Storm Clouds Gather Over IG Group

IG Group (ISE: IGG.L) warned that revenue in the first six weeks of the current financial period has been lower than the same period last year. The company said dull markets in this period have presented clients with fewer trading opportunities.

Consequently, shares in IG Group slipped 0.7% to 459 pence, even though the spread-betting company hiked its full-year dividend by a better-than-forecast 12.5% to 22.5 pence. The world's largest spread-betting company by turnover said full-year profits gained 14% to 186 million pounds, which was in line with market expectations. Trading revenue rose 17% to 367 million pounds.

Chief executive Tim Howkins said: "For the year as a whole we increased revenue by 17%. Undoubtedly this success sets us some tough comparatives for the year ahead, but we will continue to invest appropriately in the capabilities of our business, in technology, marketing and geographic and product development, to position the company for long term growth."

Strong growth was reported in four out of five of the company's geographic regions. Revenues in the U.K. grew 15%, and in Australia trading revenues were up 22%. Sales in Europe rose 26%, and revenues in the rest of the world grew by 43%, with around 80% of the total coming from Singapore.

Revenues in Japan fell 20%, but IG Group said there are signs that business in the company has stabilized following leverage restrictions at the end of the first quarter. That affected the ability of clients to trade at the same level as previously.

IG Group is a favorite among income investors, having increased its payout at an annual rate of 30% since 2007. But if you are on the lookout for more income shares for your portfolio, you can download our free report "8 Income Plays Held By Britain's Super-Investor."

Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors Of 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities

The article Storm Clouds Gather Over IG Group originally appeared on

David does not own any shares mentioned in the article.The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.