officer, I am pleased that the Group has delivered a
better performance relative to the prior year, albeit reflecting
more supportive market conditions. It is clear to me that IG has
many strengths, including solid positions in large and growing
addressable markets, geographically well diversified revenue, high
margins and strong capital generation. However, we are competing
against many new and highly capable players and there are many
things we must improve to take market share.
We detailed our initial priorities
in July 2024, and we are moving at pace to deliver on these. As we
do this, I am confident that we will compete more effectively,
increase active customers and build scale. That commercial growth
will translate into growth in earnings and ongoing capital
returns.
Top
line growth delivered in better cyclical market
conditions
Total revenue exceeded the peaks
of the pandemic at £522.5 million, as volatility normalised to
long-term averages from unusually low levels in the prior year. OTC
client income conversion for the half year was in line with typical
levels in a mid-70% range, but at the top end in Q1 and towards the
lower end in Q2.
Interest income was broadly flat
as growth in customer cash balances offset lower interest
rates.
Performance in the period was a
good demonstration of IG's ability to capture cyclical upside, but
our focus is on delivering sustainably stronger growth from more
diverse revenue streams.
Net trading revenue increased
across all products, driven by higher revenue per client, but
active clients and new client acquisition, or first trades, were
flat. I am confident that the investments we are making in product
and marketing will result in stronger growth, but this will take
time to evidence.
Costs well controlled
Operating costs declined 1% on
prior year levels, driven by normalisation of bad debt to £0.6
million from unusually elevated levels (H1 FY24: £10.5 million) and
lower fixed remuneration due to efficiency measures initiated in
October 2023 which reduced average headcount by 10%. These savings
enabled us to offset investment in technology, including
digitalisation of business processes and relocation of our data
centres.
We expect costs to be modestly
higher in the second half reflecting the timing of the provision we
take for the UK Financial Services Compensation Scheme (FSCS) levy,
higher marketing costs, further investment in digitalisation to
enhance scalability and expenses associated with the acquisition of
Freetrade.
Deploying our strong cash generation for shareholder returns
and to accelerate growth
In the first half of the year, we
returned £281 million of capital to shareholders via ordinary
dividends and share buybacks, supported by strong cash conversion
and a robust balance sheet. Since the end of FY22, we have returned
over £1 billion to shareholders via ordinary dividends and share
buybacks and reduced our share count by 18%.
At the end of November 2024, we
had £658 million of headroom over the Group minimum regulatory
capital requirement of £286 million, including a deduction for the
interim dividend declared today.
Following the acquisition of
Freetrade, which we expect to close in mid-2025, and the execution
of the £50 million extension to our share buyback programme, the
Group capital position remains strong with indicative pro forma
headroom of £424 million. This is stated prior to capital
generation from the end of November 2024 and reflects a deduction
from regulatory capital resources of approximately £174 million
associated with the transaction. This deduction comprises of the
£160 million enterprise value, in addition to acquired cash, net
debt items and other liquidity requirements, totalling
approximately £14 million. Indicative pro forma headroom includes
modestly higher estimated Group regulatory capital requirements
resulting from the acquisition of approximately £10
million.
Initial focus is on optimising capital allocation and
growth
It is pleasing to see the strong
first half performance, but I recognise this was underpinned by
supportive market conditions. Our focus is on accelerating
profitable growth by increasing active users and revenue to
leverage our platform. To do this, we must invest in our existing
products and brands, close product gaps and diversify
revenue.
I am supportive of our existing
capital allocation framework and intend to review to see if it can
be refined.
Today we announced that we are
extending our share buyback programme by £50 million to £200
million. It is pleasing to show how we can both invest in accretive
growth and return capital at attractive equivalent rates of return
on our buyback, all whilst safeguarding our robust balance
sheet.
Business Performance
Review
The following analysis on the
income statement is presented on an adjusted basis, which excludes
certain one-off items and recurring non-cash items. Further detail
on these adjustments and a reconciliation of alternative
performance measures used in this report is contained in the
appendix.
Summary Group Income Statement
|
£m
|
H1 FY25
adjusted
|
H1 FY25
|
H1 FY24
adjusted
|
H1 FY24
|
Change adjusted
%
|
Change %
|
|
Net trading revenue
|
451.7
|
451.7
|
402.4
|
402.4
|
12%
|
12%
|
|
Net interest income
|
70.8
|
70.8
|
70.2
|
70.2
|
1%
|
1%
|
|
Total revenue
|
522.5
|
522.5
|
472.6
|
472.6
|
11%
|
11%
|
|
Betting duty and other operating
income1
|
2.1
|
2.1
|
0.3
|
0.3
|
|
|
|
Net operating income
|
524.6
|
524.6
|
472.9
|
472.9
|
11%
|
11%
|
|
Total operating
costs1
|
(277.4)
|
(294.9)
|
(281.1)
|
(310.4)
|
(1%)
|
(5%)
|
|
Operating profit
|
247.2
|
229.7
|
191.8
|
162.5
|
29%
|
41%
|
|
Other net losses
|
(0.2)
|
(0.2)
|
(1.5)
|
(1.5)
|
|
|
|
Net finance income
|
19.8
|
19.8
|
15.4
|
15.4
|
|
|
|
Profit before tax
|
266.8
|
249.3
|
205.7
|
176.4
|
30%
|
41%
|
|
Tax expense
|
(65.6)
|
(61.3)
|
(50.9)
|
(43.7)
|
29%
|
40%
|
|
Profit after tax
|
201.2
|
188.0
|
154.8
|
132.7
|
30%
|
42%
|
|
Weighted average number of shares
for the calculation of EPS (millions)
|
363.9
|
363.9
|
397.6
|
397.6
|
(8%)
|
(8%)
|
|
Basic earnings per share (pence)
|
55.3
|
51.7
|
38.9
|
33.4
|
42%
|
55%
|
1 H1 FY25 adjusted operating costs exclude £17.5 million of
recurring non-cash items relating to the tastytrade acquisition. H1
FY24 adjusted operating costs exclude £18.9 million of recurring
non-cash items and £0.5 million of one-off costs relating to the
tastytrade acquisition, and £9.9 million of one-off non-recurring
costs related to the operational improvement programme.
Total revenue
Total revenue consists of net
trading revenue and net interest income. Total revenue was £522.5
million in H1 FY25, increasing 11% on H1 FY24, reflecting trading
revenue up 12% and interest income up 1%.
Net trading revenue
Net trading revenue for the Group
was £451.7 million, increasing 12% on H1 FY24. Volatility
across a range of asset classes normalised to long-term averages.
This resulted in increased trading volumes and a higher average
revenue per client across all products and divisions.
Net trading revenue by product
|
|
Trading revenue
(£m)
|
Active clients
(000)1
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
360.4
|
327.7
|
10%
|
142.8
|
147.3
|
(3%)
|
|
Exchange-traded
derivatives
|
78.0
|
63.6
|
23%
|
77.2
|
70.1
|
10%
|
|
Stock trading and
investments
|
13.3
|
11.1
|
20%
|
85.1
|
89.1
|
(4%)
|
|
Total
|
451.7
|
402.4
|
12%
|
295.3
|
296.3
|
-
|
|
|
|
|
|
|
|
|
1 Total Group active clients have been adjusted to remove the
clients who are active in more than one product category
(multi-product clients) to give a unique client count..
|
|
Revenue per client
(£)
|
First trades
(000)2
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
2,523
|
2,225
|
13%
|
17.5
|
20.7
|
(15%)
|
|
Exchange-traded
derivatives
|
1,011
|
907
|
11%
|
15.0
|
10.7
|
40%
|
|
Stock trading and
investments
|
157
|
125
|
25%
|
3.6
|
4.2
|
(14%)
|
|
Total
|
Nm
|
Nm
|
Nm
|
33.9
|
33.8
|
-
|
|
|
|
|
|
|
|
|
2 Total Group first trades have been adjusted to remove the
clients who traded in more than one product category to give a
unique first trade count.
OTC derivatives trading revenue
was £360.4 million, increasing 10% on H1 FY24 reflecting more
supportive market conditions, particularly in Q1, resulting in
higher revenue per client. Revenue per client increased 13%
offsetting a 3% reduction in active clients.
Exchange-traded derivatives
trading revenue was £78.0 million, up 23% on H1 FY24, with active
clients increasing 10% and revenue per client increasing
11%.
Stock trading and investments
trading revenue was £13.3 million, up 20% on H1 FY24, with active
clients down 4%, offset by a 25% increase in average revenue per
client.
Net trading revenue by division
During the period the Group
implemented a new decentralised operating model with five
geographically aligned divisions; UK and Ireland, APAC and Middle
East, United States, Europe and Institutional and Emerging
Markets.
