CMC Markets strikes upbeat note on performance in Q3 FY20

Maria Nikolova

Net operating income continued to outperform expectations in the quarter to end-December 2019, the brokerage says.

Online trading services provider CMC Markets Plc (LON:CMCX) has just published a trading update for the third quarter of FY20, that is, for the three months to December 31, 2019, with the company being rather upbeat on its performance for the period.

CMC Markets says its net operating income continued to outperform expectations in Q3 2020. The strong performance was supported by higher retention of client income in comparison to H1 2020. This led to higher revenue per active client despite lower client income due to the weaker market conditions throughout much of the quarter.

The company notes that Q4 2020 has started well and in conjunction with the Q3 2020 performance, the Board remains confident in the ongoing strong revenue performance for the full year, with net operating income expected to be ahead of the upper end of the current range of analyst forecasts.

As at January 22, 2020, company compiled full year 2020 consensus is:

  • Net operating income of £187.5 million, ranging from £184.1 million to £189.3 million;
  • Pre-tax profit of £43.1 million, ranging from £38.6 million to £45.5 million.

As previously guided, operating costs excluding variable remuneration for the financial year ended March 31, 2020 are expected to be moderately higher than the prior year.

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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