TIDMCMCX
RNS Number : 6601I
CMC Markets Plc
03 April 2020
3 April 2020
CMC Markets Plc
FY 2020 Pre-Close Trading Update
CMC delivers strong performance for the year, consistent with
previous upgrades and affirms confident outlook
CMC Markets Plc ("CMC" or the "Group"), a leading global
provider of online trading and institutional ("B2B") platform
technology solutions, today issues a trading update for the year to
31 March 2020 ("FY 2020") ahead of its full year results which are
expected to be released on 11 June 2020.
Trading Update
As announced in a series of upgrades throughout the financial
year, net trading revenue across the Group has been strong in FY
2020 and in particular during the final quarter of the year.
The CFD business has generated gross client income (client
transaction fees) of c.GBP241 million (FY 2019: GBP216.0 million)
due to the strong underlying performance in the business throughout
the year. This was further enhanced by the increased market
activity in the final quarter, which more than offsets the reduced
client trading activity resulting from the ESMA intervention
measures implemented in August 2018, four months into FY 2019. In
addition, client income retained has been considerably stronger
than the 75-80% range that was guided at the half year results (H1
2020: 82%). The Group expects CFD net trading revenue to be
approximately GBP214 million (FY 2019: GBP110.2 million). The Group
is encouraged by the continued trading of its loyal client base, in
addition to new clients who have joined the platform and existing
clients have been reactivating their accounts.
The stockbroking business has also had a strong year and net
revenue is expected to increase to c.GBP32 million (FY 2019:
GBP15.5 million). The increase was mainly driven by the first full
year of revenue generated from the ANZ Bank white label partnership
and its ongoing success, further complemented by additional growth
across the core stockbroking business.
Operating costs, including depreciation and amortisation and
excluding variable remuneration, are expected to be in the region
of GBP136 million (FY 2019: GBP120.4 million).
The Group continues to have a strong balance sheet and liquidity
position, and re-affirms that its dividend policy of paying a total
annual dividend of 50% of profit after tax remains in place.
Peter Cruddas, Chief Executive Officer, commented:
"During these times of global uncertainty, of course our first
priority is to protect the health, safety and wellbeing of our
employees and to support our clients. I am impressed by the
dedication our teams have shown in preventing disruption while
working in unprecedented circumstances, I would therefore like to
thank all of my colleagues for their continued hard work during
these tough times. Our thoughts are with those impacted by this
crisis.
At CMC we have focused rigorously on our strategic priorities
and feel that the benefit of this focus has started to come through
in our performance this year which demonstrates a step change from
where we were 12 months ago.
Our institutional offering, targeting high quality clients and
our change in risk management strategy have both contributed to
strong underlying performance for the Group. Technology continues
to be at the core of everything we do and underpins our strategy.
This is shown in both the strength of our platform, which has been
put to the test recently, and the data we have to adapt our
offering and develop products that match our client needs.
Looking forward, there are many new uncertainties, including how
governments, regulators and exchanges will react. Notwithstanding
the uncertainty we remain confident in the outlook for 2021 as we
progress with our numerous strategic growth initiatives. We're not
reliant on a sustained period of high volatility in markets, but
our well invested platform, technical expertise and diversified
offering supports us delivering sustainable results not just now
but also in years to come."
Full Year Results
CMC expects to report its Full Year Results for FY 2020 on 11
June 2020. There will be a presentation at 9.30am on 11 June 2020
for institutional investors and analysts, more details will be made
available closer to the date of announcement.
The Group notes the 26 March 2020 FCA, PRA and FRC joint
announcement associated with the ongoing developments of COVID-19
and will continually assess the expected reporting date.
Forward looking statements
This trading update may include statements that are forward
looking in nature. Forward looking statements involve known and
unknown risks, assumptions, uncertainties and other factors which
may cause the actual results, performance or achievements of the
Group to be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements. Except as required by the Listing Rules and
applicable law, the Group undertakes no obligation to update,
revise or change any forward looking statements to reflect events
or developments occurring after the date such statements are
published.
Note: As at 2 April 2020, the Group compiled Full Year 2021
consensus is as follows:
-- Net operating income of GBP193.2 million, ranging from GBP190.7 million to GBP196.0 million
-- Profit Before Tax of GBP46.8 million, ranging from GBP45.5 million to GBP47.7 million
This includes 3 out of 4 covering analysts who have updated
estimates following the previous COVID-19 and Trading Update on 20
March 2020.
Enquiries
CMC Markets Plc investor.relations@cmcmarkets.com
Euan Marshall, Chief Financial Officer
Camarco +44 (0) 20 3757 4994
Geoffrey Pelham-Lane
Ed Gascoigne-Pees
Jennifer Renwick
Notes to Editors
CMC Markets plc ("CMC"), whose shares are listed on the London
Stock Exchange under the ticker CMCX (LEI: 213800VB75KAZBFH5U07),
was established in 1989 and is now one of the world's leading
online financial trading businesses. The Group serves retail and
institutional clients through regulated offices and branches in 12
countries, with a significant presence in the UK, Australia,
Germany and Singapore. CMC Markets offers an award-winning, online
and mobile trading platform, enabling clients to trade up to 10,000
financial instruments across shares, indices, foreign currencies,
commodities and treasuries through contracts for difference
("CFDs"), financial spread bets (in the UK and Ireland only) and,
in Australia, access stockbroking services. More information is
available at http://www.cmcmarkets.com/group/
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END
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