UK and Ireland
|
|
Trading revenue
(£m)
|
Active clients
(000)1
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
127.4
|
115.7
|
10%
|
41.7
|
43.8
|
(5%)
|
|
Exchange-traded
derivatives
|
0.2
|
-
|
Nm
|
0.9
|
-
|
Nm
|
|
Stock trading and
investments
|
10.7
|
9.3
|
15%
|
56.0
|
60.2
|
(7%)
|
|
Total
|
138.3
|
125.0
|
11%
|
92.5
|
97.7
|
(5%)
|
1 Total UK and Ireland active clients have been adjusted to
remove the clients who are active in more than one product category
(multi-product clients) to give a unique client count.
|
|
Revenue per client
(£)
|
First trades
(000)2
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
3,056
|
2,640
|
16%
|
3.9
|
4.0
|
(3%)
|
|
Exchange-traded
derivatives
|
269
|
-
|
Nm
|
0.9
|
0.0
|
Nm
|
|
Stock trading and
investments
|
190
|
154
|
24%
|
2.2
|
2.6
|
(15%)
|
|
Total
|
Nm
|
Nm
|
Nm
|
5.7
|
5.8
|
(2%)
|
|
|
|
|
|
|
|
|
|
2 Total Group first trades have been adjusted to remove the
clients who traded in more than one product category to give a
unique first trade count.
In the UK and Ireland division,
trading revenue increased 11% on H1 FY24 to £138.3 million with OTC
derivatives revenue increasing 10% and stock trading and
investments revenue increasing 15%.
In the period, the division launched
futures and options trading, reported within exchange-traded
derivatives revenue, and this contributed £0.2m, with 900 new
active clients onboarded in the period. Divisional revenue growth
reflected higher revenue per client, driven by more supportive
market conditions. Active clients for the division were down
5% overall, with first trades down 2% on the prior
period.
APAC and Middle East
|
|
Trading revenue
(£m)
|
Active clients
(000)1
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
129.2
|
122.2
|
6%
|
52.1
|
53.8
|
(3%)
|
|
Stock trading and
investments
|
2.2
|
1.6
|
38%
|
28.2
|
28.0
|
1%
|
|
Total
|
131.4
|
123.8
|
6%
|
78.1
|
79.6
|
(2%)
|
|
|
|
|
|
|
|
|
1 Total APAC and Middle East active clients have been adjusted
to remove the clients who are active in more than one product
category (multi-product clients) to give a unique client
count.
|
|
Revenue per client
(£)
|
First trades
(000)2
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
2,479
|
2,270
|
9%
|
6.6
|
9.4
|
(29%)
|
|
Stock trading and
investments
|
79
|
58
|
37%
|
1.4
|
1.5
|
(12%)
|
|
Total
|
Nm
|
Nm
|
Nm
|
7.6
|
10.5
|
(28%)
|
|
|
|
|
|
|
|
|
2 Total Group first trades have been adjusted to remove the
clients who traded in more than one product category to give a
unique first trade count.
In the APAC and Middle East
division, trading revenue increased 6% to £131.4 million, with OTC
derivatives revenue up 6% and stock trading and investments
increasing 38%. OTC derivatives active clients decreased 3%,
although this was more than offset by 9% growth in revenue per
client. Stock trading and investments active clients were up
slightly, with 37% growth in revenue per client driving the overall
increase in trading revenue. First trades in the period were down
28% on H1 FY24.
United States (US)
|
|
Trading revenue
(£m)
|
Active clients
(000)1
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
7.3
|
7.3
|
0%
|
8.1
|
7.5
|
8%
|
|
Exchange-traded
derivatives
|
70.0
|
58.2
|
20%
|
71.5
|
65.6
|
9%
|
|
Total
|
77.3
|
65.5
|
18%
|
79.5
|
73.1
|
9%
|
1 Total US active clients have been adjusted to remove the
clients who are active in more than one product category
(multi-product clients) to give a unique client count.
|
|
Revenue per client
(£)
|
First trades
(000)2
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
912
|
981
|
(7%)
|
2.0
|
2.0
|
2%
|
|
Exchange-traded
derivatives
|
979
|
888
|
10%
|
12.5
|
9.5
|
32%
|
|
Total
|
Nm
|
Nm
|
Nm
|
14.5
|
11.5
|
27%
|
2 Total Group first trades have been adjusted to remove the
clients who traded in more than one product category to give a
unique first trade count.
In the US division, trading
revenue of £77.3 million increased 18%, driven by growth in
exchange-traded derivatives revenue from tastytrade, which
increased 20% on H1 FY24. In US Dollars, trading revenue increased
24%, reflecting 9% growth in active clients and 10% growth in
revenue per client. OTC derivatives trading revenue was in
line with H1 FY24 with active clients increasing 8%, and revenue
per client down 7%. First trades in the division increased 27% on
H1 FY24.
Europe
|
|
Trading revenue
(£m)
|
Active clients
(000)1
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
55.4
|
48.1
|
15%
|
28.2
|
29.1
|
(3%)
|
|
Exchange-traded
derivatives
|
7.7
|
5.4
|
45%
|
4.8
|
4.5
|
5%
|
|
Total
|
63.1
|
53.5
|
18%
|
31.8
|
32.2
|
(1%)
|
1 Total Europe active clients have been adjusted to remove the
clients who are active in more than one product category
(multi-product clients) to give a unique client count.
|
|
Revenue per client
(£)
|
First trades
(000)2
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
1,961
|
1,656
|
18%
|
3.3
|
3.5
|
(7%)
|
|
Exchange-traded
derivatives
|
1,628
|
1,180
|
38%
|
1.6
|
1.2
|
28%
|
|
Total
|
Nm
|
Nm
|
Nm
|
4.4
|
4.2
|
6%
|
2 Total Group first trades have been adjusted to remove the
clients who traded in more than one product category to give a
unique first trade count.
In the Europe division, trading
revenue increased 18% to £63.1 million, reflecting 15% growth in
OTC derivatives revenue and 45% growth in exchange-traded
derivatives revenue from turbo products, which will be transitioned
to an OTC offering in the second half of the financial year. OTC
derivatives active clients declined 3% but revenue per client
increased 18% reflecting more supportive market conditions.
Exchange-traded derivatives active clients increased 5% and revenue
per client increased by 38%. First trades for the division
increased by 6% on H1 FY24.
Institutional and Emerging Markets
|
|
Trading revenue
(£m)
|
Active clients
(000)1
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
41.1
|
34.4
|
20%
|
12.8
|
13.1
|
(3%)
|
|
Exchange-traded
derivatives
|
0.1
|
0.0
|
Nm
|
0.0
|
0.0
|
Nm
|
|
Stock trading and
investments
|
0.4
|
0.2
|
89%
|
0.9
|
0.8
|
4%
|
|
Total
|
41.6
|
34.6
|
20%
|
13.5
|
13.8
|
(2%)
|
1 Total Institutional and Emerging Markets active clients have
been adjusted to remove the clients who are active in more than one
product category (multi-product clients) to give a unique client
count.
|
|
Revenue per client
(£)
|
First trades
(000)2
|
|
|
H1 FY25
|
H1 FY24
|
Change %
|
H1 FY25
|
H1 FY24
|
Change %
|
|
OTC derivatives
|
3,222
|
2,618
|
23%
|
1.7
|
1.9
|
(8%)
|
|
Exchange-traded
derivatives
|
2,000
|
1,296
|
54%
|
0.0
|
0.0
|
Nm
|
|
Stock trading and
investments
|
498
|
273
|
82%
|
0.1
|
0.0
|
23%
|
|
Total
|
Nm
|
Nm
|
Nm
|
1.8
|
1.9
|
(8%)
|
2 Total Group first trades have been adjusted to remove the
clients who traded in more than one product category to give a
unique first trade count.
In the Institutional and Emerging
Markets division, trading revenue increased by 20%, with almost all
of the revenue coming from OTC derivatives. Active clients reduced
by 3%, offset by a 23% increase in revenue per client. First trades
in the period reduced 8% on H1 FY24.
Net
interest income
Net interest income is driven by
client balances that are held off the Group balance sheet. Net
interest income on client balances in H1 FY25 was £70.8 million, up
1% on the H1 FY24 total of £70.2 million. Interest income
represented 14% of total revenue, down from 15% in H1 FY24,
reflecting higher net trading
revenue.
In the US division, client cash
balances held off balance sheet at the end of the period were $2.1
billion (H1 FY24: $1.9 billion). This contributed £36.0 million of
interest income (H1 FY24: £37.3 million).
Outside the US, client cash
balances held off balance sheet at the end of the period were £2.2
billion (H1 FY24: £2.1 billion). This contributed £34.8 million of
interest income (H1 FY24: £32.9 million).
Adjusted operating costs
Adjusted operating costs for H1
FY25 were £277.4 million, 1% lower than H1 FY24.
In H1 FY24 adjusted operating
costs excluded £29.3 million, which reflected amortisation of
intangibles of £16.2 million relating to the tastytrade
acquisition, £2.7 million in retention awards associated with the
transaction, £0.5 million of non-recurring tastytrade integration
costs, and £9.9 million of one-off costs relating to the
operational improvement programme announced in October
2023.
In H1 FY25 our approach to cost
adjustments was reviewed, and as a result we have not made any
adjustments in the period for one-off restructuring costs. Costs
incurred in the period, including the costs of the Spectrum
closure, have been included as BAU costs. H1 FY25 adjustments
to operating costs only included ongoing non-cash costs in relation
to the tastytrade acquisition, which totalled £17.5 million and
included £15.2m of amortisation of the tastytrade intangible, and
£2.2m related to retention awards.
