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IG Group Interims
Posted: January 21st, 2020, 7:09 am
by idpickering
Financial Summary
- Net trading revenue £249.9 million (H1 FY19: £251.0 million). H1 FY19 included two months of trading prior to the implementation of the ESMA product intervention measures.
- Total operating expenses £136.3 million, reflecting investment in the Group's strategic initiatives, in line with guidance (H1 FY19: £122.1 million).
- Operating profit £100.1 million (H1 FY19: £112.5 million).
- Basic EPS 22.4 pence (H1 FY19: 24.9 pence).
Dividend
An interim dividend of 12.96 pence per share, calculated as 30% of the FY19 full year dividend of 43.2 pence per share, will be paid on 27 February 2020 to those members on the register at the close of business on 31 January 2020.
https://www.investegate.co.uk/ig-group- ... 00103863A/
Re: IG Group Interims
Posted: January 21st, 2020, 7:41 am
by idpickering
Further down the above announcement;
To maintain the 43.2 pence per share annual dividend until the Group's earnings allow the Company to resume progressive dividends.
That is disappointing, as I have enough static dividend paying shares as it is. This aspect won't change my opinion of the company being a useful HYP share, and I shall continue to hold, but am unlikely to top up my holdings any time soon.
Ian.
Re: IG Group Interims
Posted: January 21st, 2020, 8:08 am
by Arborbridge
idpickering wrote:Further down the above announcement;
To maintain the 43.2 pence per share annual dividend until the Group's earnings allow the Company to resume progressive dividends.
That is disappointing, as I have enough static dividend paying shares as it is. This aspect won't change my opinion of the company being a useful HYP share, and I shall continue to hold, but am unlikely to top up my holdings any time soon.
Ian.
Yes it's disappointing, but I fear we may have to get used to this happening more often. With the tighter economic outlook and disruption which people voted for it wouldn't surprise me if we are in for a rough ride this year.
Still, I'm counting my blessings at having backed IGG for the past ten years as my dividends have increased by a factor of 3. Better to have a sensible payout ratio, than borrow money to keep up a pretence.
Arb.
Re: IG Group Interims
Posted: January 21st, 2020, 8:26 am
by OLTB
idpickering wrote:Further down the above announcement;
To maintain the 43.2 pence per share annual dividend until the Group's earnings allow the Company to resume progressive dividends.
That is disappointing, as I have enough static dividend paying shares as it is. This aspect won't change my opinion of the company being a useful HYP share, and I shall continue to hold, but am unlikely to top up my holdings any time soon.
Ian.
Hi Ian
I know how you feel and hopefully, with the predicted increase in earnings this year, a sensible progressive policy can re-start. As Arb says, prudence, dear prudence, is best in the long run.
Cheers, OLTB.
Re: IG Group Interims
Posted: January 21st, 2020, 8:27 am
by Dod101
Never held this so seem to have lost out but never fear Arb. The IMF is reported in this morning's newspaper as saying that assuming a smooth Brexit, the UK economy should grow faster than the EU this year and next. That of course is the idea so let's keep an optimistic outlook.
I am certainly not concerned. The Bank of England sees to like talking down our economy, in keeping with the natural conservatism of the institution.
Dod
Re: IG Group Interims
Posted: January 21st, 2020, 9:13 am
by Arborbridge
Dod101 wrote:Never held this so seem to have lost out but never fear Arb. The IMF is reported in this morning's newspaper as saying that assuming a smooth Brexit, the UK economy should grow faster than the EU this year and next. That of course is the idea so let's keep an optimistic outlook.
I am certainly not concerned. The Bank of England sees to like talking down our economy, in keeping with the natural conservatism of the institution.
Dod
I'm not concerned either, as I believe
HYP will carry on and make the most of it. We have always seen ups and downs but unless the whole system self-destructs, we ought still to maintain our incomes through dividends, even if we
do have a poor year.
I'd love to comment on the other parts of your message, but don't want to get drawn into being OT or highjacking the thread
Re: IG Group Interims
Posted: January 21st, 2020, 9:19 am
by blobby
Link to the interim report on IG Group website:
https://www.iggroup.com/sites/ig-group/ ... vFINAL.pdfSeems to be steady as it goes and at a 6.3% yield I remain a big fan of IGG. From a diversification point of view I have partially separated IGG from my banks, insurance, asset management holdings but suspect that they will prosper or decline with the market as a whole.
