LEI No:
2138003A5Q1M7ANOUD76
Interim results for the six
months ended 30 November 2023
25 January 2024
IG Group Holdings plc ("IG", "the
Group", "the Company"), a global fintech, today announces its
results for the six months ended 30 November 2023 ("H1
FY24").
"Continued execution of the
strategy, with a sharp focus on clients, costs and capital has
served the Group well in soft market conditions to deliver
attractive margins and returns to shareholders."
Highlights
- Performance in H1 FY24[1] reflected
softer market conditions and against a strong
comparative:
- Total revenue of £472.6 million (H1 FY23: £519.1 million),
down 9%.
- Net trading revenue of £402.4 million (H1 FY23: £494.9
million), down 19%, reflecting market volatility across a range of
asset classes materially lower than in H1 FY23.
- Net interest income of £70.2 million (H1 FY23: £24.2 million)
increased significantly, driven by higher interest rates across all
markets.
- tastytrade achieved another consecutive record half of total
revenue, increasing by 29% to $117.8 million (H1 FY23: $91.4
million).
- Active clients of 296,300 (H1 FY23: 312,000) underlined IG's
sophisticated and loyal client base, while new clients acquired of
33,800 (H1 FY23: 37,500) reflected the continued demand for IG's
products and services despite soft market conditions in the
period.
- Adjusted total operating costs of £281.1 million (H1 FY23:
£256.8 million), were up 9% on H1 FY23, but down 1% against H2
FY23. Statutory total operating costs of £310.4 million (H1 FY23:
£279.9 million) increased 11%.
- Adjusted profit before tax of £205.7 million (H1 FY23: £260.7
million) was down 21%. Statutory profit before tax of £176.4
million (H1 FY23: £240.5 million). Adjusted profit before tax
margin remains attractive at 43.5% (H1 FY23: 50.2%).
- Adjusted basic EPS was 38.9p (H1 FY23: 49.7 pence). Statutory
basic EPS was 33.4 pence (H1 FY23: 45.8 pence).
- Operational highlights:
- Launched company-wide operational improvement programme in
October 2023, which will result in structural cost savings of £50
million per year by FY26.
- High quality and strength of our risk management framework
and controls evidenced by a 40% reduction in the regulatory capital
requirement, to £290 million.
- Increased capital returns in line with the Capital Allocation
Framework:
-
Repurchased £149.2 million of shares in the
period, of which £124.5 million was part of the £250 million share
buyback scheme announced in July 2023. Value of shares repurchased
under the current scheme as at 22 January 2024 was £139.5
million.
-
Increased the interim cash dividend to 13.56
pence per share (H1 FY23: 13.26 pence per share).
-
Approved £4 million in donations, in line with
our commitment to contribute 1% of adjusted profit after tax to
charitable causes annually.
- Announced the appointment of Breon Corcoran as Chief
Executive Officer from 29 January 2024.
Financial Summary1
|
H1
FY24
|
H1 FY24
adjusted
|
H1
FY23
|
H1 FY23
adjusted
|
Change
%
|
Adjusted change %
|
Total revenue (£m)
|
472.6
|
472.6
|
519.1
|
519.1
|
(9%)
|
(9%)
|
Net trading revenue
(£m)
|
402.4
|
402.4
|
494.9
|
494.9
|
(19%)
|
(19%)
|
Total operating costs2
(£m)
|
310.4
|
281.1
|
279.9
|
256.8
|
11%
|
9%
|
Profit before tax3
(£m)
|
176.4
|
205.7
|
240.5
|
260.7
|
(27%)
|
(21%)
|
Profit after tax (£m)
|
132.7
|
154.8
|
194.9
|
211.3
|
(32%)
|
(27%)
|
Basic earnings per share
(p)
|
33.4
|
38.9
|
45.8
|
49.7
|
(27%)
|
(22%)
|
Interim dividend per share
(p)
|
13.56
|
-
|
13.26
|
-
|
2%
|
-
|
1 From continuing operations in FY23.
2 H1 FY24 adjusted operating costs
exclude £29.3 million of one-off items and recurring non-cash items
(H1 FY23: £23.1 million).
3 Adjusted profit before tax in H1 FY23 includes £2.9 million
income for the reimbursement of costs relating to the sale of
Nadex.
Charlie Rozes, Acting Chief Executive Officer,
commented:
"It's encouraging to see the
benefits of our diversification strategy paying off, despite a
mixed trading backdrop for our clients, driven by persistently low
levels of market volatility in Q1 and Q2. While some of our
businesses saw revenue weakness, others achieved strong results in
the period. Our exposure to a wider range of revenue drivers will
underpin further growth in the Group as we deliver on our strategy.
At the same time, we've taken action to control growth in the cost
base, significantly reducing the rate of cost growth from FY23, yet
still making selective investments in the business. As a result,
we've maintained attractive profit margins in the
period.
"In addition to closely managing
the cost base, our discipline around capital allocation saw us make
further progress with our ongoing share buyback programme and also
declare an increased interim dividend per share in line with our
Capital Allocation Framework. We remain confident and optimistic
about the outlook for IG and continue to be well positioned to
benefit from the structural growth of self-directed trading and
investing. We are the home of active traders worldwide, bringing
exciting and innovative new products to market, backed by the best
technology and trade execution."
Further information
Analyst presentation
There will be an analyst and
investor presentation at 9:30am (UK Time) on Thursday 25 January
2024.
The presentation will also be
accessible live via audio webcast at:
Webcast. If you wish to listen
via conference call, please use the following link:
Conference Call. The audio
webcast of the presentation and a transcript will be archived
at:
IG Group - Financial Results.
Financial reporting calendar
IG regularly updates the market on
financial performance and delivery against strategy. The next
financial update will be the Third Quarter Revenue Update in March
2024.
Alternative performance measures
The Group's management believe
that the alternative performance measures included in this document
provide valuable information to readers of the financial statements
as they provide a more consistent basis for comparing business
performance between financial periods. They also provide more
detail on performance which the managers of the business are most
directly able to influence, or which is most relevant for an
assessment of the Group's results. Furthermore, they reflect how
operating targets are defined and performance is monitored by the
Group's management. However, any alternative performance measures
in this document are not a substitute for statutory measures and
readers should consider the statutory measures as well. Refer to
the appendix for further information and calculations of
alternative performance measures included throughout this document,
and the most directly comparable statutory measures.
Forward-looking statements
This interim statement, prepared
by the Company, may contain forward-looking statements about the
Group. Such forward-looking statements can be identified by the use
of forward-looking terminology, including the terms "believes",
"projects", "estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology.
Forward-looking statements involve
known and unknown risks, uncertainties, assumptions and other
factors which are beyond the Company's control and are based on the
Company's beliefs and expectations about future events as of the
date the statements are made. If the assumptions on which the Group
bases its forward-looking statements change, actual results may
differ from those expressed in such statements. There are a number
of factors that could cause actual results and developments to
differ materially from those expressed or implied by these
forward-looking statements, including those set out under
"Principal Risks" in the Group Annual Report for the financial year
ended 31 May 2023. The Annual Report can be found on the Company's
website (www.iggroup.com).
Forward-looking statements speak
only as of the date they are made. Except as required by applicable
law and regulation, the Company undertakes no obligation to update
these forward-looking statements.
Some numbers and period on period
percentages in this statement have been rounded or adjusted to
ensure consistency with the financial statements. This may lead to
differences between subtotals and the sum of individual numbers as
presented.
No offer or solicitation
This announcement is not intended
to, and does not constitute or form any part of, an offer to sell,
or an invitation to purchase or subscribe for any securities, or a
solicitation of any vote or approval in any
jurisdiction.
No profit forecasts or estimates
No statement in this announcement
is intended as a profit forecast or estimate for any
period.
About IG
IG Group (LSEG:IGG) is a global
fintech company that provides online trading platforms and
educational resources to empower ambitious clients around the
globe. Established in 1974 and headquartered in the UK, IG Group is
a FTSE 250 company that offers clients access to ~19,000 financial
markets worldwide.
For 50 years, the Company has
grown and evolved its technology, product offering, and educational
tools and content to meet the needs of its retail and institutional
clients. IG Group continues to innovate its offering for the next
generation of traders and investors through its market-leading
brands: IG, tastytrade, IG Prime, Spectrum, and
DailyFX.
Acting Chief Executive
Officer's Statement
The first half results highlight
the success of our diversification strategy which positioned us
well to deliver attractive profit margins and return capital to
shareholders despite subdued market conditions in the period. The
business remains strongly cash generative which has allowed us to
invest in existing and new products to better serve our clients and
achieve long-term growth and sustainable distributions for
shareholders. The results demonstrate the strength and breadth of
our business and I remain very confident in the outlook.
On 8 December 2023, we announced
the appointment of Breon Corcoran as Chief Executive Officer from
29 January 2024. Breon has an exceptional track record of
delivering strong results for all stakeholders and I look forward
to welcoming him to IG.
Strategic progress in H1
In FY19, we launched a strategy to
expand and diversify the Group by product and geography, building
on our strengths in trading and trading products, technology and
risk management. We continue to make great progress executing this
strategy as strong growth in our exchange traded derivatives
business has increased the proportion of total revenue from these
products from 3% in FY19 to 21% in H1 FY24, while US revenue has
risen from 4% to 22% over the same period. The benefit of
diversification was clear in this period, as weaker revenues in OTC
were offset by strength in exchange traded products.
tastytrade delivered another
consecutive half year period of record revenue reflecting growth in
both trading revenue and interest income, despite materially lower
equity market volatility compared to the prior year. Market share
increased through H1 FY24 reflecting the success of our first
national brand campaign which launched in late FY23, and our
ability to attract clients from competitors.
