City investors might be sitting on their hands, too afraid to dip into markets that are fractious and tough to call.
But for the hardy retail punters at IG Index, stock market turmoil and the eurozone crisis are opportunities to look for quick profits.
Parent group IG Group, the biggest spread betting house, today reported a 17% rise in year end revenues to £367 million. In the UK, those sales are up 15% to £192 million, largely driven by more trading from the same high-rolling clients.
Chief executive Tim Howkins explains: “In the last 18 months we’ve been focused on recruiting a smaller number of better quality clients.”
What do they know that the large institutions do not?
“The difference is the time horizon,” says Howkins. “The average professional is investing long term, our clients are trading short term trends.”
So even if these punters are scarred away by sudden jolts, they quickly come back. “Fundamentally, clients have a level of trading they want to do,” he adds.
IG’s profit margin remains at 50%, something few industries can match for any length of time.
The City expects the company to make profit for the year of about £185 million.
UBS said in a note: “The company is a clear market leader in a growing industry. They have established an international platform in Europe, Asia and to a lesser extent the US, and client numbers continue to grow.”
It has 130,000 clients in all.
IG shares today slipped 6.4p to 459.6p.
