September 02, 2021 - CMC Markets plc issues a trading update for the five months ending 31 August 2021.
CMC entered the current financial year with significant momentum following a year of record performance. Underlying fundamentals remain robust with overall monthly active client numbers at similar levels as reported in the recent Q1 2022 trading update, which remain up around a third from pre-pandemic levels. Likewise, client AuM remains near record levels, highlighting the inherent ability of clients to trade when market opportunity arises.
Offsetting this, overall market activity has remained subdued through July and August following on from the moderation in activity reported in Q1. Reduced volatility in markets has resulted in lower trading activity across both the newly acquired and existing cohort of clients. Similar trends have been seen across our non-leveraged and leveraged businesses.
In addition to lower activity, year to date client income retention has also been tracking moderately below the targeted 80% although is expected to recover through the remaining seven months of the year based on a reversion towards historical averages in the mix of asset class trading.
As a result, should current market conditions prevail for the remainder of the year the Group now expects FY 2022 net operating income to settle in a range between £250-280million. FY 2022 operating costs will continue to track moderately higher year over year albeit partly offset by lower marketing costs in line with lower activity trends.
Beyond the recent moderation in market activity, the Group continues to have confidence in the long term growth opportunities of the business and in conjunction with further progress on its strategic initiatives, including the ongoing development of the non-leveraged investment platform, looks forward to continuing to generate long-term business growth and value.
Forward looking statements
This trading update may include statements that are forward-looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as required by the Listing Rules and applicable law, the Group undertakes no obligation to update, revise or change any forward-looking statements to reflect events or developments occurring after the date such statements are published.
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