IG stages fightback after attack on spread-betting
REPORTING flat revenues isn’t usually a cause for celebration.
But in IG Group’s case, shares surged after it posted first-quarter turnover of £129.1m – up by the thinnest of margins from £128.9m last year.
Investors breathed a sigh of relief as the spread-betting firm added more customers and cashed in on the rollercoaster ride that took over global stock markets in August.
A candidate has also been lined up to replace outgoing chairman Andy Green, who stepped down after the annual meeting yesterday, though the replacement needs a green light from regulators.
The spread-betting industry has boomed in recent years by allowing ordinary punters the chance to bet on financial markets in the same way as City traders.
Using a smartphone or computer they can take huge bets on currencies, stock markets and commodities, such as oil, and ramp up their gains – or losses – through special investment deals. But IG and its peers, which include CMC
Markets (up 3.1pc, or 3.2p, to 105.8p) and Plus 500 (up 5pc, or 36.2p, to 766.2p), have been hammered by a clampdown on a risky type of bet called a contract for difference (CFD).
In light of this, IG’s expectationbeating results were described as a ‘robust performance’ by Shore Capital analysts, in what is seasonally a slower quarter, and shares rallied 10.3pc, or 59.4p, to 638p.
Over-50s insurance and travel group Saga rocketed 16.3pc higher, or 7.4p, to 52.8p, despite profits tumbling by more than 50pc to £52.8m.
The group, whose shares dived by more than 40pc in April following a profit warning, kept its previous guidance for the full-year, reassuring traders. And it also had an encouraging start to new, three-year fixed-price home and motor insurance policies, selling 175,000 during the first half.
Chief executive Lance Batchelor, who will leave in January, said Saga was ‘open minded’ about its future after US activist investor Elliott bought a 5pc stake.
Batchelor looks likely to hit the ground running when he leaves. As well as plans to do lots of sailing, he has agreed to be chairman of one company and is in talks to chair another two.
Centrica climbed 1.1pc, or 0.8p, to 73.58p, after Jefferies analysts upgraded it to ‘buy’ and dubbed the utilities firm a ‘value wildcard’. But rivals Severn Trent and
United Utilities lost ground as analysts took a more cautious stance on their stock and downgraded them.
Severn Trent fell 0.7pc, or 15p, to 2087p, while United Utilities slid 0.4pc, or 3.2p, to 800.2p.
The FTSE 100 closed up 0.6pc, or 42.37p, at 7356.42, while the midcap FTSE 250 ended up 0.2pc, or 35.03 points, at 20089.46.
Spectris jumped 1pc, or 24p, to 2519p, after hiving off BTG – a division which makes measuring instruments for the pulp and paper industry – to German group Voith for £283m.
Small- cap insurance services provider Charles Taylor surged after it agreed to be taken private for £261m. Its board will recommend shareholders vote in favour of the buyout, by private equity firm Lovell Minnick Partners, at a meeting in November. The news sent shares soaring 38.5pc, or 90.5p, to 325.5p – notably above Lovell Minnick’s offer price of 315p.
Over on AIM, City Pub Group – which has 47 pubs across the south of England and Wales – fell out of favour after it indicated it will scale back on buying new sites by taking ‘a much more prudent and even more selective’ approach to acquisitions ahead of Brexit.
Shares fell 8.5pc, or 18.5p, to 199p, despite a 19pc rise in pretax profits to £1.9m and a 36pc revenue jump to £27m.