CMC Markets revises downwards revenues forecast

Maria Nikolova

The company now expects CFD and spreadbet revenue to be around 25% – 35% lower year-on-year, compared to previous guidance for approximately 20% reduction year-on-year.

Online trading services provider CMC Markets Plc (LON:CMCX) has earlier today published a trading update for the period from January 1, 2019 to February 22, 2019.

The broker says it continues to adapt its business in response to changing client behaviour following the implementation of the ESMA intervention measures which got into effect on August 1, 2018.

As previously announced, market conditions improved in the third quarter, which drove an improvement in CFD net revenue performance. However, following an encouraging start to the final quarter, market conditions have been challenging from a revenue perspective in January and February 2019.

Client turnover has decreased due to narrower daily ranges in major products, although client money continues to remain strong and active clients remain stable.

Depending on the trading conditions in the remainder of the quarter, CMC Markets now expects CFD and spreadbet revenue to be between c. 25% and c. 35% lower year-on-year, compared to previous guidance for a c. 20% reduction year-on-year.

There is no change to the Group’s outlook for FY 2020 net operating income, which the Board expects to be in line with current market expectations.

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.”

<