IG profit jumps, shares down on growth worry

LONDON, Jan 14 (Reuters) – British spread-betting firm IG Group Plc met forecasts with a 60 percent rise in first-half underlying earnings on Monday, but its shares skidded 6 percent, weighed by concerns of slower second-half growth.

By 1040 GMT, shares in IG Group, which allows investors to speculate on currencies, interest rates, shares and indexes, were the second biggest mid-cap loser with a 4.7 percent fall to 374 pence.

“Our (full-year) profit before tax forecast of 88 million pounds assumes a sharp slowdown in H2 to just 2 percent growth,” Citigroup analysts said.

“We doubt consensus will move dramatically today given costs in H2…In the absence of consensus upgrades, the reaction may be muted today.”

IG said it had earnings before interest, tax, depreciation and amortisation (EBITDA) of 48.4 million pounds ($94.7 million) in the six months to Nov. 30, in line with the forecast of two analysts polled by Reuters. Profit before tax jumped 63 percent to 48.2 million on a revenue of 85.8 million.

“Market volatility undoubtedly played a part in the growth,” IG Group said in a statement.

“We have continued to see good levels of client activity since the period end. All parts of the business are performing well and we remain confident about the group’s prospects for the current year.”

The group, which set up offices in France and Spain late last year, said early signs from these new markets were encouraging and expected to add about 2.5 million pounds of annual costs.

Analysts expect full-year pretax profit of 92.3 million pounds, according to Reuters Estimates. (Reporting by Mark Potter and Miyoung Kim, Editing by Mike Elliott and David Cowell)