IG Group (LON: IGG) recently published its FY25 financials, showing strong performance for the year. Revenue and profit both exceeded market expectations, lifting its London-listed shares significantly.
While headline numbers were already known, the broker’s full-year report included several detailed updates worth noting.
Read more: IG Group Beats Estimates in FY25, Net Profit Jumps 24% to £380 Million
Exiting Low Growth Investments
IG revealed that it exited “several legacy and sandbox initiatives” in 2024, including Spectrum, Brightpool, Raydius, BadTrader, and Small Exchange.
These exits were attributed to the platforms having limited impact and low growth potential.
As a result, IG recorded a £3.2 million impairment of intangible assets linked to Spectrum and a £4.1 million impairment for Small Exchange assets.
FinanceMagnates.com previously reported that IG had shut down its local operations in South Africa. The company has now officially confirmed it is closing its commercial business in the country to “prioritise investment in larger and fast-growing markets.”
7% Drop in Customer Service Cost
IG stated that its organic fixed cost to serve per customer fell by 7 per cent in the past fiscal year, following efficiency-focused efforts.
The broker also introduced measures to improve customer income retention in its OTC business by capturing more spread income and reducing hedging costs.
“We expect these initiatives to deliver stronger customer income retention over the medium to long term and increase short-term variability,” said IG’s CEO, Breon Corcoran.
The broker is already seeing results: customer income retention rose by four percentage points to over 79 per cent. That added about 5 per cent, or £40 million, to OTC net trading revenue.
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Marketing Costs Increase 12%
Marketing remains a significant cost for retail brokers, and IG is no exception.
The London-based firm spent £93.5 million on advertising and marketing last fiscal year, a 12 per cent year-on-year rise.
The company explained that the increased spending reflects “a targeted increase in marketing to capture demand across divisions.”
To support this, it highlighted that first trades from new customers grew by 19 per cent organically.
A New Share Buyback Programme
IG plans to launch another £125 million share buyback programme in the first half of the current fiscal year.
The broker’s board has already approved the initiative, which will depend on share price performance and other capital requirements.
IG shares rose more than 7 per cent after the announcement of its record results yesterday (Thursday) and the positive outlook.
Last year, IG started a £150 million buyback, adding a further £50 million earlier this year. That programme concluded before the end of FY25.
Since FY22, the company has returned £1.2 billion to shareholders through dividends and buybacks, reducing its share count by over 19 per cent.
The Freetrade Boost
IG ended the year with total revenue of over £1.07 billion. Freetrade contributed £4.8 million to this figure within just two months of completing its acquisition.
Freetrade’s full-year revenue for FY25 rose by 22 per cent to £29.1 million.
Related: IG Acquires Freetrade for £160 Million
IG also added 457,300 active Freetrade users to its platform, pushing the total number of active customers up by 137 per cent to 820,000. Excluding Freetrade, IG’s active customer base grew organically by 5 per cent to 362,000.
“With most of Freetrade’s customers in their 20s and 30s, the acquisition broadens our addressable market and gives us more scope for new products and market entry,” Corcoran said.
“As we look ahead, our main focus is on completing Freetrade’s product roadmap and scaling the business in the UK.”
This article was written by Arnab Shome at www.financemagnates.com.
