IG Group Holdings plc (LSE: IGG), a leading global provider of online trading services, has officially launched the second tranche of its £150 million share buyback program. In an announcement made today, the company confirmed it has appointed UBS AG London Branch to execute this next phase, which involves the repurchase of up to £75 million worth of shares.
The second tranche is scheduled to start immediately and is expected to conclude by January 31, 2025. This follows the successful completion of the first tranche, which also amounted to £75 million and was managed by Morgan Stanley & Co. International Plc. The first phase began in August 2024 and saw IG Group repurchasing a significant portion of its shares, aligning with its broader capital management strategy.
The share buyback program has been authorized under the provisions approved by shareholders during IG Group's annual general meeting, held on September 18, 2024. Under the terms of this approval, the company is authorized to repurchase up to 36,934,031 shares during the second tranche. All repurchased shares will be held in treasury, which may have an impact on the company's total share capital and potentially boost its earnings per share.
The share buyback comes on the heels of a strong financial performance by IG Group in the first quarter of the 2025 fiscal year, spanning from June to August 2024. The company reported a total revenue of £278.9 million, reflecting an impressive 15% year-over-year increase. This growth was driven by several factors, including an uptick in revenue per client and increased market volatility across various asset classes, particularly during early August.
The launch of the second tranche of IG Group’s buyback program comes at a time of heightened market volatility, which has worked in the company's favor. The increased turbulence in global markets, particularly in August 2024, led to a rise in trading activity among clients, positively impacting IG Group's revenue performance.
IG Group’s decision to continue with the buyback program underscores its confidence in its long-term growth prospects and commitment to maintaining a disciplined capital management strategy. By reducing its share count, the company is aiming to enhance its financial metrics, including earnings per share, and provide value to its shareholders.
IG Group's decision to proceed with the second tranche of its £150 million share buyback program highlights the company's robust financial health and commitment to enhancing shareholder value. With UBS AG London Branch tasked with executing the £75 million repurchase, the company is poised to continue its disciplined approach to capital management, while benefiting from strong revenue growth and favorable market conditions. Investors will be closely watching the impact of this buyback on IG Group's financial performance in the months to come.
