IG Group FY25 results meet expectations, launches strategic review By Investing.com

IG Group reported FY2025 revenue of £1,123m and EBITDA of £531m (47.3% margin), with organic revenue £1,096m broadly in line with guidance of £1,100m and adjusted EPS up 5% to 115.3p. The board announced a new £125m buyback and a strategic review of acquisitions, disposals and listing venues; active customers rose 174% (6% ex‑Freetrade) and first trades climbed 81% to 128,800. Quarterly revenue was £274m (+2%), and management expects ~£300m for the comparable quarter in 2026 and FY26 consensus alignment of £538m EBITDA and 119.5p EPS assuming similar market conditions.

Analysis

IG Group’s strategic moves increase optionality beyond near-term trading revenue — the real lever for a re-rate is capital allocation and corporate structure (M&A, disposals, listing venue). A credible, sustained buyback + active M&A cadence can both compress free float and create a sequence of binary rerating events over 3–12 months that attract multiple expansion from yield-seeking and active-ownership investors.

Second-order competitive effects favor platforms that can scale low-cost customer acquisition and custody economics: banks and white‑label custodians see incremental clearing volumes and fee income, while legacy advisory players face margin pressure as digital-first entrants reprice distribution. The biggest operational risk is the monetization profile of newly acquired customers — if activation/ARPU lags, marketing-driven growth will become an earnings diluter rather than a franchise enhancer within 2–4 quarters.

Key catalysts and tail risks are distinguishable and timeable: near-term catalysts include milestones from the strategic review and early integration KPIs (customer retention, ARPU acceleration) over the next 6–12 months; macro drivers (market volatility and rates) can swing quarterly trading revenue sharply and are the most likely immediate reverser. Regulatory and integration execution are asymmetric tail risks — a regulatory constraint on order routing or a material integration misstep would crystallize downside quickly, while successful disposals or a secondary listing could re-rate the stock by changing investor constituency.

Key Decisions for Investors

• Long IGG.L (6–12 months): Buy on confirmation of strategic-review milestones (board-appointed advisors, clear divestment or listing roadmap). Position size 2–3% of portfolio, target 20–30% upside from rerating + buyback effects, stop-loss 12–15% if customer monetization metrics deteriorate.
• Call spread on IGG.L (9–12 month): Buy an at‑the‑money call and sell a 20–30% OTM call to fund cost. This captures upside if strategic optionality is realized while capping premium; expect 2:1 upside/downside if catalysts occur, max loss = premium paid (~small % notional).
• Relative-value pair (long IGG.L / short HL.L or CMC.L, 6–12 months): Size neutral to isolate share-gain and digital-mix thesis. Target 15–25% relative outperformance if IG converts acquired customers to higher ARPU; unwind if IG’s retention < peer median after two quarters.
• Short incumbent (HL.L or CMC.L, 3–9 months): Small tactical short against names with higher legacy reliance on advisory/fees; thesis: margin pressure and slowing retail flows. Keep tight stops (10–12%) and cap exposure at 1–2% portfolio given regulatory and macro volatility risks.