Tim Howkins, CEO. Steve Clutton, Finance Director

Transcription

1 Tim Howkins, CEO Steve Clutton, Finance Director

2 Highlights Revenue Revenue up 36% Earnings per share up 33% All parts of business contributed to growth Benefits of increased IT spend Proposed final dividend of 6.5p per share (total dividend of 8.5p, up 55%) Current trading strong Initiatives in place to drive further growth - 2 -

3 Year ended 31 May Revenue 26 'm 'm % Strong revenue and profit growth continues Betting duty (1.6) (4.2) Interest on client balances % +3% Betting duty varies with client performance Operating costs (4.2) (53.9) +34% EBITDA Margin (%) % % +34% Period of major investment Depreciation and amortisation (3.5) (4.6) +3% EBIT Interest received % Margin improvement in H2 Profit before tax % Diluted earnings per share 1.88p 14.52p +33% Dividend per share 5.5p 8.5p +55% - 3 -

4 !"#"$ $$% Year ended 26 Year ended 27 H1 H2 Total H1 H2 Total Growth Financial Spread Betting 21,798 29,377 51,175 3,577 31,64 62, % CFD 9,721 14,233 23,954 16,18 25,14 41,32 +71% Binaries 2,71 2,495 5,196 3,98 3,444 6, % Sports Fixed odds ,433 1,31 2,168 3, % Spread betting 3,847 3,786 7,633 4,67 4,51 8, % 38,598 5,793 89,391 55,673 66, ,99 +36% All areas of business continue to deliver profitable growth Impressive growth in CFD with increased geographic reach Spread betting performed well against challenging H2 comparative Highest growth rate in Sports for several years - 4 -

5 $" $ Year ended Year ended 31 May May 27 FY H1 H2 FY H2 margin improvement Salaries Bonuses LTIP and SIP 15,326 8,695 1,696 9,94 3, ,287 6, ,227 9,747 1,844 Increased bonus reflects H2 performance Advertising and marketing Rent rates and service 3,321 1,65 3,328 1,81 3,668 1,135 6,996 2,216 Geographic expansion drives marketing spend Market data Bad and doubtful debts 1,889 1,41 1, , ,716 1,416 No significant bad debts IT maintenance and support Recruitment Legal & Professional 1, , , ,795 Other overheads include - irrecoverable VAT - bank charges Other overheads 3,294 2,255 2,217 4,472 Total operating costs 4,214 25,499 28,485 53,984 Depreciation and amortisation 3,523 2,14 2,486 4,59 43,737 27,63 3,971 58,

6 &'() %* +, Strong growth continues Number of client transactions¹ 5, 4, CAGR: 44% 3, 2, 1, Average monthly transactions 36% higher than FY 6 Strong account opening continues Strong brand and recognition of IG as UK leader Jun-4 Jul-4 Aug-4 Sep-4 Oct-4 Nov-4 Dec-4 Jan-5 Feb-5 Mar-5 Apr-5 May-5 Jun-5 Jul-5 Aug-5 Sep-5 Oct-5 Nov-5 Dec-5 Jan-6 Feb-6 Mar-6 Apr-6 May-6 Jun-6 Jul-6 Aug-6 Sep-6 Oct-6 Nov-6 Dec-6 Jan-7 Feb-7 Mar-7 Apr-7 May-7 Jun-7 1 Includes closes, stops and rolls

7 ) % Account opening is key lead indicator Quarterly account opening 8, Overall client recruitment up 43% YoY 7,5 7, 6,5 6, 5,5 CFD UK financial spread betting Global CFD client recruitment up 14% YoY - represents 5% of new accounts - 65% outside UK 5, 4,5 4, Singapore, Germany and Italy accounted for 17% of May Qtr client recruitment 3,5 3, 2,5 2, 1,5 Worldwide client base of market professionals, retail clients and network of introducers 1, 5 Aug- 4 Nov- 4 Feb- 5 May- 5 Aug- 5 Nov- 5 Feb- 6 May- 6 Aug- 6 Nov- 6 Feb- 7 May

8 $ % () % Number of clients dealing - Australia (monthly) 3,6 3,4 3,2 3, 2,8 2,6 2,4 2,2 2, 1,8 1,6 1,4 1,2 1, , 14, 12, 1, 8, 6, 4, 2, Jun-3 Sep-3 Dec-3 Mar-4 Jun-4 Sep-4 Dec-4 Mar-5 Jun-5 Sep-5 Dec-5 Mar-6 Jun-6 Sep-6 Dec-6 Mar-7 Jun-7 Return to strong growth Income and number of transactions¹ (monthly) Number of transactions Income 1 Includes closes, stops and rolls 1,8 1,6 1,4 1,2 1, May-2 Sep-2 Jan-3 May-3 Sep-3 Jan-4 May-4 Sep-4 Jan-5 May-5 Sep-5 Jan-6 May-6 Sep-6 Jan-7 May-7

