UPDATE 2-Gambles pay off as sales rise at spread better IG

* Q1 revenue up 16 percent to 79 million pounds

* Volumes were subdued late on in quarter

* Says well positioned for further growth

* Shares fall 0.7 pct

(Adds analyst comments, updates share price)

By Sudip Kar-Gupta

LONDON, Sept 9 (Reuters) - IG Group (IGG.L), Britain's biggest spread-betting company, posted a 16 percent rise in first-quarter revenue and said it was well placed for further growth thanks to rising customer numbers and new products.

Turnover for the three months to end-August rose 16 percent to 79 million pounds ($122 million), driven by higher revenues in Singapore, Europe, Australia and at the company's main UK division.

IG said on Thursday that while volumes were strong in the first half of the quarter, they became more subdued towards the end of the period due to the summer holiday season and low volatility.

"It remains difficult to predict future trends in volatility or customer reaction to changing market and economic conditions," IG Group said in a statement.

"Growth in the number of active customers and the continued development of the group's offering leave the group well positioned for further growth," it added.

IG Index competes with rivals such as City Index, Cantor Index and Spreadex in the British spread betting market, and all those companies have benefited from recent market volatility which has helped boost trading volumes.

IG shares at one stage rose as much as 0.9 percent to 504.50 pence but then slipped back and were down 0.7 percent at 497 pence by 0800 GMT, giving the company a market capitalisation of around 1.8 billion pounds.

Stockbroker KBC Peel Hunt kept a "hold" rating on IG shares while Execution Noble maintained a "buy" rating on the stock.

"IG's business thrives on volatility and therefore current conditions could not be better for it," KBC wrote in a research note. ($1=.6463 Pound) (Editing by Paul Hoskins and Hans Peters)