Profits surge at CMC Markets, shares spark

20th Jun 2024 09:37

(Sharecast News) - CMC Markets posted a better-than-expected surge in annual profits on Thursday, boosted by a strong performance across both its retail and institutional divisions.

The online trading platform said net operating income rose 15% in the year to 31 March to £332.8m, a record high outside of the pandemic. Within that, trading net revenue rose 11% to £259.1m, helping to offset a 10% slide in investment net revenues to £34m.

CMC said trading revenues had benefited from a strong performance in both the retail and institutional segments of the business, as well as a bumper second half.

Group adjusted pre-tax profits soared 52% to £80m, while pre-tax profits were ahead 21% at £63.3m.

Most analysts had expected net operating income to come in around £317m and pre-tax profits closer to £56m.

As at 0930 BST, shares in CMC had sparked 9% to 305.16p.

Lord (Peter) Cruddas, chief executive, said: "Our diversification strategy through B2B technology and an institutional-first approach has delivered strong growth and opened up many opportunities for the company around the world."

The former Conservative party treasurer, who founded CMC in 1989, added: "Institutional, B2B and multi-asset, multi-currency platforms across all brands is the future, and ours.

"We have built the infrastructure that will allow us to significantly increase our growth potential while improving profit margins through scale."

CMC noted that current trading was proving "encouraging, with positive trends seen early in the new fiscal year".

It is forecasting net operating income of between £320m and £360m for the 2025 full year, on a cost base excluding bonuses and other non-recurring charges of around £225m.

Operating expenses came in at £249.5m in the 2024 fiscal year. That included a non-recurring £12.3m impairment charge, however, as well as £4.3m of costs incurred after CMC reduced headcount.