Adjusted operating costs
|
£m
|
H1 FY25
|
H1 FY24
|
Change %
|
|
Fixed remuneration
|
95.4
|
100.2
|
(5%)
|
|
Advertising and
marketing
|
42.2
|
43.8
|
(4%)
|
|
Revenue related costs
|
23.0
|
30.6
|
(25%)
|
|
IT, structural market data and
communications
|
28.6
|
23.8
|
20%
|
|
Depreciation and
amortisation
|
16.1
|
17.7
|
(9%)
|
|
Legal and professional
|
16.5
|
14.2
|
16%
|
|
Other costs
|
23.0
|
25.7
|
(11%)
|
|
Variable remuneration
|
32.6
|
25.1
|
30%
|
|
Total adjusted operating costs1
|
277.4
|
281.1
|
(1%)
|
|
|
|
Headcount - average
|
2,489
|
2,754
|
(10%)
|
|
Headcount - year end
|
2,440
|
2,747
|
(11%)
|
1H1 FY25 adjusted operating costs exclude £17.5 million of
recurring non-cash items relating to the tastytrade acquisition. H1
FY24 adjusted operating costs exclude £18.9 million of recurring
non-cash items and £0.5 million of one off costs relating to the
tastytrade acquisition, and £9.9 million of one off non-recurring
costs related to the operational improvement programme.
Fixed remuneration was £95.4
million, down 5% on H1 FY24. This reflects the reduction in
headcount across the period, reflecting the operational improvement
programme announced in October 2023, offset with some one-off
restructuring costs, and a reduction in the capitalisation of
salary costs.
Advertising and marketing spend in
the year was £42.2 million, reducing 4% on H1 FY24 as savings were
realised by more targeted resource allocation enhancing marketing
return on investment.
Revenue related costs include
market data charges, client payment charges, provisions for client
and counterparty credit losses and brokerage trading fees. Revenue
related costs in total decreased by 25% to £23.0 million (H1 FY24:
£30.6 million), reflecting normalisation in client and counterparty
credit losses, following a significant charge in H1 FY24 (H1 FY25:
£0.6 million, H1 FY24: £10.5 million). Credit card and brokerage
trading costs increased year-on-year, reflecting higher levels of
client activity.
IT maintenance, structural market
data charges, and communications costs were £28.6 million,
increasing 20% on H1 FY24, reflecting investment in digitalisation
of business processes and relocation of our data centres. Market
data costs increased driven by higher usage and inflationary
pressures.
Depreciation and amortisation was
£16.1m, reducing by 9%, reflecting the reduction in the
amortisation run rate as the remaining value of the DailyFX domain
name was impaired at FY24 year end. This figure also includes a
£3.2m impairment of intangible assets related to the exit from
Spectrum.
Legal and professional fees were
£16.5 million, an increase of 16%, reflecting higher costs in
relation to strategic and operational projects including £1.8m in
relating to the acquisition of Freetrade.
Other costs, which include travel
and entertainment, regulatory fees and irrecoverable VAT, dropped
11% to £23.0 million, reflecting a reduction in irrecoverable VAT,
premises costs, and lower staff-related costs.
Variable remuneration of £32.6
million includes the general bonus accrual, share schemes and sales
bonuses. The charge for the general bonus pool was £18.6 million,
up 67% reflecting the Group's performance against internal targets
relative to the comparative period. Share scheme costs, which
relate to long-term incentive plans for senior management,
increased by 5% to £11.4 million (H1 FY24: £10.9 million) including
one-off acceleration of charges for outgoing executives' share
awards.
Net finance income
Net finance income in the period
was £19.8 million, up 28% on H1 FY24. Within this, finance income
was £33.6 million (H1 FY24: £26.1 million), partly offset by
finance costs of £13.8 million (H1 FY24: £10.7 million).
Finance costs are largely fixed,
but include interest paid on client cash deposits held on balance
sheet which increased by £3.0 million. Finance income reflects the
interest earned on corporate cash balances and client funds that
are held on balance sheet. Client funds held on balance sheet
increased 20% to £490.1 million (H1 FY24: £410.2
million).
Taxation
The effective tax rate (ETR)
applied to the Group's H1 FY25 profit is 24.6% (FY24: 23.2%). The
increase in the H1 FY25 ETR is mainly due to the tax implications
of the Spectrum closure and the UK banking surcharge of 3% on IG
Markets taxable profit exceeding £100m. The ETR is dependent on a
mix of factors including taxable profit by geography, the
availability and use of tax incentives and tax losses.
The OECD Pillar 2 global minimum
tax rules came into force for the Group from 1 June 2024. The tax
footprint of the Group is such that the Pillar 2 rules are not
expected to have a material impact on the Group's tax charge as
there is currently insignificant activity in low tax
jurisdictions.
Earnings per share
|
£m
(unless stated)
|
H1 FY25
adjusted
|
H1 FY25
|
H1 FY24
adjusted
|
H1 FY24
|
Adjusted change
%
|
Change %
|
|
Profit before tax
|
266.8
|
249.3
|
205.7
|
176.4
|
30%
|
41%
|
|
Tax expense
|
(65.6)
|
(61.3)
|
(50.9)
|
(43.7)
|
29%
|
40%
|
|
Profit after tax for the period
|
201.2
|
188.0
|
154.8
|
132.7
|
30%
|
42%
|
|
Weighted average number of shares
for the calculation of EPS (millions)
|
363.9
|
363.9
|
397.6
|
397.6
|
(8%)
|
(8%)
|
|
Basic earnings per share (pence)
|
55.3
|
51.7
|
38.9
|
33.4
|
42%
|
55%
|
Basic earnings per share increased
to 55.3 pence (H1 FY24: 38.9 pence) on an adjusted basis. This was
due to an increase in adjusted profit after tax of 30% and lower
weighted average number of shares, reducing from 397.6 million
shares in H1 FY24 to 363.9 million shares in H1 FY25, as a result
of share buybacks.
Return of shareholder funds
The proposed interim dividend of
13.86 pence per share was approved by the Board on 22 January 2025
and has not been included as a liability as at 30 November 2024.
This dividend, totalling approximately £49.1 million, will be paid
on 3 March 2025 to those members on the register at the close of
business on 31 January 2025.
During H1 FY25, the Group has
repurchased 17,667,560 shares, for total consideration of £167.2
million (including related costs of £4.1 million). On 22
January 2025, the Board approved the extension of share buyback
programme by a further £50 million to a total of £200 million which
is expected to be completed in H2 FY25.
Summary Group balance sheet
The Group continues to operate
with a strong and liquid balance sheet, with net assets as at 30
November 2024 of £1,795.2 million (31 May 2024: £1,889.5 million).
The balance sheet is presented on a management basis which reflects
the Group's use of alternative performance measures to monitor its
financial position. A reconciliation of these alternative
performance measures to the corresponding UK-adopted International
Accounting Standards balances is presented in the
appendix.
|
£m
|
30 Nov
2024
|
31 May
2024
|
Change %
|
|
Goodwill
|
599.1
|
599.0
|
-
|
|
Intangible assets
|
195.5
|
216.6
|
(10%)
|
|
Property, plant and
equipment1
|
16.5
|
20.3
|
(19%)
|
|
Operating lease net
liabilities
|
(1.7)
|
(2.3)
|
(26%)
|
|
Other investments
|
0.6
|
1.8
|
(67%)
|
|
Investments in associates
|
9.7
|
9.9
|
(2%)
|
|
Fixed assets
|
819.7
|
845.3
|
(3%)
|
|
Cash2
|
882.5
|
912.3
|
(3%)
|
|
Net amounts due from
brokers
|
863.7
|
783.1
|
10%
|
|
Own funds in client money
|
20.6
|
47.3
|
(56%)
|
|
Financial investments
|
75.4
|
115.7
|
(35%)
|
|
Liquid assets
|
1,842.2
|
1,858.4
|
(1%)
|
|
Issued debt
|
(299.5)
|
(299.5)
|
-
|
|
Client funds held on balance
sheet
|
(490.1)
|
(430.5)
|
14%
|
|
Turbo warrants
|
(4.5)
|
(4.5)
|
-
|
|
Own funds
|
1,048.1
|
1,123.9
|
(7%)
|
|
Working capital
|
(44.4)
|
(55.2)
|
(20%)
|
|
Net tax
(payable)/receivable
|
(1.7)
|
2.2
|
(177%)
|
|
Net deferred income tax
liability
|
(26.5)
|
(26.7)
|
(1%)
|
|
Net assets
|
1,795.2
|
1,889.5
|
(5%)
|
1 Excludes right-of-use assets
2 As per the Consolidated Statement of Cash Flow
The majority of the Group's Fixed
assets are held in US Dollars, including goodwill of £497.2 million
attributed to the tastytrade business. Fixed assets carrying value
reduced by £25.6 million in the period mainly due to the
amortisation of intangibles recognised from the tastytrade
acquisition.
