(Reuters) - IG Group Holdings Plc (L:IGG) reported a 17 percent slump in first-half profit on Tuesday and reiterated a drop in full-year revenue, as stricter regulation kept clients away from the online financial trading company's platforms.
The mid-cap company and its rivals, Plus500 Ltd (L:PLUSP) and CMC Markets (L:CMCX), have been in focus as regulators in Britain and European Union tighten rules on products that allowed anyone with a bank card to make highly-leveraged bets on financial markets via apps and online platforms.
IG Group, which provides online stockbroking and trading services to retail investors, saw a 15 percent drop in active clients in both the UK and the European Union. Total active clients edged lower by 3 percent to 147,600 in the first half.
Pretax profit fell to 113 million pounds in the six months ended Nov. 30 from 136.2 million pounds a year earlier, said IG Group, which started off as the world's first spread-betting firm in 1974 with just three employees.
"IG has experienced significant change and will continue to do so in the future. Change will be driven by regulation, by shifting patterns of wealth and by the continued development of financial markets around the world," Chief Executive Officer June Felix said.
IG Group's net trading revenue tumbled 6.5 percent to 251 million pounds.
Online trading platforms have been focusing on their professional clients as the new regulation targets retail customers. IG Group said professional clients accounted for about 69 percent of its revenue from European Securities and Markets Authority region.
However, it added that it continues to expect revenue in the current year to fall, blaming the regulation, and pointed that the "exceptional performance" in previous year's second half was driven by an interest in cryptocurrency.