IG Group Holdings plc has initiated the second phase of its share buyback program, committing to repurchase up to £150 million worth of its own shares. This move follows the original announcement on 20 July 2023, outlining a comprehensive £250 million buyback plan.
IG Group Commences the Second Phase of Buyback
The financial services provider has set in motion the second tranche of its share buyback program, with the assistance of JP Morgan Securities plc. This tranche, amounting to a substantial £150 million, is set to begin on 7 November 2023, with a completion target set for no later than 31 July 2024.
The primary objective is to streamline the company's share capital, a strategy often employed by firms seeking to optimize shareholder value. The execution of this tranche will operate within the limitations of the authority granted to the IG Group's Board during the annual general meeting on 20 September 2023. Within this framework, the company has the capacity to repurchase as many as 40,452,304 shares.
The shares of the publicly listed company did not immediately react to the news. On the London Stock Exchange , they are currently trading hands at 665.5 pence, marking a slight drop of 0.23%.
As reported by Finance Magnates, the first tranche of the share buyback was executed in August and covered up to £100 million. The announcement of the new share buyback program was made a month earlier when IG Group reported its fiscal year 2023 (FY23) results. According to the report, trading revenue fell 3% to £941.8 million from £972.3 million. Subsequent reports from the end of October indicated that individual subsidiaries of IG also reported mixed results for FY23.
IG Groups’ CEO Departs, Company to Reduce 10% Staff Globally
In a recent development, IG Group has announced a significant reduction in its workforce, with plans to cut approximately 300 jobs, equating to 10% of its total workforce as reported at the end of FY23. This decision emerged from an extensive review aimed at identifying cost-efficiency opportunities within the company.
The brokerage group is positioning itself to achieve substantial cost savings. It projects a full run-rate cost savings of £50 million annually, with a phased plan of realizing £10 million in FY24, £40 million in FY25, and reaching the full £50 million in FY26.
Adding to the series of significant announcements, IG Group had previously reported in August that its Chief Executive Officer (CEO), June Felix, had resigned with immediate effect due to health concerns. Her departure from the CEO role and as a Director of the company followed a period of medical leave that began in early July. In the interim, Charlie Rozes, who serves as the Chief Financial Officer, has stepped into the CEO position.
