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British online trading firm IG's profit rises as client base grows

[BENGALURU] British online financial trading company IG Group Holdings' full-year pretax profit rose three per cent, beating analysts' estimates, as an expanding client base helped it grow revenue despite quiet markets.

The company, which provides online stockbroking and trading services to retail investors, also said on Tuesday it had made good progress in getting regulatory approval for a subsidiary based in the European Union as it prepares for Britain's exit from the bloc.

Shares in the company, which did not say where its EU subsidiary would be located, has risen 7.6 per cent to 597 pence by 0807 GMT, the second-biggest gainer on the FTSE Midcap Index .

Founded in 1974 as the world's first spread-betting company, IG Group is now in the early stages of exploring further opportunities outside the EU, it said.

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IG reported a three per cent rise in pretax profit for the year ended May to £213.7 million (S$384.285 million), beating company compiled consensus estimates of £211.7 million, based on five analysts, in a year it called one of the least volatile in financial markets for decades.

Markets were volatile last year, roiled by global politics, such as US President Donald Trump's victory and Britain's decision to leave the European Union. But markets calmed down after the US election in November.

Full-year net trading revenue rose 8 per cent to £491.1 million, IG said. Its client base increased 18 per cent in the year to 186,000.

Revenue in Britain, its largest market, rose marginally to £223 million, while in Europe, Middle East and Africa it rose 17 per cent to £137.5 million.

Britain, due to its large client base responds more to volatility, both negatively and positively, IG said.

Quiet markets around the Brexit vote and the US Presidential election and a higher number of clients meant that average revenue per client was down by 7 per cent to £3,446, it said.

The company said it would pay a final dividend of 22.88 pence per share, taking its full-year payout 2.9 per cent higher to 32.3 pence per share.