October 8, 2020 - CMC Markets Plc has announced today its pre-close trading update for the six months ended 30 September (H1 2021) 2020.
CMC reports strong trading performance across all areas of the business, driven by an ongoing focus on retaining and acquiring high value clients and diversification through its institutional B2B and stock broking business. This was supplemented by elevated volatility during H1 resulting from the COVID-19 pandemic increasing client trading activity.
CFD net trading revenue came in at approximately £200 million (H1 2020: £85 million). the company says that client income retention remained strong and well in excess of guidance of ‘above 80%’ due to the market conditions prevailing for much of H1 2021 and continued improvements to the risk management strategy.
CMC says that its stockbroking net revenue is expected to increase to approximately £26 million for H1 2021 (H1 2020: £14 million), mainly as a result of the continued growth across the business, reflecting the strengthening of the ANZ Bank white label partnership, as well as more volatile markets leading to increased client trading activity.
Operating costs for H1 2021, excluding variable remuneration, will be approximately £80 million (H1 2020: £65 million). This is primarily as a result of the Group’s continued investment in technology leading to higher personnel costs, in addition to an increase in marketing costs to attract high-value new clients and other variable costs which are linked to higher client trading activity.
Following the strong performance in H1 2021, CMC says that the Board is confident that net operating income will be towards the upper end of the current range of consensus, while operating costs (excluding variable remuneration) are anticipated to be moderately above consensus.
Peter Cruddas, Chief Executive Officer, commented: “I am delighted with our record first half performance, which vindicates our strategy of diversification and continuing focus on high value clients. The performance is particularly pleasing given that the financial year began in the midst of the global COVID-19 pandemic. I am proud of the resilience and dedication shown by all of my colleagues at CMC, who continue to ensure that our clients are able to trade throughout these periods of high volume and volatility in global financial markets.
The significant increase in net trading revenue across all areas of the business in H1 2021 is a result of the Group’s unwavering focus on our strategic initiatives. This has delivered increased diversification of Group revenues, improved CFD client income retention and an increased number of active clients.
During the period we continued to recruit new staff, we did not accept any Government financial schemes and all staff were paid in full through the normal payroll. Our new Chief Technology Officer Brendan Foxen has settled in well and is already making a positive impact with the existing technology teams.
I believe that CMC is in an excellent position with many opportunities to leverage our reputation for technological innovation, quality client service and platform stability to expand our product portfolio and deliver further diversification for the Group and ongoing returns for shareholders over the coming years.”
H1 2021 Results The results for the six months ending 30 September 2020 will be announced on 19 November 2020. A presentation for institutional investors and analysts will be held virtually on 19 November 2020 at 10.30am GMT. Webcast and conference call details will be available in due course.
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