CMC Markets’ revenues decline year-on-year in Q3 FY19

Maria Nikolova

The quarter to end-December 2018 was the first full quarter following the implementation of the ESMA measures and CMC continues to adapt to changing client behaviour following regulatory change.

Online trading services provider CMC Markets Plc (LON:CMCX) has earlier today provided a trading update for the period from October 1, 2018 to December 31, 2018.

Market conditions improved in Q3 FY19, following the particularly challenging Q2, with market events and trade tensions driving client activity, particularly in Indices. This translated into Q3 CFD net revenue performance showing a significant improvement in comparison to Q2. However, as forecast, revenue remains down year-on-year.

The quarter to end-December 2018 marked the first full quarter following the implementation of the ESMA measures. The broker notes that clients are continuing to trade when opportunities arise and retail client activity has remained steady throughout the period with client money remaining at similar levels to the first half. CMC says it continues to adapt to changing client behaviour following regulatory change.

The Group has made an encouraging start to Q4, which together with CMC’s ongoing focus on operating cost control, means that the Group’s FY 2019 outlook is unchanged. In the medium-term CMC remains well positioned to benefit from its increasingly diversified revenue streams across institutions and stockbroking as well as further geographic expansion.

Let’s recall that, during the first half of FY19, CMC Markets registered a statutory profit before tax of £7.2 million, down 76% on prior year (H1 2018: £29.8 million). Profit after tax was £7.8 million, down 69% against the equivalent period a year earlier (H1 2018: £25 million). Basic earnings per share were 2.7 pence in H1 2019 (H1 2018: 8.7 pence).

During the six months to September 30, 2018, operating expenses rose 6% to £62.7 million (H1 2018: £59.3 million), mainly due to investment in the stockbroking business and higher fixed salary costs across the Group. Revenue per active client fell 22% year-on-year to £1,413.

Read this next

Digital Assets

DappRadar report: NFTs volume below $1 billion for the first time since June 2021

DappRadar’s July 2022 industry report found that blockchain games and their NFTs remain resilient amid a crypto winter accentuated by the debacle of Terra.

Digital Assets

Blockchain.com registers to operate crypto business in Italy

Blockchain.com had registered as a digital asset provider in Italy, following in the tracks of rivals who joined a special registry with brokerage regulator Organismo degli Agenti e dei Mediatori (OAM).

Digital Assets

Binance rolls out crypto card in Argentina with 8% cashback

Binance is launching its crypto debit card in Argentina, the first country in Latin America to have the product thanks to a partnership with Mastercard.

Digital Assets

Greece sends BTC-e operator Alexander Vinnik to US

Alexander Vinnik, an alleged Russian hacker accused of laundering $4 billion of criminal proceeds through BTC-e, has been extradited from Greece to the United States.

Retail FX

Saxo Bank reports weakest FX volume in 6 months

As many traders were away on annual summer leave, currency markets saw a relatively quiet period in July. Within that context, Copenhagen-based Saxo Bank has reported its monthly metrics, which showed a renewed decline month-over-month.

Market News

The Week Ahead: 5 August from David Madden, Market Analyst at Equiti Group

It has been an interesting week and despite a lot of negative news, equity markets enjoyed a positive run. US House Speaker, Nancy Pelosi, defied the warnings from the Chinese government and carried out a visit to Taiwan. The Beijing authorities moved military hardware close to the self-governed island to flex its muscles. Stock markets came under a little pressure as a result and risk-off assets like the Japanese yen and gold found themselves in high demand.

Opinion

Alina Strogonova of Muvon Payments: How Can Fintech Optimise Payments

Financial services in their conventional form are obsolete, according to fintech startups. New-age finance is constantly redesigning electronic money transactions and testing innovative solutions.

Digital Assets

No need for CFDs: BitMEX introduces leveraged FX perpetual swaps

Previously retail FX trading was mostly possible via CFDs (contract for difference). BitMEX’s FX perps allow both retail users and institutional traders to access FX markets through an exchange-traded contract.

Digital Assets

BEQUANT launches index measuring dollar against crypto

“Our research team has worked hard to quantify and capture the latest economic story into the broader crypto market.”

<