Quiet financial markets blamed for drop in first-quarter revenue at IG Group

The company saw particularly low trading volumes in foreign exchange, where activity has been subdued over the past year by a combination of low interest rates across the developed world and an uncertain regulatory environment.

“The first three months of the company’s year were particularly quiet in the financial markets, with volumes and volatility close to historic lows and the continuation of recent weakness in foreign exchange activity,” said IG, which also provides trading in shares and financial spread-betting.

Revenue in the three months to August 31 fell 9 per cent to £85.6m compared with a year earlier, the company said.

It added that much of the year-on-year difference occurred in June, as the same month last year saw unusually strong trading volumes in response to heavy falls in equity markets on the back of US monetary stimulus tapering fears and concerns over the Chinese economy.

The company did not disclose its profit for the first quarter in the update.

It will next publish profit figures in January when it reports its half-year results.

IG shares have fallen 3 per cent so far this year, reflecting the market’s caution over the short-term trading outlook, Citi analyst Hugo Mills said.

IG chief executive Tim Howkins said the company had no plans to revise its full-year guidance. “I don’t think it (first-quarter results) really changes our view of the year, but clearly things need to accelerate a bit to get to some of the original forecasts we had,” he said.

Mr Howkins declined to say when performance might improve, but said the first two weeks of September had been busier, with the Scottish referendum providing opportunities to trade.