Total client equity on the
tastytrade platform reached record levels with average balances in
H1 up 18% on FY23, as we continued to attract large balance
accounts. We are laying the foundations for future growth with the
implementation of an industry leading CRM platform in H1 FY24 and
enhancements to the client onboarding journey this
month.
In Europe, Spectrum - our
pan-European exchange for securitised derivatives - added Directa
as its latest independent member. Directa is a pioneering online
broker in Italy, servicing over 61,000 active accounts representing
combined customer assets of £3bn, and as a member of Spectrum, will
offer its Italian retail customers the ability to trade securitised
derivatives 24 hours a day, five days a week.
IG has a long and proven track
record of growth and innovation. Innovation remains at the heart of
our culture and we continue to develop new products and services
though our incubator programme. This includes: tastycrypto, our
self-custody digital wallet; Bad Trader a network designed for
Millennial and Gen Z traders; and The Small Exchange, an innovative
new US market infrastructure provider which is currently in
development phase.
In the summer, starting in
Singapore and the UK, we will be launching our next generation
stock trading platform which will provide comprehensive coverage of
ETFs, mutual funds, bonds, thousands of stocks and a cash
management offering. Our existing stock trading and investments
platform has over 90,000 customers, despite a more limited product
range. Our next generation platform will be highly differentiated
by providing unique products and features, risk management tools,
flexible and competitive pricing and a highly tailored user
experience.
Operational improvement programme
In October we announced the
operational improvement programme that will simplify and streamline
the business, better positioning it for further growth. These
actions will create a leaner, more agile business and further
enhance the Group's flexibility to innovate and deliver world class
customer experience.
We expect to reduce headcount by
approximately 300, which represents around 10% of the total
workforce at the end of FY23. Alongside other efficiency measures,
including expanding the use of our global centres of excellence, we
expect to deliver full run rate cost savings of £50 million per
year. These initiatives are expected to drive operating margin
expansion over the medium term.
We are on track to deliver
structural savings of £10 million in FY24, £40 million in FY25 and
£50 million in FY26. We anticipate non-recurring costs to achieve
these savings of approximately £18 million with the majority
incurred in FY24 and the remainder in FY25. £10 million of
execution costs were incurred in H1 FY24.
In addition to the structural
savings, in FY24 specifically, variable costs will be reduced by an
additional £10 million reflecting the softer market conditions in
the first half of the year.
Capital allocation
On 1 January 2022, the Group
transitioned to the Investment Firm Prudential Regime ("IFPR"). As
announced in September, following our first Supervisory Review and
Evaluation Process ("SREP") under the new regime, the Group's
regulatory capital requirement reduced from £497.4 million at 31
May 2023 to £289.8 million as at 31 August 2023, evidencing the
high quality and strength of our risk management frameworks and
controls, following years of steady investment and
development.
During the period we repurchased
£149.2 million of shares, of which £124.5 million was part of the
£250 million share buyback scheme announced in July
2023.
We have increased the interim cash
dividend to 13.56 pence per share (H1 FY23: 13.26 pence per share)
and approved £4 million in donations, in line with our commitment
to contribute 1% of adjusted profit after tax to charitable causes
annually.
As of 30 November 2023, headroom
over the Group's minimum regulatory capital requirements was £541.8
million. Regulatory capital resources reduced during the period
from £996.3 million reported as at 31 May 2023 to £831.6 million,
reflecting the timing of dividend payments and share buybacks
amounting to £276.4 million in the period. We expect headroom to
increase in the second half.
The Board will continue to
allocate capital in a disciplined manner, in line with our Capital
Allocation Framework.
Outlook
The market conditions we
experienced during H1 have continued into the beginning of our Q3.
Despite this, the business continues to perform well reflecting our
increasingly diversified revenue mix.
Higher interest rates have
continued to drive growth in our interest income and finance
income. Given the geographic mix and balances of client and
corporate cash, we expect to generate a similar amount of interest
income in H2 as in H1, and higher finance income in H2 than in
H1.
Given our active approach to cost
management in softer market conditions and operational improvement
programme, we continue to expect an adjusted PBT margin in the
mid-to-high 40s in FY24, in line with our medium-term
guidance.
In summary, we've delivered robust
results in H1 FY24 despite the soft market backdrop. Profit margins
remain strong and we have a strong balance sheet which puts us in
an excellent position to invest in the business, execute our
strategy, and provide attractive returns to our
shareholders.
Charlie Rozes
Acting CEO
Business Performance
Review
Summary Group Income Statement
£m
|
H1 FY24
|
H1 FY24
adjusted
|
H1 FY23
|
H1 FY23
adjusted
|
Change %
|
Adjusted change
%
|
Net trading revenue
|
402.4
|
402.4
|
494.9
|
494.9
|
(19%)
|
(19%)
|
Net interest income
|
70.2
|
70.2
|
24.2
|
24.2
|
190%
|
190%
|
Total revenue
|
472.6
|
472.6
|
519.1
|
519.1
|
(9%)
|
(9%)
|
Betting duty and other operating
income1
|
0.3
|
0.3
|
-
|
(2.9)
|
|
|
Net operating income
|
472.9
|
472.9
|
519.1
|
516.2
|
(9%)
|
(8%)
|
Total operating
costs2,3
|
(310.4)
|
(281.1)
|
(279.9)
|
(256.8)
|
11%
|
9%
|
Operating profit
|
162.5
|
191.8
|
239.2
|
259.4
|
(32%)
|
(26%)
|
Other net losses
|
(1.5)
|
(1.5)
|
(1.1)
|
(1.1)
|
|
|
Net finance income
|
15.4
|
15.4
|
2.4
|
2.4
|
|
|
Profit before tax from continuing
operations
|
176.4
|
205.7
|
240.5
|
260.7
|
(27%)
|
(21%)
|
1 H1 FY23 adjusted betting duty and other operating income
excludes £2.9 million of income for the reimbursement of costs
relating to the sale of Nadex.
2 Operating costs include net credit losses on financial
assets.
3 H1 FY24 adjusted operating costs
exclude £29.3 million of one-off items and recurring non-cash items
(H1 FY23: £23.1 million).
All results are presented on a
continuing operations basis which excludes items related to the
sale of Nadex operations which completed in FY22 and was classified
as a discontinued operation. In FY23, the Group subsequently
disposed of assets related to Nadex.
Statutory and adjusted results
In addition to statutory results,
we have also presented results on an adjusted basis, which excludes
certain one-off items and recurring non-cash items. A
reconciliation of alternative performance measures used in this
report is contained in the appendix.
In H1 FY24, adjusted operating
costs excludes £19.3 million of one-off costs and recurring
non-cash costs associated with the tastytrade acquisition and
integration and £10.0 million of costs relating to the operational
improvement programme.
In H1 FY23, adjusted other
operating income excludes £2.9 million of income for the
reimbursement of costs relating to the sale of Nadex. Adjusted
operating costs excludes £20.2 million of costs and recurring
non-cash costs associated with the tastytrade acquisition and
integration and £2.9 million of costs relating to the sale of
Nadex.
The following analysis is
presented on an adjusted basis to present a more accurate view of
underlying performance.
Total revenue by product
|
Total revenue
(£m)
|
|
H1 FY24
|
H1 FY23
|
Change %
|
OTC derivatives
|
352.6
|
422.9
|
(17%)
|
Exchange traded
derivatives
|
99.7
|
83.8
|
19%
|
Stock trading and
investments
|
20.3
|
12.4
|
63%
|
Total revenue
|
472.6
|
519.1
|
(9%)
|
Total revenue consists of net
trading revenue and net interest income. Total revenue was £472.6
million in H1 FY24, down 9% on H1 FY23. OTC derivatives total
revenue was £352.6 million, down 17% reflecting softer market
conditions in the period, and lower levels of client activity.
Exchange traded derivatives total revenue was £99.7 million, up 19%
on the prior period. This includes tastytrade total revenue of
£94.3 million, up 21%, benefitting from both increased interest
rates and higher cash balances, offset by a reduction in net
trading revenues, down 5%. Stock trading and investments total
revenue was £20.3 million, up 63% on H1 FY23, benefitting from
increased interest rates, while net trading revenue remained
flat.
Non-OTC revenue made up 25% of
total revenue in H1 FY24, up from 19% in H1 FY23 reflecting the
continued focus and successful delivery of revenue
diversification.
Net trading revenue
Net trading revenue was £402.4
million, 19% lower than H1 FY23 primarily due to lower levels of
client activity as clients found fewer opportunities to trade in
subdued market conditions.