The Group measures the strength of
its liquidity using an own funds measure rather than cash. Own
funds is a combination of assets held by the Group which can be (or
already are) deployed to meet its liquidity requirements, less
restricted cash or amounts payable to clients. The liquidity
requirements include broker margin, regulatory liquidity and
working capital needs of its subsidiaries, and the funding of
adequate buffers in segregated client money accounts. This broader
measure is a more stable metric to assess the Group's liquidity
position in meeting its day-to-day liquidity requirements, and a
measure of liquidity net of client funds on balance sheet, which
are repayable on demand, and issued debt.
The Group continues to be highly
cash generative, with £240.6 million (H1 FY24: £70.9 million)
generated from operations. Own funds decreased by £75.8 million
during H1 FY25 due to a £16.2 million decrease in liquid assets and
a £59.6 million increase in client funds. The ongoing share buyback
continues to be a key driver in the reduction of the own funds
balance, including a payment of £167.0 million (H1 FY24: £149.7
million) to acquire shares in the period.
|
£m
|
H1 FY25
|
H1 FY24
|
|
Own funds generated from operations
|
262.5
|
183.8
|
|
As a percentage of operating
profit
|
114%
|
113%
|
|
Income taxes paid
|
(59.4)
|
(66.4)
|
|
Net own funds generated from operations
|
203.1
|
117.4
|
|
Net own funds generated from investing
activities
|
13.5
|
2.3
|
|
Purchase of own shares held in
Employee Benefit Trust
|
(9.5)
|
(13.3)
|
|
Payments made for share
buyback
|
(167.0)
|
(149.7)
|
|
Equity dividends paid to owners of
the parent
|
(117.9)
|
(126.7)
|
|
Net own funds used in financing activities
|
(294.4)
|
(289.7)
|
|
Decrease in own funds
|
(77.8)
|
(170.0)
|
|
Own funds at the start of the period
|
1,123.9
|
1,207.3
|
|
Decrease in own funds
|
(77.8)
|
(170.0)
|
|
Impact of movement in foreign
exchange rates
|
2.0
|
(1.1)
|
|
Own funds at the end of the period
|
1,048.1
|
1,036.2
|
Liquidity
The Group maintains a strong
liquidity position, ensuring sufficient liquidity under both normal
circumstances and stressed conditions to meet its liquidity
requirements.
|
£m
|
30 Nov
2024
|
31 May
2024
|
Change %
|
|
Liquid assets
|
1,842.2
|
1,858.4
|
(1%)
|
|
Broker margin requirement
|
(763.7)
|
(677.7)
|
13%
|
|
Cash balances in non-UK
subsidiaries
|
(372.4)
|
(381.1)
|
(2%)
|
|
Own funds in client money
|
(20.6)
|
(47.3)
|
(56%)
|
|
Available liquidity
|
685.5
|
752.3
|
(9%)
|
Available liquidity is a measure
of liquid assets that are not yet deployed to meet liquidity
requirements and that are available at short notice. This available
liquidity is typically used to meet broker margin increases and to
repay client funds on balance sheet, which are repayable on
demand.
The Group optimises its liquidity
position by centralising funds within the UK, where the majority of
market risk resides. This ensures sufficient liquidity to be
deployed appropriately as required. The Group continually reviews
and optimises the return on deploying this liquidity, through fixed
income instruments, money market funds and bank deposits.
Significant time has been invested into developing strong banking
relationships to ensure competitive interest on bank
deposits.
The Group's available liquidity is
supported by its strong and diverse funding profile. Title transfer
arrangements provide £384.3 million (31 May 2024: £328.7 million)
of liquidity which the Group partially uses to meet its broker
margin requirements. The Group has a £400.0 million revolving
credit facility, which was undrawn as of 30 November 2024 and a
£250.0 million committed repo facility providing the ability to
quickly and efficiently convert financial investments into
cash.
The Group's funding profile is
further supported by its £1.0 billion EMTN programme, from which it
has £300.0 million notes in issue, maturing November 2028. The
Group maintains an active dialogue with a variety of debt
stakeholders, leading to its long-term credit rating from Fitch
being upgraded to BBB in August 2024.
In addition to the cash recognised
on the balance sheet, as at 30 November 2024, the Group held
£2,213.8 million (31 May 2024: £2,282.6 million) of client money in
segregated bank accounts which are held separately from the Group's
own cash balances. Segregated client money is excluded from both
the Group's balance sheet and liquid assets as the Group does not
have control over these balances. For client money balances in the
US, £1,623.5 million (31 May 2024 : £1,511.6 million) is held by
clearing brokers. The Group is also exposed to the risk associated
with customers failing to discharge their contractual obligations
with the clearing brokers.
Regulatory capital
The Group is supervised on a
consolidated basis by the UK's Financial Conduct Authority (FCA),
which requires it to hold sufficient regulatory capital at both
Group and in its UK regulated entities to cover risk exposures. The
main factors which drive the Group's regulatory capital
requirements are market, credit and operational risks. Credit risks
include potential client debts in the event of a sudden market move
as well as exposure to hedging counterparties and banking
counterparties (for firm and client money) should one or more of
them default. Operational risk covers a wide range of potential
severe events, from a ransomware attack to a manual error when
entering a trade on the dealing system. Market risk is volatile in
nature since the Group is hedging high volumes of trades from
clients around the world and positions are changing minute by
minute.
The Group is required to notify
the FCA if it is operating within close range of its regulatory
capital thresholds, and it may choose to take actions to restore
capital levels or to reduce capital requirements if it is close to
these thresholds. The Group also has regulated entities in overseas
jurisdictions which are subject to the rules set by other
regulators. These regulations are calculated on a different basis
to the FCA regulations and may result in incremental capital
requirements or the holding of additional buffers.
The Group's regulatory capital
resources, which totalled £944.4 million at 30 November 2024 (31
May 2024: £936.9 million) are an adjusted measure of shareholders'
funds. Shareholders' funds comprise share capital, share premium,
retained earnings, translation reserve, merger reserve and other
reserves.
The Group's regulatory capital
requirement as at 30 November 2024 was £286.0 million (31 May 2024:
£298.6 million). The Group's capital headroom, once interim profits
have been approved for use by the FCA, will be £658.4 million (31
May 2024: £638.3 million), demonstrating the Group's solid capital
base.
|
£m
|
30 Nov
2024
|
31 May
2024
|
|
Shareholders' funds
|
1,795.2
|
1,889.5
|
|
Less foreseeable / declared
dividends
|
(49.1)
|
(118.0)
|
|
Less remaining share
buyback
|
(18.0)
|
(29.7)
|
|
Less goodwill and intangible
assets
|
(749.3)
|
(767.3)
|
|
Less deferred tax assets
|
(22.7)
|
(24.6)
|
|
Less significant investments in
financial sector entities
|
(10.3)
|
(11.7)
|
|
Less value adjustment for prudent
valuation
|
(1.4)
|
(1.3)
|
|
Regulatory capital resources
|
944.4
|
936.9
|
|
Total requirement
|
286.0
|
298.6
|
|
Headroom above minimum capital requirement
|
658.4
|
638.3
|
Having assessed regulatory capital
headroom and alternative uses of capital, on 22 January 2025, the
Board approved an extension of £50.0 million to the existing share
buyback programme which will be completed in H2 FY25.
Consolidated Interim Income Statement
for the six months ended 30 November 2024
(unaudited)
1.
General
Information and basis of preparation
General Information
The Consolidated Interim Condensed
Financial Statements of IG Group Holdings plc and its subsidiaries
(together 'the Group') for the six months ended 30 November 2024
were authorised for issue by the Board on 22 January 2025. IG Group
Holdings plc is a public company limited by shares, which is listed
on the London Stock Exchange and incorporated and domiciled in
England and Wales. The address of the registered office is Cannon
Bridge House, 25 Dowgate Hill, London, EC4R 2YA.
The interim financial information
for the six months ended 30 November 2024, together with the
comparative information contained in this report, does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. The interim financial information is
unaudited but has been reviewed by the Group's auditors,
PricewaterhouseCoopers LLP, and their report is included at the end
of these Consolidated Interim Condensed Financial Statements. The
Financial Statements for the year ended 31 May 2024 (FY24 Financial
Statements) have been audited and reported on by the Group's
auditors and delivered to the Registrar of Companies. The auditors
report on the FY24 Financial Statements was unqualified, did not
include a reference to any matters to which they drew attention by
way of emphasis without qualifying its report and did not contain a
statement under section 498(2) or (3) of the Companies Act
2006.
Basis of preparation
(a) Compliance with UK-adopted
International accounting standards
The Consolidated Interim Condensed
Financial Statements for the six months ended 30 November 2024 have
been prepared in accordance with the Disclosure Guidance and
Transparency Rules (DTR) sourcebook of the United Kingdom's
Financial Conduct Authority and in accordance with UK-adopted
International Accounting Standard 34 - Interim Financial Reporting.
The Consolidated Interim Condensed Financial Statements are
presented in Sterling.