9 )-$(!$ %"$ $$ Revenues growing strongly in current regions of focus CFD revenue by location of client CFD revenue by region 25 UK W estern Europe Singapore Australia Ireland Eastern Europe 2 Rest of World Asia Pacific Europe UK Far East Middle East Africa South Asia 15 Americas m 1 5 H1 6 H2 6 H1 7 H2 7 Introduced business is a key driver Overall H2 on H1 growth of 56% - 9 -

10 .!$ $/* $ Big opportunity; manageable, modest costs Cumulative clients trading Overseas office costs (annualised) 7 1,5 1,4 6 1,3 1,2 Marketing Other 5 1,1 1, No. of clients 4 3 Australia Singapore Italy Germ any Month from opening 1 Singapore Italy Germany New offices tracking early experience in Australia Singapore run rate close to group margin Minimal set up costs Limited headcount requirement Major expense (marketing) is discretionary - 1 -

11 !*% () %+$ $$ Turnover H1 26 H2 26 H1 27 H2 27 'm 'm 'm 'm UK Europe Asiapac ROW CFD Total UK Financial Spread Betting Financial Binaries Financial Betting Total Number of Clients H1 26 H2 26 H1 27 H2 27 UK 1,73 1,342 1,689 2,437 Europe 451 1,16 1,475 2,258 Asiapac 1,997 2,542 4,91 5,515 ROW CFD Total 3,582 5,13 7,437 1,57 UK Financial Spread Betting 11,98 14,322 13,767 15,273 Financial Binaries 2,572 2,889 3,383 4,99 Financial Betting Total 14,48 17,211 17,15 19,372 Significant CFD growth UK & Europe income per client reflects higher end clients Lower Asia Pacific and RoW income per client reflects: Higher proportion of direct retail clients Newer client base UK Financial Betting Income per client continues around 2, H2 impacted by large influx of new clients Income per Client H1 26 H2 26 H1 27 H2 27 UK 3,283 3,61 3,45 4,158 Europe 4,452 2,895 3,16 3,185 Asiapac 1,858 2,16 1,316 1,328 ROW 7,884 5,66 1,677 1,239 CFD Total 2,714 2,774 2,154 2,381 UK Financial Spread Betting 1,831 2,51 2,221 2,72 Financial Binaries 1, Financial Betting Total 1,692 1,852 1,964 1,

12 *$ Sports business has returned enhanced growth over last 2 years Sports revenue 14 34% compound growth m Fixed Odds Spread Betting Making a solid contribution Fixed odds risk managed on a unified business basis across binaries, extrabet and betting exchanges Dedicated IT development resource

13 ) $12 * %! *% # Dividend and use of cash for acquisition or return to shareholders is limited by regulatory capital requirements 31-May-6 31-May-7 m m Cash Total cash Less: Segregated client money (199.2) (391.3) Own cash Regulatory capital Share capital & reserves Goodwill (16.2) (16.2) Other (1.7) (1.3) Net capital (1) Regulatory requirement Market risk Counterparty risk Capital risk Operational risk Total (2) Capital increases with retained earnings Capital reduced by dividends, share buy-backs and acquisition of intangible assets Regulatory requirement increases as business grows Proposed final dividend ( 21m) payable in Oct will reduce surplus capital Offset by additional retained earnings Increased dividend pay out 6% of earnings Surplus regulatory capital (1-2)

14 $3, 4 % #5,$ Income volatility remains low 7, 3. 6, 5, 4, Daily revenue (6 day rolling average) revenue volatility (6 day coefficient of variability) Volatility of revenue remains within tight range Group s maximum exposure to global equity markets is 15m (increased from 13.75m in May 27) 3, 2, 1. No loss making days since 25 1,.5. May/21 Nov/21 May/22 Nov/22 May/23 Nov/23 May/24 Nov/24 May/25 Nov/25 May/26 Nov/26 May/

15 6 $ Enhancing the recruitment and conversion of clients within our existing retail financial businesses Launched in UK Jan 7 57% take up by UK spread betting clients Increased account opening Improved conversion Being rolled out progressively worldwide

16 61%,#! $ Technology is a competitive differentiator and a key driver of growth PureDeal TM One click dealing Information rich, customisable interface Price Improvement TM Reuters News Works on greater range of operating systems and browsers L2 TM DMA FX Ongoing improvements to functionality Mobile Huge range of devices, including BlackBerries and PDAs API

17 %* $ Europe has been the key focus of the last six months Continuing to build Italian and German operations Seminars and investment shows Introducers Direct advertising Preparing for MiFID Office in Madrid Office in Paris Building language capability within the UK office Introducers and white labels broaden geographic reach Outside Europe forex is likely to be a key product

18 .%3 Strong growth from UK and Australia continues Europe becoming significant, Madrid and Paris offices open in H1 8 Introducers and white labels further broaden geographic reach Continuing technology innovation TradeSense, rolling out across our international offering Record revenue in June, strong account opening continues Confident about growth prospects

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