Net trading revenue performance by product
|
Net trading revenue
(£m)
|
|
|
H1 FY24
|
H1 FY23
|
Change %
|
|
OTC derivatives
|
327.7
|
416.5
|
(21%)
|
|
Exchange traded
derivatives
|
63.6
|
67.1
|
(5%)
|
|
Stock trading and
investments
|
11.1
|
11.3
|
(1%)
|
|
Net trading revenue
|
402.4
|
494.9
|
(19%)
|
|
Net interest income
|
70.2
|
24.2
|
190%
|
|
Total revenue
|
472.6
|
519.1
|
(9%)
|
|
|
|
|
|
|
|
Active clients (000)
|
Net trading revenue
per client (£)
|
|
H1 FY24
|
H1 FY23
|
Change %
|
H1 FY24
|
H1 FY23
|
Change%
|
OTC derivatives
|
147.3
|
159.1
|
(7%)
|
2,225
|
2,618
|
(15%)
|
Exchange traded
derivatives1
|
70.1
|
72.2
|
(3%)
|
907
|
922
|
(2%)
|
Stock trading and
investments
|
89.1
|
92.2
|
(3%)
|
125
|
122
|
2%
|
Total2
|
296.3
|
312.0
|
(5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Exchange traded derivatives revenue per client calculation
excludes revenue generated from the Group's US market maker in H1
FY23.
2 Total Group active clients have been adjusted to remove the
clients who are active in more than one product category
(multi-product clients) to give a unique client count. In H1 FY24
there were 10,200 multi-product clients, compared with 11,500 in H1
FY23.
|
First trades
(000)
|
|
H1 FY24
|
H1 FY23
|
Change %
|
|
OTC derivatives
|
20.7
|
24.3
|
(15%)
|
Exchange traded
derivatives
|
10.7
|
10.5
|
2%
|
Stock trading and
investments
|
4.2
|
5.1
|
(17%)
|
Total1
|
33.8
|
37.5
|
(10%)
|
1 Total Group first trades have been adjusted to remove the
clients who traded in more than one
product category to give a
unique first trade count.
OTC derivatives
OTC derivatives net trading
revenue of £327.7 million was down 21%, reflecting a reduction in
client activity with active clients down 7% on H1 FY23 and average
revenue per client falling by 15%. Lower demand in the market
resulted in first trades reducing by 15% on H1 FY23, however H1
FY24 first trades were in line with H2 FY23 (H2 FY23:
21,200).
UK and EU OTC derivatives net
trading revenue was £162.5 million, down 22%. Within this, active
clients were down 7% year-on-year and revenue per client was down
16%. The drop in clients was observed in Q1, with Q2 clients in
line with the previous quarter.
Australia OTC derivatives net
trading revenue of £41.6 million decreased 16%, with similar
decreases in active clients and revenue per client, down 8% and 9%
respectively.
Japan OTC derivatives net trading
revenue was £38.9 million, down 30% on a record H1 FY23
performance. Active clients were down 7%, while revenue per client
was down 25% as some of our higher value clients reduced their
trading having not seen opportunities in the market.
Singapore OTC derivatives net
trading revenue was £35.1 million, down 4% on H1 FY23 but up 11% on
H2 FY23. Active clients were down 17% on H1 FY23 while revenue per
client was up 16% year on year. This reflects a change in client
mix, as our largest clients continued to trade in the period, while
lower value clients reduced trading.
US OTC derivatives net trading
revenue decreased 32% as net trading revenue per client decreased
32% year on year while active client numbers remained in line with
the prior year period.
Exchange traded derivatives
Net trading revenue from exchange
traded derivatives was £63.6 million, down 5%.
In US Dollars, tastytrade's net
trading revenue was up 2% year on year to $72.9 million (H1 FY23:
$71.8 million). In reporting currency, tastytrade's net trading
revenue in H1 FY24 was £58.2 million, decreasing 5% on the prior
year. Active clients reduced slightly in the half, down 3% on the
prior period, while revenue per client reduced by 2% driven by
foreign exchange movements. First trades in the period increased by
4% on H1 FY23.
Spectrum's net trading revenue was
£5.4 million, in line with the prior year with a 7% reduction in
active clients, and a 12% reduction in first trades, offset by a
higher average revenue per client, up 6%. This half saw the
onboarding of the external broker, Directa who are trading at
increasing volumes.
Stock trading and investments
Net trading revenue from stock
trading and investments was £11.1 million, in line with H1 FY23.
Active clients reduced by 3% on the prior period while the average
revenue per client increased by 2%. Despite the drop in active
clients, the assets under administration increased to £3.4 billion,
an increase against the £3.3 billion at the end of FY23 and £3.2
billion at H1 FY23. First trades in the period were down 17% on H1
FY23, and down 9% on H2 FY24.
Net interest income
Net interest income on client
balances in H1 FY24 was £70.2 million, a significant increase on
the prior year reported interest of £24.2 million, up 190%.
Interest income made up 15% of total revenue, a large increase from
the 5% in H1 FY23 and 11% in H2 FY23. The increase reflects higher
interest rates and significant client balances.
In our US businesses, client cash
balances at the end of the period were $1.9 billion (30 Nov 2022:
$1.9 billion). This contributed £37.3 million of interest income
(H1 FY23: £16.9 million).
Outside of the US, client balances
of £2.5 billion were down 12% (30 Nov 2022: £2.9 billion). This
included £410.2 million of client funds on the balance sheet (30
Nov 2022: £452.2 million) for which the interest is recognised
within the net finance income line. Interest income earned on the
remaining segregated client money balance was £32.9 million
compared with £7.3 million in H1 FY23.
Adjusted operating costs
Adjusted operating costs excludes
£29.3 million of one-off items and recurring non-cash items in
order to present a more accurate view of underlying performance. A
reconciliation of alternative performance measures used in this
report is contained in the appendix.
Adjusted operating
costs for H1 FY24 were £281.1 million, 9% higher
than H1 FY23. The increase reflected higher average headcount,
inflationary increases, higher net credit losses, costs for ongoing
litigation, and continued investment in technology.
Adjusted operating costs from continuing
operations
£m
|
H1 FY24
|
H1 FY23
|
Change %
|
Fixed remuneration
|
100.2
|
93.1
|
8%
|
Advertising and
marketing
|
43.8
|
43.7
|
0%
|
Revenue related costs
|
30.6
|
26.6
|
15%
|
IT, structural market data and
communications
|
23.8
|
20.9
|
14%
|
Depreciation and
amortisation
|
17.7
|
14.8
|
20%
|
Legal and professional
|
14.2
|
11.5
|
23%
|
Other costs
|
25.7
|
21.9
|
17%
|
Variable remuneration
|
25.1
|
24.3
|
3%
|
Total operating costs
|
281.1
|
256.8
|
9%
|
|
|
|
|
Headcount - average
|
2,754
|
2,604
|
6%
|
H1 FY24 fixed remuneration was
£100.2 million, up 8%, reflecting inflationary salary increases and
headcount increase as we continued to invest in the Group's
strategic and incubator projects.
Revenue related costs include
market data charges, client payment charges, provisions for client
and counterparty credit losses and brokerage trading fees. Revenue
related costs increased by 15% to £30.6 million. With the exception
of client and counterparty credit losses, all revenue related costs
decreased year on year reflecting the lower levels of client
activity. Client and counterparty credit losses increased to £10.5
million in the period (H1 FY23: £1.1 million), which included an
isolated provision for bad debts arising against a small number of
professional clients.
IT maintenance, structural market
data charges, and communications costs were £23.8 million, an
increase of 14% reflecting increased investments in technology to
upgrade existing systems, support future growth and deliver new
product offerings. Inflationary pressures on contract renewal for
market data further driving increases.
Depreciation and amortisation
costs increased 20% to £17.7 million reflecting investments made in
new software, amortisation of assets relating to the acquisition of
Small Exchange and accelerated amortisation on internally developed
assets.
Legal and professional fees were
£14.2 million, an increase of 23%, reflecting higher costs in
relation to strategic and operational projects and costs for
ongoing litigation.
Other costs which include staff
related costs such as travel and entertainment, regulatory fees and
irrecoverable VAT, increased by 17% to £25.7 million.
Variable remuneration of £25.1
million includes the general bonus accrual, share schemes and sales
bonuses. The charge for the general bonus pool was £11.2 million,
down 9%. The lower charge reflects the Group's performance against
internal targets relative to the comparative period, offset by
increases due to headcount growth and salary inflation. Share
schemes costs, which relate to long-term incentive plans for senior
management, increased by 16% to £10.9 million (H1 FY23: £9.4
million) including a one-off acceleration of charges for the
outgoing CEO's share awards. Sales bonuses increased by 17% to £3.0
million.
Net finance income
Net finance income in the period
was £15.4 million, up from £2.4 million in H1 FY23. Within this,
finance income was £26.1 million (H1 FY23: £10.5 million), offset
by finance costs of £10.7 million (H1 FY23: £8.1 million). Group
finance costs are fixed, however finance income, which reflects the
interest earned on corporate balances including client funds on
balance sheet, benefitted from higher interest rates.
Taxation
The forecast full year effective
tax rate (ETR) applied to the Group's H1 FY24 profit was 24.8% (H1
FY23: 18.9%). The ETR is higher due to the increase in UK
corporation tax rate from 19% to 25% in April 2023. The ETR is
dependent on a mix of factors including taxable profit by
geography, tax rates levied in those geographies and the
availability and use of tax incentives and tax losses.
Earnings Per Share
Adjusted basic EPS was 22% lower
than H1 FY23. This reduction in EPS is due to lower profit after
tax, offset by a reduction in the number of shares following the
ongoing share buyback.