The Consolidated Interim Condensed
Financial Statements do not include all the information and
disclosures required in the FY24 Financial Statements and should be
read in conjunction with the Group's Annual Report for the year
ended 31 May 2024 (FY24 Annual Report) which has been prepared in
accordance with the UK-adopted International Accounting Standards
and with the requirements of the Companies Act 2006 as applicable
to companies reporting under those standards.
Throughout this report, H1 FY25
refers to the six months ended 30 November 2024 FY24 refers to the
financial years ended 31 May 2024 and H1 FY24 refers to the six
months ended 30 November 2023.
(b) New accounting standards and
interpretations
The IASB has published a number of
amendments to accounting standards that are effective for annual
reporting periods beginning on or after 1 January 2024. These
include amendments published to IFRS 7 - Financial Instruments:
Disclosures, IFRS 16 - Leases, IAS 1 - Presentation of Financial
Statements, IAS 7 - Statement of Cash Flows, IAS12 - Income Taxes
and IAS 21 - The Effects of Changes in Foreign Exchange Rates. The
Group has assessed the impact of these amendments and has
determined there to be insignificant impact on the Consolidated
Interim Condensed Financial Statements.
The Group has not early adopted
any standard, interpretation or amendment that has been issued but
is not yet effective.
(c) Critical accounting estimates and
judgements
The preparation of interim
financial statements required management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the amounts reported for assets and liabilities as at
the reporting date, and the amounts reported for revenue and
expenses during the period. The nature of judgements and estimates
means that actual outcomes could differ from those
estimates.
In the Directors' opinion,
there are no accounting estimates or judgments
that have a material impact on the presentation or measurement of
items recorded in the Consolidated Interim Condensed Financial
Statements, except for the judgement below:
Assessment of impairment indicators of the US Cash Generating
Unit (CGU) - A review has been
performed to consider whether indicators of impairment are present
as at 30 November 2024 for the US CGU, taking into account both
internal and external factors which are outlined in note 8. The
judgement that there were no impairment indicators present means
that no formal impairment test has been performed. The Group
disclosed a critical accounting estimate relating to the
recoverable amount of the US CGU in the FY24 Financial Statements
and concluded that the recoverable amount was not sensitive to
reasonably possible change to assumptions.
(d) Going concern basis of
accounting
The Directors have prepared the
Consolidated Interim Condensed Financial Statements on a going
concern basis which requires the Directors to have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for a period of at least 12 months from the
date of approval of the Consolidated Interim Condensed Financial
Statements.
The Group meets its day-to-day
working capital requirements through its available liquid assets
and debt facilities. The Group's liquid assets exclude all monies
held in segregated client money accounts. In assessing whether it
is appropriate to adopt the going concern basis in preparing the
Consolidated Interim Condensed Financial Statements, the Directors
have considered the resilience of the Group, taking account of its
liquidity position and cash generation, the adequacy of capital
resources, the availability of external credit facilities and the
associated financial covenants, and stress-testing of liquidity and
capital adequacy that considers the principal risks faced by the
business. The principal risks and uncertainties which may affect
the Group in the second half of the financial year remain
consistent with those disclosed in the FY24 Annual
Report.
The Directors' assessment has
considered future performance, solvency and liquidity over a period
of at least 12 months from the date of approval of the Consolidated
Interim Condensed Financial Statements. The Board, following the
review by the Audit Committee, has a reasonable expectation that
the Group has adequate resources for that period, and confirms that
they consider it appropriate to adopt the going concern basis in
preparing the Consolidated Interim Condensed Financial
Statements.
1.
General Information and basis of
preparation (continued)
(e) Reclassification of
comparatives
In the prior period, proceeds from
sales and payments for purchases of financial investments were
shown on a net basis. In the current period, these are presented as
separate line items in the Consolidated Statement of Cash Flows to
comply with IAS 7. There were no transactions in the current
period, comparative figures have been adjusted for consistency,
showing proceeds of £90.8 million and purchases of £89.8 million
for the period ended 30 November 2023.
(f) Seasonality of
operations
The Directors consider that there
is no predictable seasonality to the Group's operations.
2. Material accounting
policies
The accounting policies adopted in
the preparation of the Consolidated Interim Condensed Financial
Statements are consistent with those followed in the preparation of
the FY24 Financial Statements.
3. Segmental
analysis
The Group's reportable segments are
based the information reviewed regularly by the Group's Chief
Operating Decision Maker (CODM), identified as Executive Directors,
for resource allocation and performance assessment.
The Group manages market risk and a
number of other activities on a Group-wide portfolio basis and
accordingly a large proportion of costs are incurred centrally.
These costs are not allocated to individual segments for
decision-making purposes for the CODM, and, accordingly, these
costs have not been allocated to segments. Additionally, the
Group's assets and liabilities are not allocated to individual
segments and are not reported as such for decision making purposes.
Therefore, the segmental analysis does not include a measure of
profitability, nor a complete segmented balance sheet, as this does
not reflect information received by the CODM on a regular basis.
The Group continues to evaluate and consider the most appropriate
metrics to measure performance of divisions in future reviews to
provide a more comprehensive performance assessment.
In prior years, the Group reported
an alternative performance measure of total revenue, comprising
trading revenue and interest income, split by product. In July
2024, the Group restructured to create separate decentralised
divisions, enhancing agility and responsiveness of the business to
respond to local client needs. Consequently, the information
presented to the CODM during H1 FY25 was revised to better assess
the performance of the Group by division, increasing ownership and
accountability. The CODM continues to be presented with, on a
regular basis total revenue split by product, with an additional
split by division. The divisions comprise UK and Ireland, US, APAC
& ME, Europe (including Switzerland) and Institutional &
Emerging Markets (EM).
Operating Segments
|
|
UK &
Ireland
|
US
|
APAC &
ME
|
Europe
|
Institutional &
EM
|
Total
|
|
30 November 2024
(unaudited)
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
OTC derivatives
|
127.4
|
7.3
|
129.2
|
55.4
|
41.1
|
360.4
|
|
Exchange-traded
derivatives
|
0.2
|
70.0
|
-
|
7.7
|
0.1
|
78.0
|
|
Stock trading and
investments
|
10.7
|
-
|
2.2
|
-
|
0.4
|
13.3
|
|
Segmental net trading revenue
|
138.3
|
77.3
|
131.4
|
63.1
|
41.6
|
451.7
|
|
Net interest on client
money
|
21.9
|
36.0
|
6.9
|
3.0
|
3.0
|
70.8
|
|
Segmental total revenue
|
160.2
|
113.3
|
138.3
|
66.1
|
44.6
|
522.5
|
|
|
UK &
Ireland
|
US
|
APAC &
ME
|
Europe
|
Institutional &
EM
|
Total
|
|
30 November 2023
(unaudited)
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
OTC derivatives
|
115.7
|
7.3
|
122.2
|
48.1
|
34.4
|
327.7
|
|
Exchange-traded
derivatives
|
-
|
58.2
|
-
|
5.4
|
-
|
63.6
|
|
Stock trading and
investments
|
9.3
|
-
|
1.6
|
-
|
0.2
|
11.1
|
|
Segmental net trading revenue
|
125.0
|
65.5
|
123.8
|
53.5
|
34.6
|
402.4
|
|
Net interest on client
money
|
23.8
|
37.3
|
6.9
|
0.8
|
1.4
|
70.2
|
|
Segmental total revenue
|
148.8
|
102.8
|
130.7
|
54.3
|
36.0
|
472.6
|
3. Segmental analysis
(continued)
The geographical split reflects
the location of the office that manages the underlying client
relationships. Institutional clients have been allocated to the
appropriate geographies in the following presentation.
|
|
Unaudited
six
months ended
30
November 2024
|
Unaudited
six
months ended
30
November 2023 Restated
|
|
|
£m
|
£m
|
|
Net trading revenue by geography:
|
|
|
|
Australia
|
40.1
|
43.6
|
|
Japan
|
43.8
|
38.9
|
|
Singapore
|
38.1
|
35.1
|
|
Dubai
|
12.8
|
8.4
|
|
APAC & ME
|
134.8
|
126.0
|
|
Emerging Markets
|
25.1
|
20.8
|
|
UK
& Ireland
|
146.8
|
132.7
|
|
US
|
77.4
|
65.7
|
|
Europe
|
67.6
|
57.2
|
|
Net trading revenue
|
451.7
|
402.4
|
|
Net interest on client funds -
US
|
36.0
|
37.3
|
|
Net interest on client funds -
Other
|
34.8
|
32.9
|
|
Total revenue
|
522.5
|
472.6
|
The Group does not derive more
than 10% of revenue from any one single client.
The Group has reclassified the
geographical classification to align with the new divisional
structure. EMEA Non-EU is no longer used with the following
resulting changes; Switzerland is now included in Europe, £10.7
million (30 November 2023: £10.0 million), Dubai is now included in
APAC & ME, £12.8 million (30 November 2023: £8.4 million) and
South Africa is now included in Emerging Markets, £4.4 million (30
November 2023: £2.9 million). Accordingly, the prior period
comparative balance for 30 November 2023 has been restated to
reflect this classification.
