(Adds details, analysts' comments)
March 23 British online trading company IG Group
Holdings Plc reported a 3.8 percent fall in quarterly
revenue as it earned less per client, especially in the United
Kingdom and Ireland - its largest market.
Shares of the company fell as much as 6.8 percent in morning
trading on the London Stock Exchange.
The company, which provides online stockbroking and trading
services to retail investors, said revenue fell to 117.4 million
pounds ($146.8 million) for the third quarter ended Feb. 28,
from 122 million pounds a year earlier.
Average revenue per client fell 15 percent with the United
Kingdom and Ireland down 23 percent due to reduced trading by
existing clients and lower margins in the North America
Derivatives Exchange (Nadex) and stockbroking businesses.
However, the number of IG's active clients grew 13 percent
in the quarter.
The company, which was founded in 1974 as the world's first
spread-betting firm, said the fourth quarter saw a better start
and that client recruitment remained strong.
IG said regulatory uncertainty has had no impact on its
business so far, even as Britain's financial watchdog seeks to
shield individuals in the fast-growing spread-betting market.
The UK's Financial Conduct Authority (FCA) joined other
European regulators in December to regulate the
3.5-billion-pound industry, where it said most retail investors
lose money. FCA is set to announce new regulations in the
RBC Capital Markets analyst said "the worst is yet to come"
as new regulations are expected to negatively impact the
The spread-betting market is regulated by EU rules, which
have no caps on leverage. That means investors can take out bets
that are far larger than their initial outlay, offering greater
potential returns but also running the risk of huge losses.
IG shares were down 4.6 percent at 500.29 pence at 0950 GMT.
Up to Wednesday's close, stock had fallen nearly 35 pct in the
last 12 months.
($1 = 0.7995 pounds)
(Reporting by Arathy S Nair in Bengaluru; Editing by Sunil Nair
and Amrutha Gayathri)