£m
(unless stated)
|
H1 FY24
|
H1 FY24
adjusted
|
H1 FY23
|
H1 FY23
adjusted
|
Change %
|
Adjusted change
%
|
Profit before tax from continuing
operations
|
176.4
|
205.7
|
240.5
|
260.7
|
(27%)
|
(21%)
|
Tax expense
|
(43.7)
|
(50.9)
|
(45.6)
|
(49.4)
|
(4%)
|
3%
|
Profit after tax from continuing operations
|
132.7
|
154.8
|
194.9
|
211.3
|
(32%)
|
(27%)
|
Loss after tax from discontinued
operations
|
-
|
-
|
(0.2)
|
(0.2)
|
(100%)
|
(100%)
|
Profit after tax for the period
|
132.7
|
154.8
|
194.7
|
211.1
|
(32%)
|
(27%)
|
Weighted average number of shares
for the
calculation of EPS
(millions)
|
397.6
|
397.6
|
425.0
|
425.0
|
(6%)
|
(6%)
|
Basic earnings per share (pence per share)
|
33.4
|
38.9
|
45.8
|
49.7
|
(27%)
|
(22%)
|
Dividend
The proposed interim dividend for
FY24 of 13.56 pence per share, totalling approximately £52.1
million, was approved by the Board on 24 January 2024. This
dividend will be paid on 1 March 2024 to those members on the
register at the close of business on 2 February 2024.
Summary Group Balance Sheet
The balance sheet is presented on
a management basis which reflects the Group's use of alternative
performance measures to monitor its financial position, with
particular focus on own funds and liquid assets which provide a
broader and more stable view of the Group's balance sheet than
cash. These alternative performance measures are reconciled to the
corresponding statutory measures in the appendix.
£m
|
30 Nov
2023
|
31 May
2023
|
Change %
|
Goodwill
|
603.7
|
611.0
|
(1%)
|
Intangible assets
|
252.2
|
276.5
|
(9%)
|
Property, plant and
equipment1
|
19.7
|
17.6
|
12%
|
Operating lease net
liabilities
|
(2.7)
|
(2.2)
|
23%
|
Other investments
|
1.2
|
1.2
|
-
|
Investments in
associates
|
10.9
|
12.5
|
(13%)
|
Fixed assets
|
885.0
|
916.6
|
(3%)
|
Own cash
|
530.9
|
730.2
|
(27%)
|
Issued debt
|
(299.4)
|
(299.3)
|
-
|
Client funds held on balance
sheet
|
(410.2)
|
(420.4)
|
(2%)
|
Turbo warrants
|
(4.3)
|
(2.7)
|
59%
|
Net amounts due from
brokers
|
903.9
|
825.3
|
10%
|
Own funds in client
money
|
45.9
|
75.1
|
(39%)
|
Financial investments
|
223.2
|
234.1
|
(5%)
|
Liquid asset threshold
requirement
|
46.2
|
65.0
|
(29%)
|
Own funds
|
1,036.2
|
1,207.3
|
(14%)
|
Working capital
|
(46.4)
|
(74.4)
|
(38%)
|
Net tax receivable
|
18.2
|
2.7
|
574%
|
Net deferred income tax
liability
|
(31.5)
|
(37.6)
|
(16%)
|
Net assets
|
1,861.5
|
2,014.6
|
(8%)
|
1 Excludes right-of-use assets
The majority of the Group's fixed
assets are held in US dollars, including goodwill of £501.9 million
attributed to the tastytrade business. As a result, the Group has
recognised a £31.6 million decrease in fixed assets during the
period, predominantly driven by amortisation and foreign exchange
movements.
Liquidity
The Group maintains a strong
liquidity position, ensuring that it has sufficient liquidity under
both normal circumstances and stressed conditions to meet its
liquidity requirements, which include broker margin requirements,
the regulatory and working capital needs of its subsidiaries, and
funding of adequate buffers in segregated client money
accounts.
The Group's available liquidity
comprises assets available at short notice to meet additional
liquidity requirements, which are typically increases in broker
margin.
£m
|
30 Nov
2023
|
31 May
2023
|
Change %
|
Own cash
|
530.9
|
730.2
|
(27%)
|
Net amounts due from
brokers
|
903.9
|
825.3
|
10%
|
Own funds in client
money
|
45.9
|
75.1
|
(39%)
|
Financial investments
|
223.2
|
234.1
|
(5%)
|
Liquid asset threshold
requirement
|
46.2
|
65.0
|
(29%)
|
Liquid assets
|
1,750.1
|
1,929.7
|
(9%)
|
Broker margin
requirement
|
(722.1)
|
(678.2)
|
6%
|
Cash balances in non-UK
subsidiaries
|
(390.9)
|
(383.5)
|
2%
|
Own funds in client
money
|
(45.9)
|
(75.1)
|
(39%)
|
Available liquidity
|
591.2
|
792.9
|
(25%)
|
Of which:
|
|
|
|
Held to meet regulatory liquidity
requirements
|
46.2
|
65.0
|
(29%)
|
Dividend due
|
52.1
|
130.6
|
(60%)
|
The Group's liquid assets have
reduced since 31 May 2023, driven by a reduction in cash following
dividends paid and the ongoing share buyback. Dividend payments of
£126.7 million and payments in relation to the share buyback
of £149.7 million, exceeded net cash flows
generated from operating activities of £72.9 million.
Net amounts due from brokers
increased by £78.6 million. The balance comprises open derivative
positions, cash, UK Government securities and cryptocurrency assets
held on account by the Group's hedging and execution
counterparties. The maximum margin requirement during the period
was £756.6 million in November 2023, marginally lower than the
Group's peak broker margin requirement of £757.5 million in
FY23.
The Group's available liquidity
reduced by £201.7 million during the period, which is greater than
the overall fall in liquid assets of £179.6 million. This was
predominantly driven by an increase in broker margin requirements
and additional funds being held in non-UK subsidiaries.
The Group regularly repatriates
cash from its overseas subsidiaries, and for liquidity management
and planning purposes the Group excludes cash held by non-UK
subsidiaries from available liquidity. The amount of cash held in
entities outside the UK was £390.9 million as at 30 November 2023
(31 May 2023: £383.5 million).
The Group's available liquidity is
subject to meeting regulatory liquidity requirements. These
requirements can be met with both cash and certain financial
investments. As at 30 November 2023, the requirement was £46.2
million, 29% lower than 31 May 2023.
In addition to the cash recognised
on the balance sheet, as at 30 November
2023, the Group held £2,131.9 million (31 May 2023: £2,303.9
million) of client money in segregated bank accounts, which is not
recognised on the Group's balance sheet. These client funds are
held separately from the Group's own cash balances and are excluded
from the Group's liquid assets.
Own Funds
The Group measures the strength of
its liquidity position using an 'own funds' measure, as it is a
broader and more stable measure than cash. Own funds include liquid
assets, less issued debt, turbo warrants and client funds on
balance sheet. As at 30 November 2023, the Group had own cash of
£530.9 million (31 May 2023: £730.2 million) compared with an own
funds balance of £1,036.2 million (31 May 2023: £1,207.3 million).
Own funds reduced in the period due to the fall in liquid
assets.
£m
|
30 Nov
2023
|
31 May
2023
|
Change %
|
Liquid assets
|
1,750.1
|
1,929.7
|
(9%)
|
Client funds on balance
sheet
|
(410.2)
|
(420.4)
|
(2%)
|
Turbo warrants
|
(4.3)
|
(2.7)
|
59%
|
Issued debt
|
(299.4)
|
(299.3)
|
-
|
Own funds
|
1,036.2
|
1,207.3
|
(14%)
|
Client funds on balance sheet are
funds on deposit with the Group's Swiss banking subsidiary, IG Bank
SA, and client funds held by other subsidiaries which are not
subject to the same legal or regulatory protections as client money
held off balance sheet, including funds under title transfer
arrangements.
The Group has a £375.0 million
revolving credit facility, which increased following an accordion
to the existing revolving credit facility signed during H1 FY24.
The credit facility matures in October 2026. The Group has the
option to request an increase in the revolving credit facility size
to £400.0 million, subject to borrower
request and lender consent.
Own Funds Flow
£m
|
H1 FY24
|
H1 FY23
|
Own funds generated from operations
|
183.8
|
232.2
|
As a percentage of operating
profit
|
113%
|
97%
|
Income taxes paid
|
(66.4)
|
(65.6)
|
Net own funds generated from operations
|
117.4
|
166.6
|
Net interest and fees
received/(paid)
|
13.1
|
(3.6)
|
Capital expenditure and capitalised
development costs
|
(10.8)
|
(10.5)
|
Purchase of own shares held in
employee benefit trust
|
(13.3)
|
(14.6)
|
Net cash flow on acquisition of
subsidiaries
|
-
|
3.2
|
Net proceeds from disposal of
subsidiaries
|
-
|
1.0
|
Pre-dividend and share buyback increase in own
funds
|
106.4
|
142.1
|
Payments made for share
buyback
|
(149.7)
|
(113.9)
|
Equity dividends paid to owners of
the parent
|
(126.7)
|
(133.2)
|
Decrease in own funds
|
(170.0)
|
(105.0)
|
|
|
|
Own funds at the start of the period
|
1,207.3
|
1,253.8
|
Decrease in own funds
|
(170.0)
|
(105.0)
|
Impact of movement in foreign
exchange rates
|
(1.1)
|
1.5
|
Own funds at the end of the period
|
1,036.2
|
1,150.3
|
Own funds in the period decreased
by £171.1 million. This was predominantly a result of shares bought
back during H1 FY24 of £149.7 million and dividends paid of £126.7
million exceeding net own funds generated from operations of £117.4
million.
