CMC Markets ends its financial year on a high

Recent stock market volatility has been a boon for CMC Markets with income for the last three months set to come in at the top end of guidance.

The spread betting firm said the last quarter was its strongest of the year, leaving net operating income at around £280million.

Active monthly trading client numbers have continued to remain at similar levels as reported in previous months, with its Asia-Pacific stockbroking business having a record year.

Trading boom: Recent stock market volatility has been a boon for CMC Markets

The war in Ukraine and rising inflation have made markets more volatile in recent months, which means higher trading activity for online trading platforms like CMC. 

However, full-year figures are expected to be lower than the previous year, when CMC Markets posted record profits amid a surge in spread betting and online trading in stocks.

In the year to March 2021, the group saw its operating income more than double to £410million, while pre-tax profit jumped from £99million to £224million. 

CMC Markets expects revenues from its more profitable leveraged platform to be 34 per cent lower at £349million for the last financial year,

Meanwhile, its non-leveraged business is expected to have raked in revenue of £55million, a 12 per cent decline.

It comes as the company saw trading activity plummet during last year’s summer months following on from a slow first quarter. 

But the improved performance in the last quarter seems to have cheered investors, with CMC Markets shares jumping 8.3 per cent to £2.61 in early trading on Friday.  

The stock is seeing a tentative recovery in recent months, but is still languishing at the lows it hit in September last year, when the company issued a profit warning after a collapse in trading volumes drove income lower.

Shares have risen by around 15 per cent in the past month, but are still worth less than half than a year ago, when they were trading above £5. 

CMC also said its recently-launched share buyback programme was progressing well and was on track to be completed ‘no later than 30 June 2023’.

Last month, the company started buying back 29 million shares at a value of £30million. 

Chief executive Lord Cruddas said: ‘I am delighted to report another year of strong performance both strategically and financially. Outside of the pandemic year (Financial year ending March 2021), this is a record net operating income result for the company. The performance reflects the ongoing success of our B2B technology partnerships and focus across our leveraged and non-leveraged businesses.

‘This business continues to change as we look to utilise our technology to enter new markets and expand our non-leveraged offering. I look forward to updating investors as the strategy expands over both the short and long-term.’ 

CMC Markets shares are still languishing at September’s lows

This post first appeared on Dailymail.co.uk