UPDATE 2-IG Group says trading remains strong, shares rise
(Adds analyst comment, share price)
By Mike Elliott
LONDON, June 4 (Reuters) - British spread-betting firm IG Group Holdings Plc (IGG.L) said current trading remains strong and it was confident of its prospects as it enters its new financial year, boosting its shares by 1.6 percent.
IG said in a trading update on Wednesday that it expects to report an increase in revenue of over 50 percent to around 184 million pounds ($361.8 million) for the year to May 31, from 122 million the year before.
IG, which allows investors to speculate on currencies, interest rates, shares and indexes, said its business had benefited from high levels of market volatility.
"While it remains difficult to predict future trends in volatility or customer reaction to any change in market conditions, IG is well positioned for further growth," the company said in a statement.
IG, which said it had continued to see strong growth across all its financial businesses throughout the year, is scheduled to announce full-year results on July 21.
Shares in IG climbed 1.6 percent to 396.25 pence in early trading, valuing the company at around 1.3 billion pounds.
"True to form, IG's full-year trading update is very encouraging on all fronts," Landsbanki analyst Katrina Preston said in a note.
"We therefore expect to upgrade our EPS estimate to 20.1p from 19.6p and remain very comfortable to be ahead of consensus for the year to May 2009, forecasting EPS to grow by 24 percent to 25.1p in that period," Preston added.
The company said it expects to report an EBITDA (earnings before interest, tax, depreciation and amortisation) margin of around 53 percent, down from 57.7 percent the year before -- partly due to the costs involved in launching new businesses.
"As previously flagged, this year will see the impact of some revenue lag in IG's new markets ... but we are confident that the drag on margins will prove temporary," Landsbanki's Preston added. (Reporting by Mike Elliott; Editing by Rory Channing)