The segmental breakdown of
non-current assets excluding financial investments, other
investments as collateral and deferred income tax assets, based on
geography is as follows:
|
|
Unaudited
six
months ended
30
November 2024
|
31 May
2024 Restated
|
Unaudited
six
months ended
30
November 2023 Restated
|
|
|
£m
|
£m
|
£m
|
|
US
|
699.5
|
716.5
|
740.6
|
|
UK & Ireland
|
126.2
|
133.3
|
147.7
|
|
Europe
|
10.4
|
12.0
|
7.4
|
|
APAC & ME
|
8.7
|
8.5
|
7.6
|
|
Emerging Markets
|
2.4
|
2.4
|
2.4
|
|
Total non-current assets
|
847.2
|
872.7
|
905.7
|
The Group has reclassified the
geographical classification to align with the new divisional
structure. EMEA Non-EU is no longer used with the following
resulting changes; Switzerland is now included in Europe, £3.9
million (31 May 2024: £4.0 million, 30 November 2023: £0.6
million), India and Dubai is now included in APAC & ME, £3.7
million (31 May 2024: £2.7 million, 30 November 2023: £2.6 million)
and South Africa is now included in Emerging Markets, £2.4 million
(31 May 2024; £2.4 million, 30 November 2023: £2.4 million).
Accordingly, the prior period comparative balances for 31 May 2024
and 30 November 2023 have been restated to reflect this
classification.
4. Operating
costs
|
|
Unaudited
six
months ended
30
November 2024
|
Unaudited
six
months ended
30
November 2023
|
|
|
£m
|
£m
|
|
Fixed remuneration
|
95.2
|
109.1
|
|
Variable remuneration
|
35.0
|
27.7
|
|
Employee related expenses
|
130.2
|
136.8
|
|
Advertising and
marketing
|
42.2
|
43.8
|
|
Depreciation, amortisation and
impairment
|
31.4
|
32.9
|
|
IT, market data and
communications
|
32.0
|
27.2
|
|
Trading related costs
|
19.3
|
17.0
|
|
Legal and professional
costs
|
16.1
|
15.4
|
|
Premises-related costs
|
4.1
|
6.0
|
|
Regulatory fees
|
1.1
|
(0.7)
|
|
Other costs
|
17.8
|
21.5
|
|
Total operating costs
|
294.2
|
299.9
|
5.
Tax
expense
The tax expense of £61.3 million
(H1 FY24: £43.7 million) is recognised based on management's
estimate of the effective tax rate for the full year of 24.6% (H1
FY24: 24.8%), applied to profits generated from operations. The
actual effective tax rate for FY24 was 23.2%. The factors affecting
the tax charge in future periods are detailed in Note 9 of the FY24
Annual Report.
The OECD Pillar 2 global minimum
tax rules come into force for the Group from FY25. The tax
footprint of the Group is such that the Pillar 2 rules are not
expected to have a material impact on the Group's tax charge as
there is currently insignificant activity in low tax jurisdictions.
The Group has applied the exception under IAS 12 - Income Taxes to
recognising and disclosing information about deferred taxes related
to Pillar 2 and therefore, there was no impact on the recognition
and measurement of deferred tax balances as a result of the
legislation being substantively enacted.
6.
Earnings per
ordinary share
Basic earnings per ordinary share
is calculated by dividing the profit for the period attributable to
ordinary equity holders of the parent by the weighted average
number of ordinary shares in issue during the period, excluding
shares held in treasury and shares held in the Group's Employee
Benefit Trusts. Diluted earnings per ordinary share is calculated
using the same profit figure as that used in basic earnings per
ordinary share and by adjusting the weighted average number of
ordinary shares assuming the vesting of all outstanding share
scheme awards.
|
Weighted average number of ordinary
shares
|
Unaudited
30
November 2024
|
Unaudited
30
November 2023
|
|
|
|
|
|
Basic
|
363,896,654
|
397,611,659
|
|
Dilutive effect of share-based
payments
|
4,071,377
|
3,740,573
|
|
Diluted
|
367,968,031
|
401,352,232
|
|
|
Unaudited
six
months ended
30 November 2024
|
Unaudited
six
months ended
30 November 2023
|
|
|
|
|
|
Basic earnings per ordinary
share
|
51.7p
|
33.4p
|
|
Diluted earnings per ordinary
share
|
51.1p
|
33.1p
|
7.
Dividends paid
and proposed
|
|
Unaudited
six
months ended
30
November 2024
|
Unaudited
six
months ended
30
November 2023
|
|
|
£m
|
£m
|
|
Final dividend for FY24 of 32.64
pence per share (FY23: 31.94 pence per share)
|
117.9
|
126.7
|
The proposed interim dividend for
FY25 of 13.86 pence per share, totalling approximately £49.1
million, was approved by the Board on 22
January 2025 and has not been included as a
liability as at 30 November 2024. This dividend will be paid on 3
March 2025 to those members on the register at the close of
business on 31 January 2025.
8.
Goodwill
Goodwill has been allocated to
CGUs as follows:
|
|
Unaudited
30
November 2024
|
31 May
2024
|
Unaudited
30
November 2023
|
|
|
£m
|
£m
|
£m
|
|
US
|
497.2
|
497.2
|
501.9
|
|
UK
|
100.9
|
100.9
|
100.9
|
|
South Africa
|
0.9
|
0.8
|
0.8
|
|
Australia
|
0.1
|
0.1
|
0.1
|
|
|
599.1
|
599.0
|
603.7
|
The movement in the goodwill
balance is attributable to foreign exchange movements. For the
allocated goodwill above, there are no accumulated impairment
losses recognised as at 30 November 2024.
Goodwill
arose as follows:
· US -
from the acquisition of tastytrade on 28 June 2021.
· UK - from the reorganisation of the UK
business on 5 September 2003.
· South
Africa - from the acquisition of Ideal CFDs on 1 September
2010.
· Australia - from the acquisition of the non-controlling
interest in IG Australia Pty Limited in the year ended 31 May
2006.
The Group performs a full goodwill
impairment assessment for its annual financial statements and when
circumstances indicate that the carrying values may be impaired.
The Group's full impairment assessment carried out for the FY24
Financial Statements was based on value-in-use calculations. The
key assumptions used to determine the value-in-use for the
different cash generating units are disclosed in the FY24 Financial
Statements.
An assessment of both qualitative
and quantitative factors has been performed to identify whether any
indicators of impairment are present as at 30 November 2024. Having
performed this assessment, management concluded that there was no
indication that goodwill may be impaired, for any of the Group's
CGUs, as the factors considered do not currently indicate a
long-term deterioration of the businesses and profitability.
Management will continue to perform an annual impairment test,
incorporating cash flow projections based on the annual budgets
approved by the Board, for the FY25 Financial
Statements.
US CGU:
The Group's largest goodwill
balance is associated with the US CGU. Given the judgement involved
(refer to Note 2) in determining whether there are any indicators
of impairment, further details on the assessment of qualitative and
quantitative factors are provided below.
Performance of the US CGU:
During the period, the CGU
demonstrated continued growth with H1 FY25 performance in relation
to new client acquisition, net trading revenue and client interest
income being higher than H1 FY24. Management have not identified an
indicator of impairment when reviewing the CGU performance to
date.
Interest rate movement:
Interest rate movements impact
both the discount rate and future cash flows. The discount rate
used to calculate the recoverable amount of the US CGU in FY24 is a
post-tax weighted average cost of capital (WACC) which is specific
to the US geographical region. The discount rate depends on the
current market assessment of the time value of money, determined by
external market information such as interest rates. Future
cashflows include interest from client funds, which can increase as
a result of higher interest rates. Having considered the impact of
the decline in interest rates on both the future cash flows and the
discount rate, management have determined that the decline in
interest rate as at 30 November 2024 does not represent an
indicator of impairment.
Other factors:
Management have considered other
factors including changes to the regulatory environment and
observable decline in assets such as technology as part of the
assessment. No indicator of impairment has been
identified.
9. Intangible
assets
|
|
Customer
relationships
|
Trade
names
|
Non-compete arrangements
|
Internally developed software
|
Domain
names
|
Software
and licences
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Net book values
|
|
|
|
|
|
|
|
|
30 November 2023 -
(unaudited)
|
135.8
|
52.3
|
16.3
|
31.1
|
9.4
|
7.3
|
252.2
|
|
31 May 2024
|
125.7
|
49.7
|
13.0
|
23.1
|
-
|
5.1
|
216.6
|
|
30 November 2024 -
(unaudited)
|
116.8
|
47.7
|
9.9
|
17.3
|
-
|
3.8
|
195.5
|
The Group has performed a review
of intangible assets as at 30 November 2024 and concluded that
there are no indicators of impairment for customer relationships,
trade names, non-compete arrangements and software and licences.
The movements in carrying value of these intangible assets in the
current period are attributable to accumulated amortisation and
foreign exchange movements. The movements in carrying value of
internal development in the current period are attributable to
additions, disposals, accumulated amortisation, impairment losses
and foreign exchange movements.
10.