The Group's own funds generated
from operations of £183.8 million was £48.4 million lower than own
funds generated from operations in H1 FY23. The primary driver of
this decrease is operating profit falling by £76.5 million, which
is offset by changes in fair value movement of UK Government
securities of £16.5 million, a higher share-based payment charge by
£4.0 million, and differences in adjustments for working capital
movements of £3.5 million.
Net own funds generated from
operations in H1 FY24 was further reduced by £66.4 million of
income taxes paid, of which £1.4 million related to FY23 profits
and the remaining £65.0 million was advance tax payments for
FY24.
Regulatory Capital
The Group is supervised on a
consolidated basis by the UK's Financial Conduct Authority (FCA),
which requires it to hold sufficient regulatory capital at both
Group and individual entity levels to cover risk exposures, valued
according to applicable rules and our internal assessment of
risks.
The Group's regulatory capital
resources, which totalled £831.6 million at 30 November 2023 (31
May 2023: £996.3 million) are an adjusted measure of shareholders'
funds. Shareholders' funds comprise share capital, share premium,
retained earnings and other reserves.
The Group's regulatory capital
requirement as at 30 November 2023 was £289.8 million (31 May 2023:
£497.4 million). The Group's capital headroom, once interim profits
have been approved for use by the FCA, will be £541.8 million (31
May 2023: £498.9 million), demonstrating the Group's solid capital
base. The drop in regulatory capital requirement from May 2023 was
due to the completion of the Supervisory Review and Evaluation
Process.
£m
|
30 Nov
2023
|
31 May
2023
|
Shareholders' funds
|
1,861.5
|
2,014.6
|
Less foreseeable / declared
dividends
|
(66.4)
|
(127.6)
|
Less remaining share
buyback
|
(122.4)
|
(22.5)
|
Less goodwill and intangible
assets
|
(805.2)
|
(829.9)
|
Less deferred tax assets
|
(22.4)
|
(23.2)
|
Less significant investments in
financial sector entities
|
(12.1)
|
(13.7)
|
Less value adjustment for prudent
valuation
|
(1.4)
|
(1.4)
|
Regulatory capital resources
|
831.6
|
996.3
|
Total requirement
|
289.8
|
497.4
|
Capital headroom
|
541.8
|
498.9
|
Principal risks and uncertainties
IG's Risk Taxonomy categorises the
principal risks faced by the Group into four areas: the risks
inherent in the regulatory environment, commercial risk, business
model risk, and conduct and operational risk.
The principal risks and
uncertainties which could impact the Group for the remainder of the
current
financial year remain consistent
with those detailed on pages 48 to 53 of the FY23 Group Annual
Report,
which is available on the Group's
website. There have been no significant changes in the Group's risk
management framework in H1 FY24 and up to the date of this
announcement.
Notes to the Consolidated Interim Condensed Financial
Statements
for the six months ended 30 November 2023
(unaudited)
1. General Information and basis
of preparation
General Information
The Consolidated Interim Condensed
Financial Statements of IG Group Holdings plc and its subsidiaries
(together 'the Group') for the six months ended 30 November 2023
were authorised for issue by the Board on 24 January 2024. IG Group
Holdings plc is a public company limited by shares, which is listed
on the London Stock Exchange and incorporated and domiciled in
England and Wales. The address of the registered office is Cannon
Bridge House, 25 Dowgate Hill, London, EC4R 2YA.
The interim financial information
for the six months ended 30 November 2023, together with the
comparative information contained in this report, does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. The interim financial information is
unaudited but has been reviewed by the Group's auditors,
PricewaterhouseCoopers LLP, and their report is included at the end
of these Consolidated Interim Condensed Financial Statements. The
Financial Statements for the year ended 31 May 2023 (FY23 Financial
Statements) have been audited and reported on by the Group's
auditors and delivered to the Registrar of Companies. The auditors'
report on the FY23 Financial Statements was unqualified, did not
include a reference to any matters to which they drew attention by
way of emphasis without qualifying its report and did not contain a
statement under section 498(2) or (3) of the Companies Act
2006.
Basis of preparation
The Consolidated Interim Condensed
Financial Statements for the six months ended 30 November 2023 have
been prepared in accordance with the Disclosure Guidance and
Transparency Rules (DTR) sourcebook of the UK's Financial Conduct
Authority and in accordance with UK-adopted International
Accounting Standard 34 - Interim Financial Reporting. The
Consolidated Interim Condensed Financial Statements are presented
in Sterling.
The Consolidated Interim Condensed
Financial Statements do not include all the information and
disclosures required in the FY23 Financial Statements and should be
read in conjunction with the Group's Annual Report for the year
ended 31 May 2023 (FY23 Annual Report) which has been prepared in
accordance with the UK-adopted International Accounting Standards
in conformity with applicable legal requirements of the Companies
Act 2006.
Throughout this report, FY24, FY23
and FY22 refer to the financial years ending 31 May 2024, 31 May
2023, and 31 May 2022 respectively. H1 FY24, H1 FY23 and H1 FY22
refer to the six months ended 30 November 2023, 30 November 2022,
and 30 November 2021 respectively.
Reclassification of comparatives
Interest income on client funds of
£71.2 million (H1 FY23: £24.9 million) and interest expense on
client funds of £1.0 million (H1 FY23: £0.7 million) have been
presented as separate line items in the Consolidated Interim
Statement of Cash Flows.
2. Material accounting
policies
The accounting policies adopted in
the preparation of the Consolidated Interim Condensed Financial
Statements are consistent with those followed in the preparation of
the FY23 Financial Statements.
New accounting standards and interpretations
There were no new standards,
amendments or interpretations issued during the period which have
had a material impact on the Group, other than those outlined in
the paragraph below. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet
effective.
The IASB has published a number of
minor amendments to IFRSs that are effective for periods beginning
on or after 1 January 2024. These include amendments published to
IAS 7 - Statement of Cash Flows, IFRS 7 - Financial Instrument
Disclosures, IFRS 16 - Leases and IAS 1 - Presentation of Financial
Statements. The Group has assessed the impact of these amendments
and has determined there to be insignificant impact on the
Consolidated Interim Condensed Financial Statements of the
Group.
On 20 June 2023, Finance (No.2) Act
2023 was substantively enacted in the UK, introducing a global
minimum effective tax rate of 15%. The legislation implements a
domestic top-up tax and a multinational top-up tax, effective for
accounting periods starting on or after 31 December 2023. The Group
has applied the exemption, under the amendment to IAS 12, to
recognising and disclosing information about deferred tax assets
and liabilities related to top-up income taxes.
Critical accounting estimates and
judgements
The preparation of interim
financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the amounts reported for assets and liabilities as at
the reporting date, and the amounts reported for revenue and
expenses during the period. The nature of judgements and estimates
means that actual outcomes could differ from those
estimates.
In the Directors' opinion, there
are no accounting estimates or judgments that have a material
impact on the presentation or measurement of items recorded in the
Consolidated Interim Condensed Financial Statements, except for the
judgement below.
Assessment of impairment indicators of the US Cash Generating
Unit (CGU) - A review has been
performed to consider whether indicators of impairment are present
as at 30 November 2023 for the US CGU, taking into account both
internal and external factors which are outlined in note 8. The
Group disclosed a critical accounting estimate relating to the
recoverable amount of the US CGU and concluded that the recoverable
amount is sensitive to reasonably possible change to assumptions in
the FY23 Financial Statements. The judgement that there were no
impairment indicators present means that no formal impairment test
has been performed.
2. Material accounting policies
(continued)
Going concern basis of accounting
The Directors have prepared the
Consolidated Interim Condensed Financial Statements on a going
concern basis which requires the Directors to have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for a period of at least 12 months from the
date of approval of the Consolidated Interim Condensed Financial
Statements.
The Group meets its day-to-day
working capital requirements through its available liquid assets
and debt facilities. The Group's liquid assets exclude all monies
held in segregated client money accounts. In assessing whether it
is appropriate to adopt the going concern basis in preparing the
Consolidated Interim Condensed Financial Statements, the Directors
have considered the resilience of the Group, taking account of its
liquidity position and cash generation, the adequacy of capital
resources, the availability of external credit facilities and the
associated financial covenants, and stress-testing of liquidity and
capital adequacy that considers the principal risks faced by the
business. The principal risks and uncertainties which may affect
the Group in the second half of the financial year remain
consistent with those disclosed in the FY23 Annual
Report.
The Directors' assessment has
considered future performance, solvency, and liquidity over a
period of at least 12 months from the date of approval of the
Consolidated Interim Condensed Financial Statements. The Board,
following the review by the Audit Committee, has a reasonable
expectation that the Group has adequate resources for that period,
and confirms that they consider it appropriate to adopt the going
concern basis in preparing the Consolidated Interim Condensed
Financial Statements.
Seasonality of operations
The Directors consider that there
is no predictable seasonality to the Group's operations.
