IG Group, the FTSE 250 firm, has announced plans to spend an additional £50m on share buybacks following its acquisition of trading app Freetrade.
The company's six-month results up to 30 November revealed an extension of its previous share buyback programme from £150m to £200m, as reported by .
IG Group CEO Breon Corcoran stated: "It is pleasing to show how we can both invest in accretive growth and return capital at attractive equivalent rates of return on our buyback, all whilst safeguarding our robust balance sheet."
The results showed a revenue increase of 11 per cent to £522.5m over the six months, with adjusted profit before tax rising 30 per cent from £205.7m to £266.8m. Despite IG Group's strong growth, analysts had mixed reactions to the results.
Jefferies had predicted trading revenue would total £453m, but it only grew to £451.7m, although the analysts had forecast an adjusted profit before tax of only £242m. RBC, on the other hand, predicted a 12 per cent growth in revenue and a 40 per cent growth in earnings per share, compared to actual growth of 43 per cent.
Corcoran added: "First half performance reflected more supportive market conditions, but we have work to do to grow active customers which will be necessary to deliver sustainably stronger growth," Last week, IG Group acquired stock trading app Freetrade for £160m, with the firm set to move to IG Group in mid-2025.
The direct-to-consumer trading platform, which burst onto the scene in 2018, provides investors with commission-free options for shares, ETFs, and gilts. The announcement of its sale received mixed responses from investors, some of whom were vexed by a sale price that didn't match up to recent fundraising valuations.
"CEO Breon Corcoran has re-energised the investment case for IG Group setting out the opportunity and identifying areas of improvement," remarked RBC analyst Ben Bathurst. On the positive side, IG Group's stock has seen a notable surge, climbing 25 per cent over the past half-year.
Despite this increase, Bathurst pointed out that share prices are still "remain at a discount to historical averages and to peers".
