IG Group Subsidiaries Report Mixed FY23 Results

In fiscal year 2023 (FY23), three British subsidiary companies of the financial conglomerate IG Group, namely IG Markets Limited, IG Index Limited, and IG Trading and Investments Limited, reported their FY23 results with mixed outcomes.IG Markets Limited, which provides over-the-counter (OTC) trading services, reported a decrease in profitability.

Its trading revenue in FY23 was £405.2 million, down from £453.6 million the previous year. The company cited inflationary pressures, higher interest rates, increased market volatility, and a decline in global equity prices as factors contributing to a decline in net profit to £171.3 million from £188.2 million.

IG Group Subsidiaries FY23 Results

IG Index Limited, which offers OTC derivatives and financial spread bets to UK customers, also experienced a decline in profitability. Its net trading revenue in FY23 was £236.5 million, compared to £262.5 million the previous year. After-tax net profit decreased by approximately £15 million to £102.5 million. Similar to IG Markets, IG Index attributed the decline to macroeconomic factors, including inflation, interest rates, market volatility, and global equity price fluctuations.

In contrast, IG Trading and Investments Limited, a newly established subsidiary responsible for non-OTC trading, reported significant growth in profitability. In FY23, the company achieved a net profit of £9.17 million, marking a substantial improvement from a loss of nearly £800,000 the previous year. Total equity increased from £3.5 million to £20.7 million, indicating a strong performance. The reports indicate that IG Group Holdings Plc, the parent company, has not yet published its financial results for FY23. However, based on the H1 report from the previous fiscal year, the company recorded a 10% increase in revenue and a pre-tax net profit of £240.5 million.

In a related development, IG Group announced plans to reduce its workforce by approximately 300 employees, which amounts to 10% of its total staff by the end of 2023. This strategic decision is part of the firm’s efforts to achieve annual cost savings of £50 million. The company foresees structural savings of £10 million in FY24, with this figure escalating to £40 million in 2025 and ultimately reaching £50 million by 2026. Additionally, the trading firm expects to save an extra £10 million in FY24 through reduced variable expenses. These cost-cutting measures align with the milder market conditions reported in Q1, which have persisted into Q2, resulting in an aggregate annual savings of £20 million.

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