Other matters
Sponsorship agreement
In H1 FY24, the Group entered into
a sponsorship agreement which awards it with the naming rights of a
public events space. A portion of the costs related to this
agreement meets the criteria for recognition as a lease under IFRS
16 - Leases. The right of use asset and the corresponding lease
liability will be recognised on commencement of the lease, which is
expected in 2025.
3. Segmental
analysis
The Executive Directors are the
Group's Chief Operating Decision Maker (CODM). Management has
determined the reportable segments based on the information
reviewed by the CODM for the purposes of allocating resources and
assessing performance.
The Group manages market risk and a
number of other activities on a Group-wide portfolio basis and
accordingly a large proportion of costs are incurred centrally.
These central costs are not allocated to individual segments for
decision-making purposes for the CODM, and, accordingly, these
costs have not been allocated to segments. Additionally, the
Group's assets and liabilities are not allocated to individual
segments and are not reported as such for decision making purposes
to the CODM. Therefore, the segmental analysis does not include a
measure of profitability, nor a complete segmented balance sheet,
as this would not reflect the information which is received by the
CODM on a regular basis.
The CODM are presented a view of
total revenue split by product. Total revenue is an alternative
performance measure which comprises net trading revenue and net
interest on client funds. In the prior period, the CODM were
presented with a view of net trading revenue split by product. This
change is due to net interest on client funds being a more material
source of revenue for the period ended 30 November 2023. The
presentation for prior period comparatives has been updated to
reflect this.
Net trading revenue represents
trading revenue that the Group generates from client trading
activity after deducting introducing partner commissions. Net
interest on client funds represents interest earned on segregated
client money balances after deducting interest paid in relation to
the same balances. These two balances collectively make up total
revenue earned for the Group. The CODM uses total revenue as the
primary measure of performance of the various segments of the
Group. The CODM considers business performance from a product
perspective, split into OTC derivatives, exchange traded
derivatives, stock trading and investments and net interest on
client funds. The products shown in the segmental analysis are
aggregated where these products are economically similar in
nature.
3. Segmental analysis
(continued)
The segmental breakdown of total
revenue is as follows:
Total revenue by product:
|
Unaudited
six
months ended
30
November 2023
|
Unaudited
six
months ended
30
November 2022
|
|
£m
|
£m
|
OTC derivatives
|
327.7
|
416.5
|
Exchange traded
derivatives
|
63.6
|
67.1
|
Stock trading and
investments
|
11.1
|
11.3
|
Net trading revenue
|
402.4
|
494.9
|
Net interest on client
funds
|
70.2
|
24.2
|
Total revenue
|
472.6
|
519.1
|
The CODM also considers business
performance from a geographical location. This geographical split
reflects the location of the office that manages the underlying
client relationship.
|
Unaudited
six
months ended
30
November 2023
|
Unaudited
six
months ended
30
November 2022
|
|
£m
|
£m
|
Segmental revenue by
geography
|
|
|
UK
|
132.7
|
169.3
|
Japan
|
38.9
|
55.8
|
Australia
|
43.6
|
51.9
|
Singapore
|
35.1
|
37.0
|
EMEA Non-EU
|
21.3
|
28.9
|
Emerging markets
|
17.9
|
21.9
|
UK, APAC & Emerging markets
|
289.5
|
364.8
|
US
|
65.7
|
72.6
|
EU
|
47.2
|
57.5
|
Net trading revenue
|
402.4
|
494.9
|
Net interest on client funds -
US
|
37.3
|
16.9
|
Net interest on client funds -
Other
|
32.9
|
7.3
|
Total revenue
|
472.6
|
519.1
|
The Group does not derive more than
10% of revenue from any one single client.
The segmental breakdown of
non-current assets excluding financial investments, other
investments and deferred income tax assets, based on geographical
location is as follows:
|
Unaudited
six
months ended
30
November 2023
|
Unaudited
six
months ended
30
November 2022
|
|
£m
|
£m
|
US
|
740.6
|
815.5
|
UK
|
147.7
|
133.8
|
EU
|
6.8
|
5.5
|
EMEA Non-EU
|
5.6
|
6.5
|
Australia
|
2.5
|
0.6
|
Japan
|
1.3
|
2.9
|
Singapore
|
1.1
|
0.6
|
Emerging markets
|
0.1
|
0.1
|
Total non-current assets
|
905.7
|
965.5
|
4. Operating
costs
|
Unaudited
six
months ended
30
November 2023
|
Unaudited
six
months ended
30
November 2022
|
|
£m
|
£m
|
Fixed remuneration
|
109.1
|
96.3
|
Variable remuneration
|
27.7
|
27.3
|
Employee related expenses
|
136.8
|
123.6
|
Advertising and
marketing
|
43.8
|
43.6
|
Premises-related costs
|
6.0
|
5.2
|
IT, market data and
communications
|
27.2
|
26.2
|
Trading related costs
|
17.0
|
20.3
|
Legal and professional
costs
|
15.4
|
11.6
|
Regulatory fees
|
(0.7)
|
0.4
|
Depreciation and
amortisation
|
32.9
|
30.2
|
Other costs
|
21.5
|
17.7
|
Total operating costs from continuing
operations
|
299.9
|
278.8
|
Total operating costs from discontinued
operations
|
-
|
0.2
|
The Group announced measures to
simplify and streamline operations on 31 October 2023, which
included operational improvements and a reduction in headcount. At
30 November 2023, the Group has recognised a provision for
redundancy compensation of £6.8 million on the balance sheet, with
£7.9 million recognised as part of fixed remuneration
costs.
5. Tax expense
The tax expense of £43.7 million
(H1 FY23: £45.6 million) is recognised based on management's
estimate of the effective tax rate for the full year of 24.8% (H1
FY23: 18.9%), applied to profits generated from continuing
operations. The actual effective tax rate for FY23 was 20.0%. The
factors affecting the tax charge in future periods are detailed on
page 152 of the FY23 Annual Report.
6. Earnings per ordinary
share
Basic earnings per ordinary share
is calculated by dividing the profit for the period attributable to
ordinary equity holders of the parent by the weighted average
number of ordinary shares in issue during the period, excluding
shares held as own shares in the Group's employee benefit trusts.
Diluted earnings per ordinary share is calculated using the same
profit figure as that used in basic earnings per ordinary share and
by adjusting the weighted average number of ordinary shares
assuming the vesting of all outstanding share scheme
awards.
Weighted average number of ordinary
shares
|
Unaudited
30
November 2023
|
Unaudited
30
November 2022
|
|
|
|
Basic
|
397,611,659
|
425,002,160
|
Dilutive effect of share-based
payments
|
3,740,573
|
3,109,996
|
Diluted
|
401,352,232
|
428,112,156
|
|
Unaudited
six
months ended
30 November 2023
|
Unaudited
six
months ended
30 November 2022
|
|
|
|
Basic earnings per ordinary
share
|
|
|
Attributable to continuing
operations
|
33.4p
|
45.8p
|
Attributable to discontinued
operations
|
0.0p
|
0.0p
|
6. Earnings per ordinary share
(continued)
|
Unaudited
six
months ended
30 November 2023
|
Unaudited
six
months ended
30 November 2022
|
|
|
|
Diluted earnings per ordinary
share
|
|
|
Attributable to continuing
operations
|
33.1p
|
45.5p
|
Attributable to discontinued
operations
|
0.0p
|
0.0p
|
7. Dividends paid and
proposed
|
Unaudited
six
months ended
30
November 2023
|
Unaudited
six
months ended
30
November 2022
|
|
£m
|
£m
|
Final dividend for FY23 of 31.94
pence per share (FY22: 31.24 pence per share)
|
126.7
|
133.2
|
The proposed interim dividend for
FY24 of 13.56 pence per share, totalling approximately £52.1
million, was approved by the Board on 24
January 2024 and has not been included as
a liability as at 30 November 2023. This dividend will be paid on 1
March 2024 to those members on the register at the close of
business on 2 February 2024.
8. Goodwill
Goodwill has been allocated to
CGUs as follows:
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
US
|
501.9
|
509.2
|
525.4
|
UK
|
100.9
|
100.9
|
100.9
|
South Africa
|
0.8
|
0.8
|
0.8
|
Australia
|
0.1
|
0.1
|
0.1
|
|
603.7
|
611.0
|
627.2
|
The movement in the goodwill
balance is attributable to foreign exchange movements. For the
allocated goodwill, there are no accumulated impairment losses
recognised as at 30 November 2023.
Goodwill
arose as follows:
· US -
from the acquisition of tastytrade on 28 June 2021.
· UK - from the reorganisation of the UK
business on 5 September 2003.
· South
Africa - from the acquisition of Ideal CFDs on 1 September
2010.
· Australia - from the acquisition of the non-controlling
interest in IG Australia Pty Limited in the year ended 31 May
2006.
The Group performs a full goodwill
impairment assessment for its annual financial statements and when
circumstances indicate that the carrying values may be impaired.
The Group's full impairment assessment carried out for the FY23
Financial Statements was based on value-in-use calculations. The
key assumptions used to determine the value-in-use for the
different cash generating units (CGUs) are disclosed in the FY23
Financial Statements.
An assessment of both qualitative
and quantitative factors has been performed to identify whether any
indicators of impairment are present as at 30 November 2023. Having
performed this assessment, management has concluded that there is
no indication that the goodwill may be impaired for any of the
Group's CGUs, as the factors considered do not currently indicate a
long-term deterioration of the businesses and profitability.