Financial
investments
|
|
Unaudited
30
November 2024
|
31 May
2024
|
Unaudited
30
November 2023
|
|
|
£m
|
£m
|
£m
|
|
UK Government securities
|
469.2
|
460.7
|
615.5
|
|
Split as:
|
|
|
|
|
Non-current portion
|
304.7
|
351.4
|
477.1
|
|
Current portion
|
164.5
|
109.3
|
138.4
|
The Group held £393.8 million UK
Government securities as at 30 November 2024 (31 May 2024: £345.0
million and 30 November 2023: £392.3 million) to satisfy margin
requirements.
The Group also held £135.6 million
(31 May 2024: £139.2 million and 30 November 2023: £36.3 million)
of financial assets as collateral from certain brokers, which are
not recognised on balance sheet.
11.
Cash and cash
equivalents
|
|
Unaudited
30
November 2024
|
31 May
2024
|
Unaudited
30
November 2023
|
|
|
£m
|
£m
|
£m
|
|
Cash at bank
|
508.7
|
622.6
|
472.0
|
|
Money market funds
|
378.2
|
360.6
|
114.7
|
|
|
886.9
|
983.2
|
586.7
|
Segregated client funds are held
in segregated client money accounts which restrict the Group's
ability to control the monies and are therefore held off-balance
sheet. The amount of segregated client funds held at 30 November
2024 was £2,213.8 million (31 May 2024: £2,282.6 million; 30
November 2023: £2,131.9 million). The return received on managing
segregated client funds is included within net operating
income.
The above balances reconcile to
the amount of cash shown in the Consolidated Statement of Cash
Flows as at the end of the period as follows:
|
|
Unaudited
30
November 2024
|
31 May
2024
|
Unaudited
30
November 2023
|
|
|
£m
|
£m
|
£m
|
|
Cash as per Consolidated Statement
of Financial Position
|
886.9
|
983.2
|
586.7
|
|
Amounts due to pooling
arrangement
|
(4.4)
|
(70.9)
|
(9.6)
|
|
Balances as per Consolidated
Statement of Cash Flows
|
882.5
|
912.3
|
577.1
|
12.
Trade
receivables
|
|
Unaudited
30
November 2024
|
31 May
2024
|
Unaudited
30
November 2023
|
|
|
£m
|
£m
|
£m
|
|
Amounts due from
brokers
|
408.6
|
456.0
|
500.1
|
|
Own funds in client
money
|
32.8
|
49.4
|
48.1
|
|
Amounts due from
clients
|
3.4
|
2.9
|
8.4
|
|
|
444.8
|
508.3
|
556.6
|
Amounts due from brokers represent
balances with brokers and execution partners where the combination
of cash held on account and the valuation of financial derivative
open positions, or unsettled trade receivables, results in an
amount due to the Group.
Own funds in client money
represent the Group's own cash held in segregated client funds, in
accordance with the UK's Financial Conduct Authority (FCA) CASS
rules and similar rules of other regulators in whose jurisdiction
the Group operates and includes £3.4 million (31 May 2024: £16.0
million and 30 November 2023: £11.3 million) to be transferred to
the Group on the following business day.
Amounts due from clients arise
when clients' total funds held with the Group are insufficient to
cover any trading losses incurred by clients, when clients utilise
trading credit limits or when clients are due to pay the Group fees
in relation to the services received. Amounts due from clients are
presented net of an allowance for impairment.
Allowances for expected credit
losses on trade receivable balances are disclosed in note
20.
13.
Other
assets
Other assets are cryptocurrency
assets and rights to cryptocurrency assets, which are owned and
controlled by the Group for the purpose of hedging the Group's
exposure to clients' cryptocurrency trading positions. The Group
holds rights to cryptocurrency assets on exchange and in vaults as
follows:
|
|
Unaudited
30
November 2024
|
31 May
2024
|
Unaudited
30
November 2023
|
|
|
£m
|
£m
|
£m
|
|
Exchange
|
1.4
|
0.8
|
1.2
|
|
Vaults
|
64.1
|
35.8
|
23.7
|
|
|
65.5
|
36.6
|
24.9
|
Other assets are measured at fair
value less costs to sell. Other assets are level 2 assets in
accordance with the fair value hierarchy set out in note 29 of the
FY24 Annual report.
14.
Debt securities
in issue
The Group has issued £300.0
million 3.125% senior unsecured bonds due in 2028. The issued debt
has been recognised at fair value less transaction fees. As at 30
November 2024, £1.2 million unamortised arrangement fees are
recognised on the balance sheet (31 May 2024: £1.4 million and 30
November 2023: £1.5 million).
The Group also has access to a
£400.0 million revolving credit facility. The revolving credit
facility will mature in October 2026.
Under the terms of the revolving
credit facility agreement, the Group is required to comply with
financial covenants covering maximum levels of leverage and debt to
equity. The Group has complied with all covenants throughout the
reporting period.
15.
Trade
payables
|
|
Unaudited
30
November 2024
|
31 May
2024
Restated
|
Unaudited
30
November 2023
Restated
|
|
|
£m
|
£m
|
£m
|
|
Client funds
|
|
|
|
|
UK
|
342.3
|
280.3
|
262.1
|
|
US
|
33.6
|
47.8
|
44.9
|
|
APAC
|
5.6
|
7.4
|
10.5
|
|
Europe
|
108.6
|
95.0
|
92.7
|
|
Total client funds
|
490.1
|
430.5
|
410.2
|
|
Issued turbo warrants
|
4.5
|
4.5
|
4.3
|
|
Amounts due to brokers
|
4.2
|
54.5
|
13.4
|
|
Amounts due to clients
|
13.1
|
3.8
|
3.3
|
|
|
511.9
|
493.3
|
431.2
|
Client funds reflects the Group's
liability for client monies which are recognised on balance sheet
in cash and cash equivalents. The geographical presentation of
client funds has been presented to align with operating segment
(note 3). Prior period comparatives have been restated
accordingly.
Amounts due to brokers represents
balances where the value of unsettled positions, or the value of
open derivatives positions held in accounts which are not covered
by an enforceable netting agreement, results in an amount payable
by the Group.
Amounts due to clients represent
balances that will be transferred from cash and cash equivalents
into segregated client funds on the following business day in
accordance with the UK's Financial Conduct Authority CASS rules and
similar rules of other regulators in whose jurisdiction the Group
operates.
16.
Share capital
and share premium
|
|
Number of
shares
|
Share
capital
|
Share
premium account
|
|
|
|
£m
|
£m
|
|
Allotted and fully paid:
|
|
|
|
|
Ordinary shares (0.005p)
|
|
|
|
|
At 31 May 2023
|
408,947,842
|
-
|
125.8
|
|
Shares bought back and immediately
cancelled
|
(22,547,134)
|
-
|
-
|
|
At 30 November 2023
(unaudited)
|
386,400,708
|
-
|
125.8
|
|
|
|
|
|
|
At 31 May 2024
|
373,093,741
|
-
|
125.8
|
|
Shares bought back and immediately
cancelled
|
(11,535,873)
|
-
|
-
|
|
At 30 November 2024
(unaudited)
|
361,557,868
|
-
|
125.8
|
On 19 July 2023, the Board
approved a £250.0 million buyback programme. The second £150.0
million tranche began on 7 November 2023 was finalised on 31 July
2024. This resulted in a further purchase and cancellation of
3,686,746 shares in H1 FY25.
On 24 July 2024, the Board
approved a £150.0 million buyback programme comprising two tranches
of £75.0 million each. The first of these tranches commenced on 12
August 2024 and was completed on 9 September 2024. This resulted in
the purchase and cancellation of 7,782,442 shares. The second £75.0
million tranche began on 25 September 2024. As at 30 November 2024,
6,198,372 shares had been bought back under this tranche for a
total consideration of £57.2 million. The Group has decided to hold
these shares in treasury and not cancel, unlike the previous
tranches.
As at 30 November 2024, for the
period of H1 FY25, the Group has repurchased 17,667,560 shares,
with an aggregate nominal value of £883, for total consideration of
£167.2 million (including related costs of £4.1
million).
During the period, the Group has
purchased 1,104,112 shares and utilised 1,368,728 shares held
in the Employee Benefit Trust to satisfy the exercise of the
employee share-based payment awards. The cost of the purchase is
part of other reserves and these shares are held in Employee
Benefit Trust.
No shares were issued to satisfy
the exercise of share awards in H1 FY25.
During H1 FY25, there have been no
changes to the Group's deferred redeemable shares (H1 FY24:
none).
17.
Related party
transactions
The basis of remuneration of key
management personnel remains consistent with that disclosed in the
FY24 Annual Report. During the period there has been a change in
the composition of key management personnel. As a result, the group
has incurred one-off costs amounting to £1.2 million in the period
which are recognised as part of operating costs in note
4.
The Group has a 9.3% shareholding
and 33% voting rights in Zero Hash Holdings Limited which is
accounted for as investment in associate on the Group's balance
sheet. Zero Hash facilitates cryptocurrency trading for clients of
tastytrade, Inc. (tastytrade). tastytrade recognised £0.1 million
revenue from Zero Hash during the period (H1 FY24: £0.1 million).
