CMC Markets expect to earn £280 million in FY2022, eyes expansion to Singapore

abdelaziz Fathi

CMC Markets PLC (LSE:CMCX) today published a trading update covering the three months from  January 1, 2022 to March 31, 2022 – the fourth quarter of its fiscal year. The release of interim results comes ahead of the announcement of its full year results, scheduled for June 9, 2022.

CMC Markets

The UK-listed brokerage firm said the Q4 was its strongest quarter of the fiscal year, leaving net operating income through March 2022 at the top end of guidance at £280 million. This figure would be down nearly 47 percent from the £409 million achieved a year ago.

CMC Markets, founded by tycoon Lord Cruddas, also anticipates leveraged trading revenue for the twelve months that ended March to be around £230 million, lower by a third from £349 million a year ago. Additionally, net income for this segment is expected to be about £288 million, down by 14 percent year-over-year from £335 million in 2021. Non-leveraged business is also expected to yield lower revenue of nearly £48 million from £55 million in 2021.

During Q4 2022, CMC highlighted that it continues to invest in the development of its UK non-leveraged platform, CMC Invest, which already launched internally with the full market release set for mid-2022.

London-based trading provider has set ambitious growth targets for their B2B arm of business which CMC expect to achieve by catering to a greater range of institutional client types and their respective trading strategies. This will be further boosted with the launch of their new UK investment platform, which will offer both B2C and B2B potential, the company added.

In addition, the listed broker will be launching a new investment platform in Singapore within a year, as well as considering two other jurisdictions for launch in 2023. CMC says the move comes as the firm continues to diversify and expand its geographic footprint through its technology, leveraged institutional offering, and non-leveraged platforms.

Lord Cruddas, Chief Executive Officer, commented

“I am delighted to report another year of strong performance both strategically and financially. Outside of the pandemic year (Financial year ending March 2021), this is a record net operating income result for the company. The performance reflects the ongoing success of our B2B technology partnerships and focus across our leveraged and non-leveraged businesses. This business continues to change as we look to utilise our technology to enter new markets and expand our non-leveraged offering. I look forward to updating investors as the strategy expands over both the short and long-term.”

Overall client money and assets under administration remain close to record highs, it said in a filing with the London Stock Exchange. The online trading group is also on track to split its financial betting business from its brokerage arm in an attempt to boost returns for its investors.

Earlier in March, CMC Markets commenced the £30 million share buyback program announced in February and expects to complete the transaction before the end of June 2023. Maintaining a balanced approach between funding growth in key channels and returning excess liquidity to shareholders, CMC said the purpose of the program is to reduce its capital share by cancelling all or part of the stocks acquired through the program.

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