CMC Markets revenues fall 31pct as markets stabilise
CMC Markets reported a drop in revenues and customer income for the financial year 2022 as the market environment stabilised following a period of high volatility after the Covid-19 hit.
In the 12 months to March 2022, the company’s trading business yielded £282 million in net revenue for the FY 2022, down 31 percent from £410 million it earned in the previous year.
CMC Markets, founded by tycoon Lord Cruddas, reported its leveraged trading revenue for the twelve months that ended March at £230 million, lower by a third from £349 million a year ago. Additionally, net income for this segment was about £288 million, down by 14 percent year-over-year from £335 million in 2021. Non-leveraged business also yielded lower revenue of nearly £48 million from £55 million in 2021.
During the FY 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.
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.
Lord Cruddas, Chief Executive Officer commented: “I am delighted to report another year of impressive performance from both a strategic and financial standpoint. Excluding the exceptional COVID-19 impacted prior year, which due to market volatility saw unusually significant trading volumes, this is a record net operating income result for the Group.”
“We believe commissions, execution spreads and custodial fees are too high and too expensive for retail investors. We will utilise our platform technology, including pricing and execution, to drive down the transaction costs of investments for retail clients, just like we did in Australia, where we are the number two investment platform for retail investors,” he added.
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.
