Interim results for the six months ended 30 September 2017
Pre-tax profit up 58% on high value client business
|For the six months ended
£ million (unless otherwise stated)
|30 September 2017
||30 September 2016
|Net operating income
|Profit before tax
|Earnings per share (pence)
|Number of trades (million)
|Value of trades (£ billion)
|Active clients (numbers)
|Revenue per active client (£)
Financial and operating highlights
- Net operating income up 19% to £89.6 million (H1 FY17: £75.5 million)
- Operating costs up 5% to £59.3 million (H1 FY17: £56.4 million), mainly due to higher discretionary performance incentives and core staff costs
- Profit before tax up 58% to £29.8 million (H1 FY17: £18.8 million) reflecting strong operational gearing
- Revenue per active client up 22% to £1,814; slight decline in active clients, down 2%
- Continuing growth in client assets up 14% to £322.5 million (H1 FY17: £283.3 million)
- Regulatory total capital ratio of 29% and own funds of £190.3 million
- Interim dividend of 2.98 pence (H1 FY17: 2.98 pence), one third of full year ordinary dividend for prior year
- Product offering quickly adapted for regulatory change in Germany, reflecting the Group’s flexible and adaptable proprietary technology
- Established markets: Value of client trades up 25%, through the Group’s focus on high value clients
- Geographic expansion: Poland office continuing to perform well, with the value of trades up 107% and client numbers up 96%. Shanghai office officially opened in October 2017
- Digital initiatives: 56% of the value of Next Generation client trades completed on mobile devices in H1 FY18 (H1 FY17: 50%)
- Maintain a competitive and compliant product offering: FX DMA launched and HTML5 roll out nearing completion
- Institutional offering: Institutional business continues to grow, value of client trades up 91% compared to H1 FY17
- Stockbroking: partnership with ANZ Bank remains on track for delivery in September 2018
Peter Cruddas, Chief Executive Officer, commented:
I am pleased with the Group’s excellent performance and progress for the first six months of this financial year. Net operating income was a record for the first half and a reflection of our continuing focus on high value clients. We are continually developing and improving our offering, growing our institutional business as well as making progress in new geographies. I am delighted to confirm that, having recently visited Australia to see ANZ’s senior team, our stockbroking partnership is on track for launch in September 2018.
We continue to await the outcome of the industry review by the European regulators, and have had meetings with the various regulators as part of the consultation period. What is clear from the consultation process is that the regulators are concerned with the level of client losses, and inadequate appropriateness and on-boarding checks.
We fully support increased regulatory oversight of the industry and believe that CMC’s business model will benefit from such proposed changes. Our business model is to attract and retain high value, experienced clients that understand the product. I believe this puts us in a stronger position than many of our competitors.
We also have diversity with 15 offices around the world and a growing stockbroking business in Australia, which will continue to grow its contribution to the Group following the implementation of the ANZ Bank stockbroking business.
Whilst we await the outcome from the European regulators, the teams around the world are focused on delivering our strategic initiatives and ensuring that whatever the outcome we will be ready to respond and adapt.
Analyst and Investor Presentation
A presentation will be held for equity analysts and investors today at 09:30 a.m. (GMT)
A live webcast of the presentation will be available via the following link:
Alternatively, you can dial into the presentation:
United Kingdom: 020 3059 8125
All other locations: + 44 20 3059 8125
Please quote “CMC Markets plc H1 2018 Results conference” when prompted.
Forthcoming announcement dates
|25 January 2018
||Q3 2018 interim management statement
|29 March 2018
||FY 2018 pre-close update
Geoffrey Pelham-Lane/Ed Gascoigne-Pees/Jennifer Renwick Tel: 020 3757 4994