Results presentation Six Months Ended 30 November 2006

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Results presentation

Six Months Ended 30 November 2006

Tim Howkins, CEO Steve Clutton, Finance Director

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Introduction

Turnover up 44%

Earnings per share up 43%

All parts of business contributed to growth

Proposed interim dividend of 2.0p per share (up 33%)

Period of significant investment in infrastructure

Current trading strong

Initiatives in place to drive growth Highlights

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Profit and loss

Strong revenue and profit growth continues

Betting duty varies with client performance

Period of major investment Data centre enhancement

5.50p +33%

1.50p 2.00p

Dividend

10.88p +43%

4.33p 6.20p

Earnings per share

51.1 +45%

20.4 29.6

Profit before tax

- (0.1)

(0.0) Interest paid

2.0 0.7

1.3 Interest received

- 0.0

0.0 Exceptional items

54.9%

51.3%

50.8%

Margin (%)

49.1 +43%

19.8 28.3

EBIT

(3.5) +17%

(1.8) (2.1)

Depreciation and amortisation

58.8%

55.6%

54.5%

Margin (%)

52.6 +42%

21.4 30.4

EBITDA

(40.2) +42%

(18.0) (25.5)

Operating costs

5.0 +48%

2.1 3.1

Interest on client money

87.8 +42%

37.3 52.8

(1.6) (1.3)

(2.9) Betting duty

89.4 +44%

38.6 55.7

Turnover

£'m

2006 2005

2006

31 May 30 November

Year ending Six months ending

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Revenue by business line

All areas of business continue to deliver profitable growth

Australia revenue growth accelerated in Q2 after temporary lull following volatile markets in May/June

Sports benefits from World Cup and growth in Betting Exchange business

1. Includes betting exchange business

+44%

55,673 89,391

50,793 38,598

62,177 32,770

29,407

+21%

4,670 7,633

3,786 3,847

6,119 2,730

3,389 Spread betting

+147%

1,310 1,433

902 531

717 259

458 Fixed odds⁽¹⁾

Sports

+15%

3,098 5,196

2,495 2,701

4,950 2,409

2,541 Binaries

+39%

5,059 8,925

5,295 3,630

3,776 1,935

1,841 Australia & Singapore

+49%

41,536 66,204

38,315 27,889

46,615 25,437

21,178 UK & Europe

Financial

£'000

Growth H1

Total H2

H1 Total

H2 H1

2007 2006

2005

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Cost base

Investing for growth – New data centres – Resilience

– Headcount increase

Additional office space

Marketing in new geographies – German office

– Singapore office – Italian desk

Other overheads include – Irrecoverable VAT – Bank charges

972 683

494 1,177

Legal and professional

535 300

317 617

Recruitment

Year ending 31 May 2007 Year ending 31 May 2006

27,603 24,005

19,732 43,737

2,104 1,752

1,771 3,523

Depreciation, amortisation and disposals

25,499 22,253

17,961 40,214

Total operating costs

2,255 1,461

1,833 3,294

Other overheads

734 628

565 1,193

IT maintenance and support

768 844

557 1,401

Bad and doubtful debts

1,266 1,045

844 1,889

Market data

1,081 793

812 1,605

Rent and premises cost

3,328 2,037

1,284 3,321

Advertising and marketing

911 1,069

627 1,696

LTIP and SIP

3,709 5,574

3,121 8,695

Bonuses

9,940 7,819

7,507 15,326

Salaries

£'000

H1 H2

H1 FY

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UK - financial

Strong account opening continues

Client recognition of IG as UK leader

Increasing levels of introduced CFD business

Strong growth in both spread betting and CFDs

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000

Jun-04 Jul-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06

UK CFD

UK financial spread betting

Number of client transactions¹

1 Includes closes, stops and rolls

Strong growth continues

CAGR: 55%

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Financial

UK spread betting client recruitment up 28% on corresponding period

Global CFD client recruitment exceeded UK spread betting in Q2

Singapore, Germany and Italy accounted for 11% of November client recruitment

Worldwide client base of market

professionals, retail clients and network of introducers

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500

Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 CFD

UK financial spread betting

Quarterly account opening Financial business becoming more balanced

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CFDs – a diverse international business

UK W estern Europe

Ireland Africa

Americas Eastern Europe Far East Middle East South Asia

IG’s London-based CFD business has clients in some 70 countries

Growth in revenues generated from clients based outside UK accelerating

Non-UK revenues of £5.4m in H1 07, 108% increase on corresponding period

UK CFD revenue by location of client Non-UK revenues growing strongly

80%

38%

83%

200%

65%

H1 07/H1 06 growth

11.0 9.0

6.1

1.1 1.1

0.8 Rest of world

2.2 1.6

1.2 Western Europe

2.1 1.3

0.7 Ireland

5.6 5.0

3.4 UK

H1 07

£'m H2 06

£'m H1 06

£'m

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Australia - Financial

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800

Jun- 02

Oct-02 Feb-

03 Jun-

03 Oct-03

Feb- 04

Jun- 04

Oct-04 Feb-

05 Jun-

05 Oct-05

Feb- 06

Jun- 06

Oct-06

Number of clients dealing - Australia (monthly)

