CMC Markets expects income to be ahead of market consensus in FY2020

Maria Nikolova

The recent market conditions experienced have seen heightened trading activity amongst CMC’s clients over and above the strong performance delivered to date.

Online trading services provider CMC Markets Plc (LON:CMCX) has earlier today issued a trading update for the period between January 1, 2020 and February 28, 2020.

As the company stated in its Q3 Trading Update, the final quarter of FY2020 had started well and performance across the business continued to be strong during the period.

The broker notes that the underlying net operating income performance has continued to maintain momentum throughout the fourth quarter of FY2020, and the retention of client income continues to be higher than in the first half of FY2020.

In addition, the recent market conditions experienced have seen heightened trading activity amongst CMC’s clients over and above the strong performance delivered to date.

This leads the Board to expect to deliver net operating income ahead of market consensus for the year ended 31 March 2020. Let’s note that, as at 28 February 2020, CMC compiled full year 2020 consensus is as follows:

  • Net operating income of £200.6m, ranging from £199.0m to £202.3m;
  • Profit Before Tax of £53.2m, ranging from £46.9m to £56.7m.

Let’s recall that, for the six-month period to end-September 2019, CMC Markets reported net operating income of £102.3 million, up £31.7 million (45%) from the year-ago period. The rise was driven by higher CFD revenue per active client, up 45% to £2,047, as a result of improving retention of CFD client income, and a £9 million (164%) increase in stockbroking net revenue.

In the first half of FY20, CMC Markets’ profit before tax jumped 318% year-on-year to £30.1 million.

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