Management will perform an annual impairment test, incorporating
cash flow projections based on the annual budgets approved by the
Board, for the FY24 Financial Statements.
US CGU:
The Group's largest goodwill
balance is associated with the US CGU. Given the judgement involved
(refer to note 2) in determining whether there are any indicators
of impairment, further details on the assessment of qualitative and
quantitative factors are provided below.
Performance of the US CGU:
During the period, the US CGU
demonstrated continued growth with H1 FY24 performance in relation
to new client acquisition, net trading revenue and client interest
income being higher than H1 FY23. The CGU also increased market
share in the period from 1 June 2023 to 30 November 2023. CGU
performance was behind budget, although not by a significant
amount. This was due to reduced market volatility, which impacted
client acquisition and net trading revenue. Management do not
consider the performance against budget to be an indicator of
impairment considering the growth in performance against the prior
comparative period and the increase in market share during the
period.
8. Goodwill
(continued)
Interest rate movement:
Interest rate movements impact both
the discount rate and future cash flows. The discount rate used to
calculate the recoverable amount of the US CGU in FY23 is a
post-tax weighted average cost of capital (WACC) which is specific
to the US geographical region. The discount rate depends on the
current market assessment of the time value of money, determined by
external market information such as interest rates. Future
cashflows include interest from client funds, which can increase as
a result of higher interest rates. Management have determined that
the higher interest rate as at 30 November 2023 does not represent
an indicator of impairment, having considered the impact of
increased interest rates on both the future cash flows and the
discount rate.
Other factors:
Management have considered other
factors including changes to the regulatory environment and
observable decline in assets such as technology as part of the
assessment. No indicator of impairment has been identified.
9. Intangible
assets
|
Customer
relationships
|
Trade
names
|
Non-compete arrangements
|
Internally developed software
|
Domain
names
|
Software
and licences
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Net book values
|
|
|
|
|
|
|
|
30 November 2022 -
(unaudited)
|
161.0
|
59.2
|
23.7
|
27.6
|
13.2
|
3.3
|
288.0
|
31 May 2023
|
147.1
|
55.2
|
19.7
|
34.8
|
11.0
|
8.7
|
276.5
|
30 November 2023 -
(unaudited)
|
135.8
|
52.3
|
16.3
|
31.1
|
9.4
|
7.3
|
252.2
|
The Group has performed a review of
intangible assets as at 30 November 2023 and concluded that there
are no indicators of impairment.
The movements in the carrying
values of customer relationships, trade names, non-compete
arrangements and domain names in the period are attributable to
accumulated amortisation and foreign exchange movements. The
movements in carrying value of the remaining assets in the period
are attributable to additions, disposals, accumulated amortisation
and foreign exchange movements.
10. Financial
investments
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
Split as:
|
|
|
|
Non-current portion
|
477.1
|
379.6
|
474.6
|
Current portion
|
138.4
|
226.8
|
145.4
|
|
615.5
|
606.4
|
620.0
|
The Group's financial investments
are UK Government securities. The Group held £392.3 million UK
Government securities as at 30 November 2023 (31 May 2023: £372.3
million and 30 November 2022: £361.9 million) to satisfy margin
requirements.
As at 30 November 2023, the Group
held £36.3 million (31 May 2023: £35.0 million and 30 November
2022: £32.7 million) of financial assets as collateral to meet the
initial margin requirements of certain brokers. These assets are
held to satisfy the requirements of Uncleared Margin Rules ("UMR")
and they are not recognised on balance sheet.
11. Cash and cash
equivalents
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
Cash at bank
|
472.0
|
627.4
|
631.8
|
Money market funds
|
114.7
|
171.1
|
227.1
|
|
586.7
|
798.5
|
858.9
|
Segregated client funds are held in
segregated client money accounts which restrict the Group's ability
to control the monies and are therefore held off-balance sheet. The
amount of segregated client funds held at 30 November 2023 was
£2,131.9 million (31 May 2023: £2,303.9 million; 30 November 2022:
£2,449.9 million). The return received on managing segregated
client funds is included within net operating income.
The above balances reconcile to the
amount of cash and cash equivalents shown in the Consolidated
Interim Statement of Cash Flows as at the end of the period as
follows:
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
Cash and cash equivalents as per
Consolidated Interim Statement of Financial Position
|
586.7
|
798.5
|
858.9
|
Amounts due to pooling
arrangement
|
(9.6)
|
(3.3)
|
-
|
Balance as per Consolidated Interim
Statement of Cash Flows
|
577.1
|
795.2
|
858.9
|
12. Trade
receivables
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
Amounts due from brokers
|
500.1
|
486.6
|
390.4
|
Own funds in client
money
|
48.1
|
79.4
|
55.1
|
Amounts due from clients
|
8.4
|
4.4
|
3.0
|
|
556.6
|
570.4
|
448.5
|
Amounts due from brokers represent
balances with brokers and execution partners where the combination
of cash held on account and the valuation of financial derivative
open positions, or unsettled trade receivables, results in an
amount due to the Group.
Own funds in client money represent
the Group's own cash held in segregated client funds, in accordance
with the FCA CASS rules and similar rules of other regulators in
whose jurisdiction the Group operates and includes £11.3 million
(31 May 2023: £24.7 million and 30 November 2022: £5.6 million) to
be transferred to the Group on the following business
day.
Amounts due from clients arise when
a client's total funds held with the Group are insufficient to
cover any trading losses incurred by the client or when a client
utilises a trading credit limit. Amounts due from clients are
stated net of an allowance for impairment.
13. Other
assets
Other assets are cryptocurrency
assets and rights to cryptocurrency assets, which are owned and
controlled by the Group for the purpose of hedging the Group's
exposure to clients' cryptocurrency trading positions. The Group
holds rights to cryptocurrency assets on exchange and in vaults as
follows:
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
Exchange
|
1.2
|
1.5
|
0.8
|
Vaults
|
23.7
|
13.5
|
10.5
|
|
24.9
|
15.0
|
11.3
|
Other assets are measured at fair
value less costs to sell. Other assets are level 2 assets in
accordance with the fair value hierarchy set out in note 28 of the
FY23 Annual report.
14. Debt securities in
issue
The Group has issued £300.0 million
3.125% senior unsecured bonds due in 2028. The issued debt has been
initially recognised at fair value less transaction fees. As at 30
November 2023, £1.5 million unamortised arrangement fees are
recognised on the balance sheet (31 May 2023: £1.7 million and 30
November 2022: £1.8 million).
The Group also has access to a
£375.0 million revolving credit facility, which has increased by
£25.0 million as a result of an accordion to the existing revolving
credit facility being signed in H1 FY24. The Group has the option
to request an increase in the revolving credit facility size to
£400.0 million, subject to borrower request and lender consent. The
revolving credit facility will now mature in October 2026, after
the Group exercised its option in H1 FY24 to extend the maturity
for a further year.
Under the terms of the revolving
credit facility agreement, the Group is required to comply with
financial covenants covering maximum levels of leverage and debt to
equity. The Group has complied with all covenants throughout the
reporting period.
15. Trade
payables
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
|
|
|
|
UK
|
262.1
|
253.9
|
305.5
|
US
|
44.9
|
56.1
|
36.9
|
EU
|
48.7
|
55.4
|
50.3
|
EMEA Non-EU
|
44.0
|
49.0
|
53.1
|
Singapore
|
0.6
|
1.1
|
0.8
|
Japan
|
9.9
|
4.9
|
5.6
|
Total client funds
|
410.2
|
420.4
|
452.2
|
Issued turbo warrants
|
4.3
|
2.7
|
1.8
|
Amounts due to brokers
|
13.4
|
48.6
|
14.3
|
Amounts due to clients
|
3.3
|
6.3
|
18.9
|
|
431.2
|
478.0
|
487.2
|
Client funds reflects the Group's
liability for client monies which are recognised on balance sheet
in cash and cash equivalents.
Amounts due to brokers represents
balances where the value of unsettled positions, or the value of
open derivatives positions held in accounts which are not covered
by an enforceable netting agreement, results in an amount payable
by the Group.
Amounts due to clients represent
balances that will be transferred from cash and cash equivalents
into segregated client funds on the following business day in
accordance with the UK's Financial Conduct Authority CASS rules and
similar rules of other regulators in whose jurisdiction the Group
operates.
16. Share capital and share
premium
|
Number of
shares
|
Share
capital
|
Share
premium account
|
|
|
£m
|
£m
|
Allotted and fully paid:
|
|
|
|
(i) Ordinary shares (0.005p)
|
|
|
|
At 31 May 2022
|
431,574,455
|
-
|
125.8
|
Shares bought back and immediately
cancelled
|
(14,455,050)
|
-
|
-
|
At 30 November 2022
(unaudited)
|
417,119,405
|
-
|
125.8
|
|
|
|
|
At 31 May 2023
|
408,947,842
|
-
|
125.8
|
Shares bought back and immediately
cancelled
|
(22,547,134)
|
-
|
-
|
At 30 November 2023
(unaudited)
|
386,400,708
|
-
|
125.8
|
On 25 January 2023, the Board
approved a buyback of up to £50.0 million. This commenced on 1
April 2023 and completed on 26 July 2023, with the purchase and
cancellation of 3,644,714 shares made during H1 FY24.