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000

Jun-02 Oct-02

Feb-03 Jun-03

Oct-03 Feb-04

Jun-04 Oct-04

Feb-05 Jun-05

Oct-05 Feb-06

Jun-06 Oct-06

Number of transactions¹ Return to strong growth following muted Q1

1 Includes closes, stops and rolls

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Revenue per client

2Clients may deal on more than one product and hence may be counted several times

1Split of revenues between CFDs and financial spread betting is approximate as risk is managed on a unified basis 1,573

130788 916 2,197 1,255 2,185 3,446 H1 07 35,390 (5,212) 40,602 10,0905,9253,383 21,2044,031 13,993H1 073,180 55,6731,3104,6703,098 46,5955,059 30,577 10,959H1 07£'000

1,847 272779 1,051 2,035 1,720 1,942 2,822£ H1 06 20,903 (4,048) 24,9511,9514,9382,572 15,4902,110 11,222H1 062,158 38,5983,8472,701531 31,5193,630 21,798H1 066,091£'000

1,976 1,591

1,632 Overall

286 91

265

Sport fixed odds 635 473 736

Sport spread betting 1,095 972 864

Financial binaries

2,242 1,782

1,785 All financial

1,899 1,162

1,618

Australia & Singapore 1,652 1,767 2,082

UK fin. spread betting 2,804 2,327 3,509

UK CFD (inc. FX) H1 05£ H2 05£ H2 06£

Income per client

25,706 20,596

18,015

Unique accounts (4,265) (5,854) (4,935)

30,641 26,450

22,2801,730 2,833 3,154

Sport fixed odds 5,333 5,776 5,146

Sport spread betting 2,321 2,479 2,889

Financial binaries

19,452 15,362

12,896

Total Financial 1,138 1,665 2,789

UK CFD (inc. FX) H1 05 H2 05 H2 06

Number of clients ²

50,793 32,770

29,407458 259 902

Sport fixed odds 3,389 2,730 3,786

Sport spread betting 2,541 2,409 2,495

Financial binaries 23,019 27,372 43,610

Total financial 1,841 1,935 5,295

UK CFD (inc. FX) £'000 £'000 £'000

Turnover ¹ H1 05 H2 05 H2 06

Continued momentum in spread betting

Ongoing maturity of client base and mix impact of larger CFD clients

Financial income per client close to H2 06 high

Australia impacted by influx of new clients in latter part of H1 07

Overall income per client skewed by lower value Extrabet recruitment

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Risk management and quality of earnings

Volatility of income remains low

No loss making days in 2006 Income volatility remains low

Daily revenue (60 day rolling average)

Revenue volatility (60 day coefficient of variability)

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000

May-01 Nov-01

May-02 Nov-02

May-03 Nov-03

May-04 Nov-04

May-05 Nov-05

May-06 Nov-06

0.00 0.50 1.00 1.50 2.00 2.50 3.00

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Sports

Good growth over last 18 months

Spread betting revenue growth aided by soccer World Cup in June 2006

Market Making on betting exchanges has acquired scale

Fixed odds volumes growing

– A niche offering rather than mass market Profitable revenue growth and cash generative

+37%

6.1 4.3

Total revenues

+22%

0.7 0.5

Other fixed odds

0.7 -

Market making on exchanges

+21%

4.7 3.8

Spread betting

£'m

H1 07 H1 06

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TradeSense

Available to all new clients

– Six week introduction to trading – Educational materials

– Lower minimum stakes Ongoing resources

– Online education – Seminars

– Helpline

Aiming to increase – Client recruitment

– Conversion of opened accounts to trading – Client life

Initially for UK spread betting

– Extend across overseas offices if successful

Enhancing the recruitment, activation and retention of clients within our existing retail financial businesses

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IGforex.com

IG’s first step in addressing the global retail FX market

Global Retail FX an attractive growth market for IG

Regulation in large parts of the world permit FX but not CFDs

FX is now a significant component of spread betting revenues, but not yet of CFD revenues

IGforex.com an FX-only offering for retail clients

FX-specific front end using new technology

– New technology will be applied to other websites throughout 2007

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International expansion

Continuing to build Italian and German operations – Signing up introducers for German office – Seminars and investment shows

– Direct advertising

Preparing for MiFID

– Regulatory barriers are lowered from November 2007 provides opportunity

– Able to market CFDs throughout Europe

– Approach will include both local offices and cross-border from the UK

Acquisition may be a possible entry route in some countries A key focus in 2007

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Outlook

Business well positioned to deliver further growth

Continuing strong growth from UK and Australia

Singapore office provides springboard into Asia

European roll-out has begun

Confident about growth prospects

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