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CMC Markets income to beat expectations amid increased trading activity
20th Mar 2020 11:18
(Sharecast News) - Online trading platform CMC Markets said on Friday that it expects to beat consensus expectations on full-year operating income as the heightened trading activity seen at the end of February carries on into March.
In an update for the period from 1 March to 19 March, the company said it has experienced continued high levels of client trading activity, which has been more than twice what it sees in more normalised market conditions in both its contracts-for-difference and stockbroking businesses. In addition, client retention has remained strong.
As a result, it expects to deliver net operating income for the year ended 31 March 2020 ahead of current market consensus of ?219m.
Chief executive Peter Cruddas said: "I am pleased to say that our technology infrastructure has held up well, including our B2B and stockbroking platforms, despite record trades in the underlying markets and exchanges.
"At times like these it is not just about our financial performance, which is clearly very good, but it is about protecting the business, our clients and our staff and that is my major concern now. However, I can confirm that we are operating very well and there are no major commercial or technology issues that concern me at this time. Hopefully we can all get back to normal soon."
Broker Liberum said the update won't come as a surprise given comments from peers.
"However we note its comments that the current run-rate of revenues in its CFD and stockbroking businesses are more than double that of those seen in more normalised conditions. This comment provides a positive read-across for Plus500, who recently provided an update but didn't quantify the extent uplift it was enjoying.
"In addition to the financial update the company has indicated that its platform and technology is holding up well to the increase in customer demand, as well as the operational changes it has put in place in relation to Covid-19, including the decision to have its employees working from home and its disaster recovery sites."
In an update for the period from 1 March to 19 March, the company said it has experienced continued high levels of client trading activity, which has been more than twice what it sees in more normalised market conditions in both its contracts-for-difference and stockbroking businesses. In addition, client retention has remained strong.
As a result, it expects to deliver net operating income for the year ended 31 March 2020 ahead of current market consensus of ?219m.
Chief executive Peter Cruddas said: "I am pleased to say that our technology infrastructure has held up well, including our B2B and stockbroking platforms, despite record trades in the underlying markets and exchanges.
"At times like these it is not just about our financial performance, which is clearly very good, but it is about protecting the business, our clients and our staff and that is my major concern now. However, I can confirm that we are operating very well and there are no major commercial or technology issues that concern me at this time. Hopefully we can all get back to normal soon."
Broker Liberum said the update won't come as a surprise given comments from peers.
"However we note its comments that the current run-rate of revenues in its CFD and stockbroking businesses are more than double that of those seen in more normalised conditions. This comment provides a positive read-across for Plus500, who recently provided an update but didn't quantify the extent uplift it was enjoying.
"In addition to the financial update the company has indicated that its platform and technology is holding up well to the increase in customer demand, as well as the operational changes it has put in place in relation to Covid-19, including the decision to have its employees working from home and its disaster recovery sites."