IG profits jump by a quarter

20th Jul 2010 07:23

Profits jumped by a quarter last year at spread bet firm IG Group as its bad debt charge tumbled and equity markets settled down after the volatility of 2009."Market conditions were more mixed during the year. The start of the year saw rising equity markets which gradually settled to a period of range bound market movements. Toward the end of the financial year, we benefited from an increase in volatility in both forex and equity markets," IG said.Underlying profits rose by 25% to £157.6m in the year to May, up from £125.9m, on revenues 16% higher at £299m. Pre-tax profits rose by 26% to £140.3m. Best performance came from Australia, with revenue increasing by over 63% from £27.9m to £45.7m driven by its CFD business. In Europe, revenue also grew rapidly, up 57% from £30.2m to £47.4m with Germany showing the highest growth rate.In the UK, growth picked up after October and in the second half of the year, revenues rose by 18% year-on-year. There was also a big swing in the bad debt position from a £18.2m write-off in the previous year to a net recovery of £1.1m this time."The new financial year has started well, with the elevated volatility levels of May continuing into early June and helping to stimulate client activity. It remains difficult, however, to predict future trends in volatility or client reaction to changing market and economic conditions," chief executive Tim Howkins said.The dividend for the year rises by 23% to 18.5p.