Trading platform CMC Markets is slashing its global headcount in efforts to cut costs, following a strategic review.
The London-listed firm told investors on Monday it will cut 200 positions, which represents 17 per cent of it its global workforce.
The group said the move will save £21million a year by 2025, with around £2.5million expected to be cut this year, as the business continues ‘to seek opportunities to drive efficiencies and control costs’.
The London-listed firm said it is set to cut 200 positions, which represents 17 per cent of it its overall staff
CMC Markets has already been driving cost savings by ‘merging support functions across multiple business lines, streamlining reporting lines and automating processes’, it added.
The group also confirmed that trading remains in line with expectations and it is on track to deliver net operating income of £290million to £310million this year.
CMC Markets soared by 12.35 per cent to 149.20p in Monday morning trading.
Founded by the former Conservative Party co-treasurer, Lord Peter Cruddas, CMC benefited during the early part of the Covid-19 pandemic from a surge in amateur investors taking advantage of the heightened market volatility to make some extra cash.
But online trading platforms have struggled to maintain activity levels seen during Russia’s invasion of Ukraine in February 2022 and during the pandemic.
Nevertheless, CMC last month lifted net operating income expectations for 2024 from its previous forecast of £250million to £280million..
The firm attributed the strong quarterly performance to resilient business-to-business and institutional investor demand.
Analysts at Peel Hunt said the cost savings should result in a ‘significant increase to profitability’.
The broker added: ‘After recently upgrading earnings due to a stronger trading performance, management is taking decisive action to reduce the cost base to more appropriate levels after a number of years of investment.
‘The stock is trading on just over 8x upgraded earnings, whilst yielding close to 6 per cent. We upgrade our target price from 140p to 200p based on our increased earnings estimates, and retain our buy recommendation’.
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