CMC Markets experiences record results as retail trading industry boosted by lockdowns

CMC Markets’ share price has rocketed, creating a dividend of 9.2p per share, up a tremendous 223% over last year’s interim dividend.

Publicly listed British electronic trading company CMC Markets enjoyed a bumper start to the year after more than doubling its income in the first half, capitalising on the market volatility that has occurred recently due to the government lockdowns that have been enforced globally.

The company has achieved a record £230.9m in net operating income for the six months ended September 30 which is an increase from £102.3m in the same period last year.

CMC Markets also reported a 369 per cent increase in profit before tax in the first half of £141.1m. The majority of the net income, some £200.4m, came from CFD trading and spread bet net trading revenue, demonstrating that most of this activity took place in Britain, with some in Australia.

Stockbroking net trading revenue was up 82 per cent to £26.3m, driven by an increase in client trading due to heightened market volatility as a result of the pandemic and increases in the client base.

This “exceptional performance” was underlined by a 42 per cent increase in active clients to 59,082. The cohort of clients acquired since the start of the pandemic “has been significantly larger than prior periods,” CMC said.

CFD gross client income climbed 69 per cent, reflecting an increase in trading while revenue per active client jumped 66 per cent to £3,392.

CMC Markets CEO Peter Cruddas said it was too early to know the full extent of changes in client demand but is “confident in retaining the high-quality clients we target.”

It has been quite apparent that many retail FX and CFD brokerages have been doing tremendously well during 2020 due to the increased market volatility which had been absent in developed markets for several decades, and due to the increased activity of traders who have been subjected to draconian lockdowns over the past few months and have been using time they would otherwise spend commuting or out performing every day tasks in public, for trading.

“We have many opportunities to leverage our technological innovation, quality client service and platform strength, and these will allow us to expand our product portfolio and deliver further profitable growth for the Group. I believe that, based on these competitive advantages, we will be able to provide highly attractive returns for our shareholders over the coming years” said Mr Cruddas.

CMC has declared a dividend of 9.2 pence per share, a staggering 223 per cent rise on the previous year’s interim dividend of 2.85 pence per share.

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