CMC Markets shares sink 21% after FY2022 results release
Shares of London based online trading services provider CMC Markets plc (LON:CMCX) traded down by 21% on Thursday, after the company reported its full results for its fiscal year ended March 31, 2022.
CMC dragged down some of its competitors as well, with IG Group (LON:IGG) shares off by 5% on Thursday.
The decline is somewhat puzzling, given that CMC had already shared with the markets what it thought Revenues and Profits would be in a Trading Update released in early April. In fact, Revenues came in a little ahead of what CMC had targeted in that early April announcement.
The second half of FY2022 (i.e. October 2021 to March 2022) at CMC was much-improved over the first half of the year, with Revenues up 22% to £155 million and Net Profits up 58% to £44 million. However on a year-to-year basis, Revenues were down by 31% and Profit by 60%
CMC shares have been on a wild roller coaster ride the past 12 months. Last September CMC shares dropped by 27% after the company issued a FY2022 revenue forecast cut. The shares continued to drift down by another 40% through to February 2022, hitting a 52-week low of 212.50p before rallying nearly 50% to above 310p earlier this week, before the latest results were announced. On Thursday CMCX closed at 239p, down 21% on the day.
CMC Markets 1-year share price graph. Source: Google Finance.
It seems as though the market was hoping for an indication that CMC’s top and bottom line results are headed back to 2021 levels, and didn’t get that. The company also cut its dividend to 12.4 pence for the year, down 60% from 30.6p in FY2021, which seemed to disappoint investors, although some of CMC’s excess capital is already being used to fund a £30 million share buyback program.