16. Share capital and share
premium (continued)
On 19 July 2023, the Board approved
a £250.0 million buyback programme. This commenced on 2 August 2023
with a £100.0 million tranche which was completed on 30 October
2023, with the purchase and cancellation of 15,307,818 shares. A
second £150.0 million tranche began on 7 November 2023 and as at 30
November 2023, 3,656,015 shares had been bought back under this
tranche for a total consideration of £24.5 million.
As at 30 November 2023, for the
period of H1 FY24, the Group has repurchased 22,608,547 shares,
with an aggregate nominal value of £1,130, for total consideration
of £150.0 million (including related costs of £0.8 million). As at
30 November 2023 the Group had 254,506 shares repurchased but not
cancelled.
No shares were issued to satisfy
the exercise of share awards in H1 FY24.
During H1 FY24, there have been no
changes to the Group's deferred redeemable shares and redeemable
preference shares (H1 FY23: none).
17. Related party
transactions
The basis of remuneration of key
management personnel remains consistent with that disclosed in the
FY23 Annual Report. During the period there has been a change in
the composition of key management personnel. As a result, the group
has incurred one-off costs amounting to £3.4 million in the period
which are recognised as part of operating costs in note
4.
The Group has a 9.81% shareholding
and 33% voting rights in Zero Hash Holdings Limited which is
accounted for as an investment in associate on the Group's balance
sheet. Zero Hash facilitates cryptocurrency trading for clients of
tastytrade, Inc. (tastytrade). tastytrade recognised £0.1 million
revenue from Zero Hash during the period (H1 FY23: £0.1 million).
In addition to this, the Group has subleased part of its US office
to Zero Hash. The rental income generated in H1 FY24 from this
sublease is £0.1 million (H1 FY23: £0.1 million).
There were no other related party
transactions which had a material impact on the Consolidated
Interim Condensed Financial Statements.
18. Contingent liabilities and
provisions
The Group is subject to legal and
regulatory risks in a number of jurisdictions which may result in
legal claims or regulatory action against the Group. Through the
Group's ordinary course of business there are ongoing legal
proceedings and engagements with regulatory authorities. Where
possible, an estimate of the potential financial impact of these
legal proceedings is made using management's best estimate, but
where the most likely outcome cannot be determined no provision is
recognised.
The largest group of related claims
that the Group is subject to could have a financial impact of
approximately £19.9 million as at H1 FY24 (H1 FY23: £21.1 million).
There have been no significant developments during the period and
it is still not possible to determine whether any amounts will be
payable to the clients. As a result, no provision has been
recognised.
The Group received notice of a
class action served against one of its operating entities during
the financial year ended 31 May 2023. There has been no significant
development since the claim was served and it is not possible to
determine amounts that could be payable to the clients. As a
result, no provision has been recognised.
Under the terms of the agreement
with the Group's clearing broker for its operations in the US, Apex
Clearing Corporation, the Group guarantees the performance of its
customers in meeting contracted obligations. In conjunction with
the clearing broker, the Group seeks to control the risks
associated with its customer activities by requiring customers to
maintain collateral in compliance with various regulatory and
internal guidelines. Compliance with the various guidelines is
monitored daily and, pursuant to such guidelines, the customers may
be required to deposit additional collateral, or reduce positions
where necessary.
Other than the matters outlined
above, the Group does not expect there to be other contingent
liabilities that would have material adverse impact on the Group
Consolidated Interim Condensed Financial Statements. The Group had
no material provisions as at H1 FY24 and H1 FY23.
19. Financial risk
management
Financial risks arising from
financial instruments are analysed into market, credit and
liquidity risks. Details of how these risks are managed are in note
29 of the FY23 Annual Report. There has not been a material change
in the Group's financial risk management policies during the
period.
20. Net credit losses on
financial assets
The Group recognised net credit
losses of £10.5 million during the period (H1 FY23: £1.1 million).
The principal sources of credit risk to the Group's business are
from financial institutions and individual clients.
Amounts due from financial
institutions, which are stated net of an expected credit loss of
£1.2 million (31 May 2023: £1.0 million and 30 November 2022: £1.3
million), are all less than 30 days due. Amounts due from clients,
which are stated net of an expected credit loss of £26.3 million
(31 May 2023: £17.1 million and 30 November 2022: £17.6 million),
include both amounts less than and greater than 30 days past
due.
20. Net credit losses on
financial assets (continued)
Below is the reconciliation of the
Group's loss allowance:
|
Unaudited
30
November 2023
|
31 May
2023
|
Unaudited
30
November 2022
|
|
£m
|
£m
|
£m
|
At the beginning of the
period
|
18.1
|
18.6
|
18.6
|
Loss allowance for the
period:
|
|
|
|
- gross charge for the
period
|
12.7
|
5.7
|
3.8
|
- recoveries
|
(2.2)
|
(4.6)
|
(2.7)
|
- debts written off
|
(1.1)
|
(1.4)
|
(1.0)
|
Foreign exchange
|
-
|
(0.2)
|
0.2
|
At the end of the
period
|
27.5
|
18.1
|
18.9
|
21. Financial
instruments
Fair value hierarchy
Details of the financial
instruments valuation hierarchy is provided in note 28 and the
Significant Accounting Policies section in the FY23 Annual Report.
The definitions, details of the inputs and the valuation techniques
in determining the fair values of the Group's financial instruments
are shown in note 28 of the FY23 Annual Report.
There have been no changes to the
fair value hierarchy, the valuation techniques and accounting
estimates for any of the Group's financial instruments in the
period. There were no transfers between Level 1 and Level 2 fair
value measurements, and no transfers into or out of Level 3 fair
value measurements.
The hierarchy of the Group's
financial instruments carried at fair value is as
follows:
|
Level
1
|
Level
2
|
Level
3
|
Total
fair value
|
At
30 November 2023 (unaudited)
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
Cash and cash
equivalents
|
114.7
|
-
|
-
|
114.7
|
Trade receivables - amounts due
from brokers
|
(23.5)
|
(1.9)
|
-
|
(25.4)
|
Financial investments
|
615.5
|
-
|
-
|
615.5
|
Other investments
|
-
|
-
|
1.2
|
1.2
|
Financial liabilities:
|
|
|
|
|
Trade payables - amounts due to
brokers
|
-
|
(17.9)
|
-
|
(17.9)
|
Trade payables - client
funds
|
17.4
|
79.6
|
-
|
97.0
|
Trade payables - issued turbo
warrants
|
-
|
(4.3)
|
-
|
(4.3)
|
|
Level
1
|
Level
2
|
Level
3
|
Total
fair value
|
At
31 May 2023
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
Cash and cash
equivalents
|
171.1
|
-
|
-
|
171.1
|
Trade receivables - amounts due
from brokers
|
(3.2)
|
(92.4)
|
-
|
(95.6)
|
Financial investments
|
606.4
|
-
|
-
|
606.4
|
Other investments
|
-
|
-
|
1.2
|
1.2
|
Financial liabilities:
|
|
|
|
|
Trade payables - amounts due to
brokers
|
(10.4)
|
(29.1)
|
-
|
(39.5)
|
Trade payables - client
funds
|
17.3
|
99.4
|
-
|
116.7
|
Trade payables - issued turbo
warrants
|
-
|
(2.7)
|
-
|
(2.7)
|
21. Financial instruments
(continued)
Amounts due to clients of £22.2
million (31 May 2023: £28.0 million) have been reclassified from
amortised cost to fair value through profit and loss, and the fair
value levelling of these assets has been disclosed in the table
above. Accordingly, the prior period comparative balances for 31
May 2023 only have been restated to reflect this
classification.
|
Level
1
|
Level
2
|
Level
3
|
Total
fair value
|
At
30 November 2022 (unaudited)
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
Financial assets:
|
|
|
|
|
Cash and cash
equivalents
|
227.1
|
-
|
-
|
227.1
|
Trade receivables - amounts due
from brokers
|
(20.5)
|
(101.4)
|
-
|
(121.9)
|
Financial investments
|
620.0
|
-
|
-
|
620.0
|
Other investments
|
-
|
-
|
1.2
|
1.2
|
Financial liabilities:
|
|
|
|
|
Trade payables - amounts due to
brokers
|
0.5
|
1.1
|
-
|
1.6
|
Trade payables - client
funds
|
26.2
|
99.2
|
-
|
125.4
|
Trade payables - issued turbo
warrants
|
-
|
(1.8)
|
-
|
(1.8)
|
Fair value of financial assets and liabilities measured at
amortised cost
The fair value of the Group's
financial assets and liabilities measured at amortised cost
approximates their carrying amount, with the exception of debt
securities in issue.
The carrying value of the Group's
debt securities in issue as at 30 November 2023 was £297.9 million
and the fair value of the debt securities in issue was £250.2
million (31 May 2023: £228.8 million; 30 November 2022: £230.3
million).
22. Subsequent
events
During the period from 1 December
2023 to 22 January 2024, the Group repurchased 2,012,752 Ordinary
Shares with a nominal value of 0.005p for an aggregate purchase
amount of £16.3 million (including related costs of £1.3
million).
In December 2023 the Group
disposed of £161.0 million UK Government securities and the
proceeds were immediately invested in Money Market Funds. This sale
does not impact the Group's business model for the classification
of these UK Government Securities under IFRS 9 - Financial
Instruments.
There have been no other
subsequent events that have a material impact on the Consolidated
Interim Condensed Financial Statements.