IG CEO retires as profits fall after Swiss currency problems

IG CEO retires as profits fall after Swiss currency problems

Tuesday, July 21, 2015
CEO Tim Howkins will depart later this year

Financial spread betting company IG Group was the biggest faller on the FTSE 250 today (Tuesday) after announcing a 13 per cent dip in pre-tax profits and the departure of its long-serving chief executive.

The company’s share price had hit an all-time high of 806.5p on Monday, but had dropped by more than 7 per cent by the middle of Tuesday afternoon on its full-year update and the announcement that Tim Howkins is to retire in October after nine years at the helm.

IG Group said that it took a hit from the surge in the Swiss franc in January when the Swiss National Bank announced without notice that it was ceasing intervention in the franc exchange rate, with pre-tax profits down from £194.9m (€278.1m/$303.1m) in the previous 12-month period to £169.5m for the year to May 31.

However, it noted that underlying revenue - before the impact of the Swiss franc event - was up 8 per cent at £400.2m, while underlying pre-tax profit was down by 0.9 per cent to £193.2m.

“2015 was another year of good progress on our strategic initiatives, coupled with a solid underlying set of financial results,” Howkins said. “As part of our product and geographic diversification strategy, we launched our execution-only stockbroking product in the UK, Ireland and the Netherlands and extended it into Germany and Austria after year end. 

“We also successfully acquired licences and opened offices in Switzerland and Dubai.”

Subject to regulatory approval, chief operating officer Peter Hetherington will assume the role of interim chief executive upon Howkins’ departure.

“During my time at IG I have seen our business transform, as we have grown revenues from £12m to an underlying £400m,” Howkins said. “In my time as CEO, we have grown earnings per share from 10.88 pence to an underlying 41.07 pence, and have gone from less than 10 per cent of our revenue coming from outside the UK to now almost 50 per cent.”

IG Group chairman Andy Green added: “The board is disappointed to lose somebody with Tim's proven leadership skills but fully understands his decision.”

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