Spread betters chance their arms to score IG Index £157m

World cup fever is rising and stockmarkets are seemingly ever more volatile - good news for spread betting house IG Index.

Today the granddaddy of the sector showed that the industry is booming as ever greater number of punters decide to use spread bets either to chance their arm or as part of an investment strategy.

A trading update today showed that the group expects to report revenue for the year to May of £298 million and profits of £157 million.

Both of those numbers are up sharply on the previous year, suggesting that cynics called it wrong when they claimed everyone who was likely to open a spread betting account had done so.

In the final quarter of the year 21,500 accounts were opened, typically by the professional and managerial classes in the South-East.

Chief executive Tim Howkins says: "I used to say that our typical client was a dentist. I stopped when people said we were bound to run out of dentists before long."

Those punters, dentists or otherwise, have been trading furiously through stock market turmoil.

On the day of the so-called "flash crash" last month when the Dow Jones lost 1,000 points, IG saw 55% more transactions than on its previous record day and a spike in account opening.

IG is moving its headquarters from Southwark to offices above Cannon Street station that are also home to Liffe and Winterflood Securities.

The move is going to cost £5 million, but the new place is "an infinitely nicer place to be" says Howkins. He also reckons he has secured a good rent deal at £19 a square foot for 15 years.

Howkins is playing down vague rumours that the Tories are looking to impose capital gains tax on spread betting, saying they would do better to continue collecting the betting duty IG is happy to pay. He concedes that not many clients make more profit than the £10,000 a year allowance in any case.

Market rumours about the future of the firm's sports arm extrabet.com continue to flourish. The statement today reveals that IG "made a number of changes" to the business to improve profits, including a management shake-up and a less risky approach to the odds offered on major sporting events.

It is widely assumed in the industry that IG would sell this business if it could. Howkins declined to comment.

IG shares themselves would certainly have been worth a punt over the last few weeks. Today they moved up 34.4p to 426.6p, a rise of 9%.