(Reuters) - Online trading platform IG Group Holdings (L:IGG) on Tuesday reported a slump of almost a third in its earnings for the year, hurt by Europe's clampdown on the provision of access to high-stakes financial betting to amateur traders.
The mid-cap company, which allows individuals and other non-institutional retail investors to bet on stock, currency and oil market moves, said pretax profit plummeted 31% to 194.3 million pounds for the 12 months ended May 31.
IG, like rivals Plus500 Ltd (L:PLUSP) and CMC Markets (L:CMCX), has struggled as regulators tighten rules on platforms which have allowed anyone with a bank card to make highly-leveraged bets on markets via mobile phone apps and simple online browsers.
IG Group unveiled a plan in May to battle that hit and drive growth while warning that full-year results would be impacted by low levels of financial market volatility. It reiterated that last message on Tuesday.
"Market conditions throughout FY19, and particularly in the second half of the financial year, were much less favourable overall than in FY18," the company said.
A number of major indicators of market volatility, for example euro and yen currency market options, have hit long-term lows this year. Others - including the VIX (VIX) indicator of Wall St volatility during a sell-off in May - have at times been much higher than during the same period last year.
IG, which started off as a spread-betting firm taking bets on the gold market in 1974 with just three employees, said it expects operating expenses to rise by about 30 million pounds this year due to higher promotional spending and client costs.