In addition to this, the Group has subleased part of its US office
to Zero Hash. The rental income generated in H1 FY25 from this
sublease is £0.1 million (H1 FY24: £0.1 million).
There were no other related party
transactions which had a material impact on the Consolidated
Interim Condensed Financial Statements.
18.
Contingent
liabilities and provisions
The Group is subject to legal and
regulatory risks in a number of jurisdictions which may result in
legal claims or regulatory action against the Group. Through the
Group's ordinary course of business there are ongoing legal
proceedings and engagements with regulatory authorities. Where
possible, an estimate of the potential financial impact of these
legal proceedings is made using management's best estimate, but
where the most likely outcome cannot be determined no provision is
recognised.
The Group has ongoing litigation
in respect of a class action lawsuit served against two of its
operating entities in 2023. The class action covers the period from
May 2017 to August 2023 and relates to the sale of OTC derivative
products to retail clients in Australia. The action is at an early
procedural stage and it is not possible to determine the potential
outcome or to reliably estimate any potential liability, so no
provision has been recognised.
The Group is also subject to a
group of claims that could have a financial impact of approximately
£19.7 million as at 30 November 2024 (31 May 2024: £19.4 million
and 30 November 2023: £19.9 million). The claims are for damages
arising from the alleged wrongful reversal of client nickel trades
on 8 March 2022. On 11 July 2024 the Group obtained a favourable
ruling from the High Court of the Republic of Singapore in relation
to one of the claims against the Group, totalling £13.3 million,
against which an appeal has been filed by the claimants. In October
2024, an additional claim relating to the nickel trade reversals
were filed in the Japanese Tokyo District Court in Japan. The claim
is for approximately £6.4 million. As both sets of claims are at an
early procedural stages, and it is not possible to determine the
potential outcome or to reliably estimate any potential liability,
no provision has been recognised.
18.
Contingent
liabilities and provisions (continued)
Under the terms of the agreement
with the Group's clearing broker for its operations in the US, Apex
Clearing Corporation, the Group guarantees the performance of its
customers in meeting contracted obligations. In conjunction with
the clearing broker, the Group seeks to control the risks
associated with its customer activities by requiring customers to
maintain collateral in compliance with various regulatory and
internal guidelines. Compliance with the various guidelines is
monitored daily and, pursuant to such guidelines, the customers may
be required to deposit additional collateral or reduce positions
where necessary.
Other than the matters outlined
above, the Group does not expect there to be other contingent
liabilities that would have material adverse impact on the Group
Consolidated Interim Condensed Financial Statements. The Group had
no material provisions as at 30 November 2024 (31 May 2024: £nil
and 30 November 2023: £nil).
19.
Financial risk
management
Financial risks arising from
financial instruments are analysed into market, credit and
liquidity risks. Details of how these risks are managed are in note
30 of the FY24 Annual Report. There has been no material change in
the Group's financial risk management policies during the
period.
20.
Net credit losses
on financial assets
The Group recognised net credit
losses of £0.7 million during the period (30 November 2023: £10.5
million). The principal sources of credit risk to the Group's
business are from financial institutions and individual
clients.
Amounts due from financial
institutions, which are stated net of an expected credit loss of
£4.8 million (31 May 2024: £1.2 million and 30 November 2023: £1.2
million), are all less than 30 days due. Amounts due from clients,
which are stated net of an expected credit loss of £24.7 million
(31 May 2024: £29.4 million and 30 November 2023: £26.3 million),
include both amounts less than and greater than 30 days past
due.
Below is the reconciliation of the
Group's loss allowance:
|
|
Unaudited
30
November 2024
|
31 May
2024
|
Unaudited
30
November 2023
|
|
|
£m
|
£m
|
£m
|
|
At the beginning of the
period
|
30.6
|
18.1
|
18.1
|
|
Loss allowance for the
period:
|
|
|
|
|
- gross charge for the
period
|
5.9
|
18.2
|
12.7
|
|
- recoveries
|
(5.2)
|
(2.7)
|
(2.2)
|
|
- debts written off
|
(1.9)
|
(2.9)
|
(1.1)
|
|
Foreign exchange
|
0.1
|
(0.1)
|
-
|
|
At the end of the period
|
29.5
|
30.6
|
27.5
|
21.
Financial
instruments
Fair value hierarchy
The financial instruments
valuation hierarchy and the definitions, details of the inputs and
the valuation techniques used in determining the fair values of the
Group's financial instruments are shown in note 29 of the FY24
Annual Report.
There have been no changes to the
valuation techniques for any of the Group's financial instruments
held at fair value as at 30 Nov 2024 (31 May 2024: none). However,
for the period ended 30 November 2023, the Group reclassified £9.3
million trade receivables - due from brokers balances from level 2
to level 1, £13.6 million trade payables - due to brokers balances
from level 2 to level 1, £63.0 million trade payables - client
funds balances from level 2 to level 1 and £4.3 million trade
payables - issued turbo warrants balances from level 2 to level
3.
The hierarchy of the Group's
financial instruments carried at fair value is as
follows:
|
|
Level
1
|
Level
2
|
Level
3
|
Total
fair value
|
|
At
30 November 2024 (unaudited)
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
378.2
|
-
|
-
|
378.2
|
|
Trade receivables - amounts due
from brokers
|
(10.4)
|
10.0
|
-
|
(0.4)
|
|
Financial investments
|
469.2
|
-
|
-
|
469.2
|
|
Other investments
|
-
|
-
|
0.6
|
0.6
|
|
Financial liabilities:
|
|
|
|
|
|
Trade payables - amounts due to
brokers
|
(3.9)
|
(1.4)
|
-
|
(5.3)
|
|
Trade payables - client
funds
|
56.3
|
9.0
|
0.2
|
65.5
|
|
Trade payables - issued turbo
warrants
|
-
|
-
|
(4.5)
|
(4.5)
|
|
21. Financial instruments
(continued)
|
Level
1
|
Level
2
|
Level
3
|
Total
fair value
|
|
|
At
31 May 2024
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
360.6
|
-
|
-
|
360.6
|
|
|
Trade receivables - amounts due
from brokers
|
(33.6)
|
2.8
|
-
|
(30.8)
|
|
|
Financial investments
|
460.7
|
-
|
-
|
460.7
|
|
|
Other investments
|
-
|
-
|
1.8
|
1.8
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
Trade payables - amounts due to
brokers
|
(8.6)
|
(1.8)
|
-
|
(10.4)
|
|
|
Trade payables - client
funds
|
40.0
|
12.6
|
0.4
|
53.0
|
|
|
Trade payables - issued turbo
warrants
|
-
|
-
|
(4.5)
|
(4.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level
1
|
Level
2
|
Level
3
|
Total
fair value
|
|
At
30 November 2023 (unaudited)
|
£m
|
£m
|
£m
|
£m
|
|
Financial assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
114.7
|
-
|
-
|
114.7
|
|
Trade receivables - amounts due
from brokers
|
(32.8)
|
7.4
|
-
|
(25.4)
|
|
Financial investments
|
615.5
|
-
|
-
|
615.5
|
|
Other investments
|
-
|
-
|
1.2
|
1.2
|
|
Financial liabilities:
|
|
|
|
|
|
Trade payables - amounts due to
brokers
|
(13.6)
|
(4.3)
|
-
|
(17.9)
|
|
Trade payables - client
funds
|
80.4
|
16.6
|
-
|
97.0
|
|
Trade payables - issued turbo
warrants
|
-
|
-
|
(4.3)
|
(4.3)
|
Fair value of financial assets and liabilities measured at
amortised cost
The fair value of the Group's
financial assets and liabilities measured at amortised cost
approximates their carrying amount, with the exception of debt
securities in issue.
The carrying value of the Group's
debt securities in issue as at 30 November 2024 was £298.3 million
(31 May 2024: £298.1 million, 30 November 2023: £297.9 million) and
the fair value of the debt securities was £267.8 million (31 May
2024: £259.7 million, 30 November 2023: £250.2
million).
22. Subsequent
events
During the period from 1 December
2024 to 20 January 2025, the Group repurchased 1,091,411 Ordinary
Shares with a nominal value of 0.005p for an aggregate purchase
amount of £10.8 million (including related costs of £0.1
million).
On 22 January 2025, the Board
approved the extension of share buyback programme of £150.0 million
announced on 24 July 2024, by a further £50.0 million. This is
expected to complete in H2 FY25.
On 16 January 2025, the Group
announced the acquisition of Freetrade Limited, a UK-based
commission-free, self-directed investment platform for an
enterprise value of £160.0 million. The acquisition will be funded
in cash from existing capital resources. The acquisition is subject
to a number of conditions including regulatory approvals and
expected to complete in mid-2025. The enterprise value of £160.0
million excludes up to approximately £14 million of acquired cash,
net debt items and other liquidity requirements resulting from the
transaction.
There have been no other
subsequent events that have a material impact on the Consolidated
Interim Condensed Financial Statements.
Statement of Directors' Responsibilities
