IG Group - Interims

[idpickering]

Financial Summary

· Net trading revenue £251.0 million (H1 FY18: £268.4 million) - down 6%

· Operating expenses excluding variable remuneration £122.1 million (H1 FY18: £117.6 million) - up 4%

· Operating profit £112.5 million (H1 FY18: £136.5 million) - down 18%

· Own funds generated from operations £100.1 million - 89% of operating profit

· Basic EPS 24.9 pence (H1 FY18: 29.5 pence) - down 16%



Dividend

An interim dividend of 12.96 pence per share, calculated as 30% of the full year dividend of 43.2 pence per share for FY18, will be paid on 28 February 2019 to those members on the register at the close of business on 1 February 2019.

https://www.investegate.co.uk/ig-group- ... 00056984N/

[OLTB]

I won't mention the sp reaction, but will say that the interim dividend will at least pay for my annual tv licence when I eventually start to draw on the income in ahem years time, so that's one thing off the worry list

Cheers, OLTB.

[idpickering]

I won't mention the sp reaction, but will say that the interim dividend will at least pay for my annual tv licence when I eventually start to draw on the income in ahem years time, so that's one thing off the worry list

Cheers, OLTB.

Morning OLTB, I must admit to having had a look at these as a potential newbie holding in the past, but never pulled the trigger. They're down over 6% as I type, and I'm still not firing that weapon.

Ian.

[doug2500]

Seems to me that the update only confirms what was previously predicted.

I suppose the market is an optimist that hopes things will be better until they're confirmed?

[monabri]

Senior management share dealings in the last 12 months .

Announced Type Name Entity Role Start End Shares Max Price (£) Value (£)
01. Nov 18 Buy Andrew Green Individual 30. Oct 18 30. Oct 18 8,174 £6.09 £49,746
01. Nov 18 Buy June Felix Individual 30. Oct 18 30. Oct 18 17,000 £6.08 £103,430

Felix - recent CEO , in post 1 year
Green - non exec Chair, in post 4+ years.

No debt.

Growth over the next 3 years..."predictions" are slightly negative ( source Simply Wall Street).

Good business hampered by political interference/ regulation (nanny state knows best).

I don't hold.

[OLTB]

They're down over 6% as I type, and I'm still not firing that weapon.

Ian.

Morning Ian

I think that there is a bit of a downer on the sector as it's unknown how far similar European regulation will push into other global markets. IGG have been good for me - still up capital wise after today's drop and they have no debt, with an anticipation of growth in 2020 but a held dividend until then, with the aim of increasing dividend once growth returns. As doug2500 states above, the update only reiterated what they thought would be the effect of regulation on their business, so there weren't any surprises.

Current yield (from dividend data) is 7.25% compared to (I think) your preferred top-up this month of IMB which is 7.55% so very similar.

Cheers, OLTB.

[pyad]

One small point worth mentioning in the report is the reiteration of their previous comment that the div will be held at the 2018 43.2p until earnings allow the company to resume progressive dividends. So at 601p that makes a forward yield of a high 7.2%.

Also, they say they are confident that the company will, as previously guided, return to growth after FY19. Well, that's a proof of the pudding job in my view, to be believed when it materialises.

I'll continue to hold IGG in my HYP, having bought my first tranche some ten years or so ago when it was going through a bad patch. It has done the HYP business for me so far.

[idpickering]

Current yield (from dividend data) is 7.25% compared to (I think) your preferred top-up this month of IMB which is 7.55% so very similar.

Cheers, OLTB.

Hi OLTB, that is correct. In fact that top up happened about 1000hrs this morning. Back on topic though, at 32 holdings, and adequately diversified, I won’t be buying into IG Group.

Ian.

[OLTB]

Trading update link here viewtopic.php?f=94&t=16860&p=223587#p223587

Share price up 9.9% as I type.

Cheers, OLTB.

[blobby]

My take from this is:

Dividend

The Board reiterates that the Company expects to maintain the 43.2p per share annual dividend until the Group's earnings allow the Company to resume progressive dividends.

And:

The projected 17% year on year reduction in net trading revenue due to a lack of volatility in the markets.

Overall I'm still happy and think this is still a great bargain. Thanks to Stephen for picking this recently and putting it on my radar.

[kempiejon]

I had been interested in IG, earmarked for some more research, I don't have a gambler in my HYP. For now static dividend and no real need to have every sector and I think I'll not bother with the extra leg work now. 12 years of double digit dividend growth is a great history and they have had a few years of held dividends in the past but I have hopefully as good shares to top up for now.

[PinkDalek]

... No debt. ...

I only took a quick look at https://www.investegate.co.uk/ig-group- ... 00056984N/ but see, for example, The Group has fully drawn down the £100 million term loan included in the new Facilities Agreement.

[doug2500]

... No debt. ...

I only took a quick look at https://www.investegate.co.uk/ig-group- ... 00056984N/ but see, for example, The Group has fully drawn down the £100 million term loan included in the new Facilities Agreement.

My understanding is that it is part of the required capital buffer to ensure liquidity as explained here (same announcement):

The Group requires liquidity to fund its day-to-day operations, primarily to fund the margin that its hedging brokers require to support the Group's hedging positions, the regulatory and working capital of its subsidiaries, and to fund adequate buffers in client money accounts.



The average broker margin requirement in H1 FY19 was £371 million, with the peak broker margin requirement of £456 million in July 2018. The level of broker margin is driven by the notional value of the Group's open hedging positions which vary with client trading activity and the extent to which client trades can be internalised. At 30 November 2018, the broker margin requirement was £314.5 million (31 May 2018: £386.8 million).

So it's just sitting there as cash (not necessarily in IG's account), hopefully never to be used but with the chance that it might be?

Happy to be corrected by more knowledgeable fools than myself. Especially as I've topped up.

[PinkDalek]

Happy to be corrected by more knowledgeable fools than myself. Especially as I've topped up.

I only queried the No debt in passing and am more of a Doris than anyone knowledgeable.

The announcement also included:

On 21 June 2018 the Group entered into a new Facilities Agreement which provides a £200 million credit facility comprising a £100 million sterling term loan, which is fully drawn, and a £100 million committed revolving credit facility (RCF). The cost of these facilities totalled £1.6 million in the period. Bank facility costs in H1 FY18 of £0.6 million reflected the fees and interest relating to the £160 million RCF which was available to the Group until the new Facilities Agreement was entered into.

The Summary Group balance sheet includes the £100 million Long term bank borrowings as Capital employed.

Come what may, it is still debt, no?

[doug2500]

Come what may, it is still debt, no?

My take would be: debt, yes but net debt, no. So maybe we're both right? Certainly shows the value of using exactly correct terminology though.