CMC Markets was among the FTSE 250’s biggest fallers on Thursday after the trading platform said operating costs are expected to be higher than initially expected.
In a brief quarterly trading update, the company said its customer numbers and assets under administration had remained robust, while net operating income year-to-date is in line with levels seen last year.
However, CMC warned that ‘the cost environment remains challenging’ and now expects operating expenses to be 5 per cent above guidance for fiscal year 2023.
Last month CMC Markets reported revenues had plunged from £462m to £326.6m in the year to 31 March
In its full-year results published last month, the company said its 2023 investment plans had expected to increase operating costs to approximately £205million, excluding variable remuneration.
‘Higher operating costs are the result of a combination of higher personnel and non-personnel costs including higher professional fees and software costs associated with expansion projects, as well as the impact of the weaker GBP,’ the group said today.
‘Progress towards new business growth across all platforms and geographies continues as planned all expansion initiatives are on track.’
CMC Markets shares have fallen sharply on today’s update, and are down 18 per cent to 253p this morning.
Its shares are down 44 per cent in the past year as the platform struggles to maintain higher trading levels since the pandemic.
In its full-year results, CMC reported revenues had plunged from £462million to £326.6million in the year to 31 March. Its pre-tax profit fell from £225.8million to £94.3million.
The company is also facing an investor revolt over the lack of women on its board.
Activist board Institutional Shareholder Services has called for James Richards to be sacked as chair at the firm’s annual general meeting today over a failure to ensure there were enough women on its board of directors.
Clare Salmon, one of the company’s non-executive directors, is due to step down at the meeting meaning female representation on the board will drop to only 25 per cent.
This is below the 33 per cent target set for FTSE 350 firms.
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