CMC Markets expects FY21 net operating income to be at upper end of market consensus
UK online broker CMC Markets Plc (LON:CMCX) today published a trading update for the period from 1 October 2020 to 31 December 2020 (Q3 2021).
CMC Markets reports that, in Q3 2021, the entire business has continued to perform very well, with high active client numbers resulting in strong client trading activity, although at lower levels than earlier in the financial year. In addition, client income retention remained well in excess of 80%, but below the levels reported for H1 2021, as guided.
Let’s recall that, in the first half of 2021, net operating income increased by £128.6 million (126%) to £230.9 million. There was strong growth in both the CFD and Stockbroking areas of the business as a result of ongoing volatility related to the COVID-19 pandemic driving new clients to on-board and dormant clients to reactivate their accounts.
Today, CMC Markets said its investment in platform technology continues to attract and retain premium clients, with market leading functionality and robust operational performance. This was especially evident during the November Pfizer vaccine announcement when CMC Markets’ platforms remained resilient and performed very well. The business reported no outages during this very volatile trading period.
Client acquisition levels remain high and the quality of this year’s new cohort of clients remain encouraging as they continue to show similarly high value qualities to prior cohorts.
Following the continued strong performance, the Board is confident that net operating income for the Full Year 2021 will be at the upper end of the current market consensus.
As at January 19, 2021, the company compiled Full Year 2021 consensus, including 5 of the 6 covering analysts, is as follows:
- Net operating income of £376.6 million, ranging from £370.2 million to £387.5 million
- Profit Before Tax of £197.2 million, ranging from £191.3 million to £206.3 million
Peter Cruddas, Chief Executive Officer, commented:
“I’m delighted by our performance, and as we enter our final financial reporting quarter, we are focusing on delivering on our premium client strategy through technology, service and a resilient trading platform. In addition, we have a healthy pipeline of projects that will drive new revenue streams, which I will talk more about in the next financial year.
I am very excited about the opportunities to continue to grow and diversify this business on the back of our platform technology. I have talked a lot in the past about investment in technology and people, and this will continue to be a priority as we seek to maintain and expand our competitive advantage.
We will do this through product expansion, our technology expertise and our capability to deliver an enhanced user experience across different asset classes. We have already proven we can do this with our stockbroking business in Australia. This will further help us attract and retain high value clients.
In addition, continued investment in our risk infrastructure is delivering latency reduction and pricing and execution efficiencies. This allows us to capture a higher percentage of our premium client income especially during volatile market conditions.
As a Group, we will continue to deliver underlying growth and considerable value to shareholders, through strong results, an attractive dividend policy, investment in the business, investment in technology and investment in risk management infrastructure.
I am very positive about the outlook and strong momentum that is underpinned by my incessant desire to keep investing in the business through technology and quality staff.”