Ig Group Holdings Plc · LSE:IGG
Ig — H1 2008 Earnings Presentation
17 slides from Ig's earnings presentation, January 2008
Slide 1: Interim results presentation: Tim Howkins, Steve Clutton
Tim Howkins, CEO Steve Clutton, Finance Director
Slide 2: Highlights
Highlights Revenue Turnover up 54% Profit before tax up 63% Proposed interim dividend of 3.0p per share (up 50%) Strong levels of client recruitment Paris and Madrid operations successfully opened Acquisition of US exchange in December 2007 Current trading strong 1998 1999 2000 2001 2002 2003 2004 2
Slide 3: Strong revenue and profit growth continues
Six months ended Year ended 30 November 31 May 2007 2006 2007 Strong revenue and profit £'m £'m £'m growth continues Turnover 85.8 55.7 +54% 122.0 Betting duty (4.9) (2.9) (4.2) 80.9 52.8 117.8 Betting duty varies with client performance Interest on client money 5.1 3.1 6.5 Operating costs (37.6) (2
Slide 4: Revenue by product: Financial and Sports
! 2006 2007 2008 H1 H2 Total H1 H2 Total H1 Growth £'000 £'000 £'000 £'000 £'000 £'000 £'000 Financial Spread Betting 21,798 29,377 51,175 30,577 31,640 62,217 43,386 +42% CFD 9,721 14,233 23,954 16,018 25,014 41,032 31,286 +95% Binaries 2,701 2,495 5,196 3,098 3,444 6,542 4,775 +54% Financial sub-t
Slide 5: Operating costs: additional headcount to cater for growth
" Year ended 31 May 2007 Year ending 31 May 2008 Additional headcount to cater for growth FY H1 H2 H1 £'000 £'000 £'000 £'000 Increased bonus reflects H1 Salaries 20,227 9,940 10,287 12,384 performance Bonuses 9,747 3,709 6,038 8,051 LTIP and SIP 1,844 911 933 2,210 New offices in Madrid and Paris A
Slide 6: Account opening is key lead indicator
# ! Account opening is key lead indicator Quarterly account opening Overall client recruitment up 82% H1 vs H1 10,000 PureDeal UK TradeSense UK 9,500 launch late July launch late Jan 07 9,000 CFD 8,500 Strong brand and recognition of IG 8,000 UK financial spread as UK leader 7,500 betting 7,000 6,50
Slide 7: Australia: return to strong growth
$ !%# ! Return to strong growth Number of clients dealing - Australia (monthly) Income and number of transactions¹ (quarterly) 4,800 4,600 700,000 8 4,400 Number of transactions 4,200 4,000 600,000 Income (£m) 7 (£m) 3,800 3,600 6 3,400 500,000 3,200 3,000 5 2,800 2,600 400,000 2,400 4 2,200 2,000 3
Slide 8: Revenues growing strongly in current regions of focus
! & Revenues growing strongly in current regions of focus H1 2008: Revenue £85.8m Financial revenue by region 90 Sports (£m) Rest of World £79.4m 7% 80 Asia Pacific Binaries Europe 70 UK 6% £60.1m 60 £49.7m 50 £46.1m Fin SB 51% 40 £34.2m CFDs 30 36% 20 10 0 H1 06 H2 06 H1 07 H2 07 H1 08 Reducing rel
Slide 9: Global CFD growth
' ! %# !( Turnover H1 2006 H2 2006 H1 2007 H2 2007 H1 2008 Global CFD growth £'m £'m £'m £'m £'m UK 3.5 4.8 5.8 10.1 9.6 – Number of clients more than doubled in Europe 2.0 3.2 4.6 7.2 8.9 Asia Pac 3.7 5.5 5.4 7.3 12.1 a year Rest of World 0.5 0.7 0.3 0.4 0.7 CFD Total 9.7 14.2 16.0 25.0 31.3 – UK &
Slide 10: Daily revenue volatility remains low
) * + ! & * Daily revenue volatility remains low 800,000 3.00 (£ ) Volatility of daily revenue remains within a tight Daily revenue (60 day rolling average) range, despite general market volatility 700,000 revenue volatility (60 day coefficient of variability) 2.50 600,000 Group’s maximum exposure t
Slide 11: Long periods of market volatility; business has grown through market cycle
, ) !! The past 40 years have seen long periods of volatility similar to recent levels 14 0 Days Number of days where daily range exceeded 1.5% DOW F T SE 12 0 10 0 80 60 40 20 0 8 0 3 5 8 0 3 5 8 0 3 5 8 0 3 5 8 Y6 Y7 Y7 Y7 Y7 Y8 Y8 Y8 Y8 Y9 Y9 Y9 Y9 Y0 Y0 Y0 Y0 F F F F F F F F F F F F F F F F F 1
Slide 12: TradeSense and PureDeal improved UK client recruitment
- ! ! ! ! TradeSense and PureDeal have both notably improved UK client recruitment Both TradeSense and PureDeal make good marketing messages, enhancing client recruitment PureDeal is an important competitive differentiator Roll-out across existing regulated sites largely complete Each PureDeal launc
Slide 13: Initiatives to continue to drive growth across all businesses
" * . & & * Initiatives to continue to drive growth across all our businesses Enhancements to PureDeal continue – Reuters Fundamentals – iPhone compatible dealer CRM – managing the client relationship throughout their lifecycle Enhanced UK seminar programme – Physical seminars – Webinars Increasing
Slide 14: New overseas offices: big opportunity, modest costs
/ 0 ' Big opportunity; manageable, modest costs Number of clients dealing (monthly) Newer offices outperforming early experience in Australia 600 Minimal set up costs, modest headcount requirement 500 Singapore, Italy and Germany accounted for 400 – 4% of Nov Revenue Australia No. of clients 300 Sin
Slide 15: A two track approach to a major potential market
12 0 ' A two track approach to a major potential market IG Markets Inc HedgeStreet Inc Largest retail forex market in the world The world’s only disintermediated binary option exchange Tightening of regulatory regime for OTC forex provides opportunity Intending to restart trading in January 08 – Exi
Slide 16: Record client recruitment underpins confidence in growth prospects
/ !) Record levels of client recruitment underpins confidence in growth prospects Strong growth in UK and Australia continues Continued strength in IT capability and technology secures competitive advantage through innovation, quality of platform and user experience Key European operations establish
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