Re: IG Group Interims
Posted: January 21st, 2020, 2:06 pm
by moorfield
idpickering wrote:That is disappointing, as I have enough static dividend paying shares as it is. This aspect won't change my opinion of the company being a useful HYP share, and I shall continue to hold, but am unlikely to top up my holdings any time soon.
Flexing the interpretation of the rules perhaps, putting IGGs 5 year dividend history through Excel's
slope function I still see a rising trend. In comparison my SAN preference shares, which yield the same, show none of course. And if your overall portfolio income continues to rise year on year and is preserving its spending power - why be disappointed?
Re: IG Group Interims
Posted: January 21st, 2020, 4:16 pm
by idpickering
moorfield wrote:idpickering wrote:That is disappointing, as I have enough static dividend paying shares as it is. This aspect won't change my opinion of the company being a useful HYP share, and I shall continue to hold, but am unlikely to top up my holdings any time soon.
Flexing the interpretation of the rules perhaps, putting IGGs 5 year dividend history through Excel's
slope function I still see a rising trend. In comparison my SAN preference shares, which yield the same, show none of course. And if your overall portfolio income continues to rise year on year and is preserving its spending power - why be disappointed?
Thanks, I get where you're coming from, but obviously, a rising dividend would've been more preferable. Either way, I'm not going to lose any sleep over it. It's in my HYP as of last August, and there it'll stay.
Ian.
Re: IG Group Interims
Posted: January 21st, 2020, 4:17 pm
by Arborbridge
moorfield wrote:idpickering wrote:That is disappointing, as I have enough static dividend paying shares as it is. This aspect won't change my opinion of the company being a useful HYP share, and I shall continue to hold, but am unlikely to top up my holdings any time soon.
Flexing the interpretation of the rules perhaps, putting IGGs 5 year dividend history through Excel's
slope function I still see a rising trend. In comparison my SAN preference shares, which yield the same, show none of course. And if your overall portfolio income continues to rise year on year and is preserving its spending power - why be disappointed?
I admire the positivity, but there's no doubt that the rate of increase has slowed over ten years, and a couple of years static is certainly not a good portent.
Arb.
Re: IG Group Interims
Posted: January 21st, 2020, 8:28 pm
by SlickMongoose
The dividend doesn't look covered? They can't increase it unless trading improves, and this latest update has earnings going backwards.
Re: IG Group Interims
Posted: January 23rd, 2020, 8:42 am
by Arborbridge
SlickMongoose wrote:The dividend doesn't look covered? They can't increase it unless trading improves, and this latest update has earnings going backwards.
In the short term, certainly, but let's see what happens over the next two years. That's why they are being prudent in keeping the dividend unchanged, but we all agree this is not a good sign. EPS barely covered the dividend last year, and probably won't cover it again for the next year - so it does need watching. However, I've known this happen previously with companies which then go on to recover the situation, I'd say this is within the bounds of "normal".
When was equity investment ever without bumps and troughs?
Arb.
Re: IG Group Interims
Posted: January 23rd, 2020, 6:17 pm
by monabri
Arborbridge wrote:SlickMongoose wrote:The dividend doesn't look covered? They can't increase it unless trading improves, and this latest update has earnings going backwards.
In the short term, certainly, but let's see what happens over the next two years. That's why they are being prudent in keeping the dividend unchanged, but we all agree this is not a good sign. EPS barely covered the dividend last year, and probably won't cover it again for the next year - so it does need watching. However, I've known this happen previously with companies which then go on to recover the situation, I'd say this is within the bounds of "normal".
Arb.
Looking at the info from MorningStar we see a company operating with some quite stonking Gross and Operating margins.
http://financials.morningstar.com/ratio ... t=xlon:iggWhen looking at the ability to pay a dividend, does one look at the (1) "EPS versus Dividend" or (2) "Free Cash Flow per share versus Dividend" ?
I've always assumed that it was (2) as the free cash flow is what's left to pay a dividend/buyback shares after paying for it's operating expenses and any capital expenditures.
Re: IG Group Interims
Posted: January 23rd, 2020, 10:23 pm
by Arborbridge
monabri wrote:
When looking at the ability to pay a dividend, does one look at the (1) "EPS versus Dividend" or (2) "Free Cash Flow per share versus Dividend" ?
I've always assumed that it was (2) as the free cash flow is what's left to pay a dividend/buyback shares after paying for it's operating expenses and any capital expenditures.
Definitely free cash flow, and those figures are quite reassuring. Thanks for doing that, before I'd also got around to it