IG Group @ 433.7p, +22.3p (+5.42%)
So IG Group came back to the market today with its preliminary results which weren't quite enough to recover yesterdays falls but after predicting that profits would rise by 3% the company reported a slightly higher 3.4%.
Always nice when a company does what it says it will do.
The company has had a bit of a torrid year following its decision to reduce its Japanese operations, being hit by an FSCS levy of £4m (as the FSCS seeks to cover its behind after the Keydata bond debacle), and the selling of its sports betting business to focus on its financial side.
Some of the headline highlights in today's results read:
With the exception of Japan, mature markets have experienced single digit growth but younger markets have seen strong double digit growth.
Cash is down slightly but still very healthy at £124.5m (£128m).
In 5 years the dividend has increased from 8.5p to 20p.
There are still concerns hanging over the company and where future growth will come from. Collins Stewart is one who thinks that the company will start to reduce its forecasts for the next couple of years due to costs (www.sharecast.com: Tuesday Preview: IG Group, Land Securities). It is pleasing then to see that the company is not sitting idly as it invests in its systems and looks to bring some services in house to reduce costs. Better still that the company continues to grow its client base in difficult markets.
Has the company effectively gone ex growth? Its difficult to say in such extreme times but its lower rating suggests that many brokers now believe this to be the case. Comforting then that the company has continued to deliver a healthy dividend as it has done throughout the last 5 years.
For myself, I am not quite ready to give up on IG as a market leader with growth potential (in a more benign environment) and, for the moment, am happy to accept the healthy dividend and the company's lowered rating (at a forecast Price/Earning of 12.2), until the global economy recovers.
The Chief Executive - Tim Howkins, has also alluded to this opinion in his statement:
"Revenue(1) growth this year was 7%, which is much lower than I believe the Group is capable of in a more normal economic and market environment.".
All told, the shares (bought for recovery and growth) have given me a capital gain of 44.15% in 18 months.
In addition, I have received dividends amounting to a further 12.67% to give me a total capital plus income gain of 56.82%.
The shares are due to trade ex-dividend on the 7 September after which, the final dividend of 14.75p will be payable on the 11 October.
Related articles:
- www.sharecast.com: Tuesday Preview: IG Group, Land Securities
- www.sharecast.com: IG Group posts higher profit
- www.iggroup.com/corporate/annual-reports-results.html
Related posts:
- IG Group: FSCS sticks the boot in!
- IG: Interim Management Statement.
- Has the sun set on IG Index?
So IG Group came back to the market today with its preliminary results which weren't quite enough to recover yesterdays falls but after predicting that profits would rise by 3% the company reported a slightly higher 3.4%.
Always nice when a company does what it says it will do.
The company has had a bit of a torrid year following its decision to reduce its Japanese operations, being hit by an FSCS levy of £4m (as the FSCS seeks to cover its behind after the Keydata bond debacle), and the selling of its sports betting business to focus on its financial side.
Some of the headline highlights in today's results read:
· "Net trading revenue up 7.3% to £320.4 million (2010: £298.6 million)
· Adjusted profit before tax up 3.4% to £163.0 million (2010: £157.6 million)
· Adjusted diluted earnings per share of 32.64p up 6.1% (2010: 30.77p)
· Final dividend per share of 14.75. Total dividend per share for FY11 of 20.00p, up 8.1% (2010: 18.50p)
· Number of active financial clients, excluding Japan, increased 13% to 117,252
· Dividend per share represents 61.3% of adjusted diluted earnings per share (2010: 60.1%)
· Strong, debt free balance sheet with a 294.2% excess over regulatory capital resources requirement surplus (2010: 338.1%)
· Encouraging start to the new financial year, with revenue from the financial business higher than in June 2010, despite substantially lower levels of market volatility"
With the exception of Japan, mature markets have experienced single digit growth but younger markets have seen strong double digit growth.
Cash is down slightly but still very healthy at £124.5m (£128m).
In 5 years the dividend has increased from 8.5p to 20p.
There are still concerns hanging over the company and where future growth will come from. Collins Stewart is one who thinks that the company will start to reduce its forecasts for the next couple of years due to costs (www.sharecast.com: Tuesday Preview: IG Group, Land Securities). It is pleasing then to see that the company is not sitting idly as it invests in its systems and looks to bring some services in house to reduce costs. Better still that the company continues to grow its client base in difficult markets.
Has the company effectively gone ex growth? Its difficult to say in such extreme times but its lower rating suggests that many brokers now believe this to be the case. Comforting then that the company has continued to deliver a healthy dividend as it has done throughout the last 5 years.
For myself, I am not quite ready to give up on IG as a market leader with growth potential (in a more benign environment) and, for the moment, am happy to accept the healthy dividend and the company's lowered rating (at a forecast Price/Earning of 12.2), until the global economy recovers.
The Chief Executive - Tim Howkins, has also alluded to this opinion in his statement:
"Revenue(1) growth this year was 7%, which is much lower than I believe the Group is capable of in a more normal economic and market environment.".
All told, the shares (bought for recovery and growth) have given me a capital gain of 44.15% in 18 months.
In addition, I have received dividends amounting to a further 12.67% to give me a total capital plus income gain of 56.82%.
The shares are due to trade ex-dividend on the 7 September after which, the final dividend of 14.75p will be payable on the 11 October.
Related articles:
- www.sharecast.com: Tuesday Preview: IG Group, Land Securities
- www.sharecast.com: IG Group posts higher profit
- www.iggroup.com/corporate/annual-reports-results.html
Related posts:
- IG Group: FSCS sticks the boot in!
- IG: Interim Management Statement.
- Has the sun set on IG Index?
Post Title
→Shares update: IG Group Holdings Preliminary Results.
Post URL
→https://national-grid-news.blogspot.com/2011/07/shares-update-ig-group-holdings.html
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