Final results for the year ended 31 March 2019

Regulatory change and market conditions impact short-term profitability
Continued focus on servicing high value clients and diversifying revenue streams

6 June 2019

Year ended
£ million (unless otherwise stated)
31 March 201931 March 2018Variance %
Net operating income130.8187.1(30%)
Profit before tax6.360.1(89%)
Earnings per share (pence)2.0p17.3p(88%)
Ordinary dividend per share (pence)2.0p8.9p(77%)
Number of trades (million)64.568.4(6%)
Value of trades (£ billion)2,2592,587(13%)
Active CFD and Spread bet clients (numbers)53,30859,165(10%)
Revenue per active client (£)2,0682,964(30%)

Notes:
Net operating income represents total revenue after commissions payable to introducing partners and betting levies
Dividend per share paid or proposed relating to the financial year
Active clients represents those individual clients who have traded with or held a CFD or spread bet positions with the Group on at least one occasion during the financial year
Revenue per active client represents total trading revenue from CFD and spread bet active clients after deducting partner commissions and levies

Highlights

  • Market conditions and regulatory change driving reduction in net operating income to £130.8 million, down £56.3 million (30%). Operational gearing resulted in this decrease coming through to profit before tax of £6.3 million, down £53.8 million
  • ANZ Bank white label stockbroking partnership successfully implemented on time and budget resulting in 81% increase in stockbroking net revenue to £15.5 million
  • CFD and Spread bet active clients down 10%, as a result of market conditions and enhancements to the application process
  • Proposed final ordinary dividend of 0.68 pence, resulting in a full year ordinary dividend of 2.03 pence
  • Financial performance at the start of 2020 is in line with run rate consensus expectations

Regulatory update

  • ESMA retail clients trading at in the region of 35% of pre-August 2018 volumes, continue to maintain account balances and are using more of their account balance to cover margin and holding positions for longer
  • ESMA professional client numbers remain stable
  • Brexit: German subsidiary on track to be operational by October 2019, pending final regulatory approval

Continued progress made on strategic initiatives

  • Focusing on three strategic initiatives going forward which will diversify revenue streams through our investment in technology
  • Institutional: Equities DMA released during the year and enlarged sales team recruited
  • Client journey optimisation: focusing on on-boarding efficiency and high value client proposition
  • Established markets: focus on client service means the Group continue to top independent survey feedback regarding client satisfaction and high value client service

Peter Cruddas, Chief Executive Officer commented:

“This has been a difficult period of trading for CMC and our sector, but having now weathered the ESMA transition, we exit this year with renewed confidence in the future. We have learned as our clients adjusted to the imposition of much lower leverage levels at the same time as experiencing range bound markets. As a result, we have adjusted our business to ensure we capture revenue appropriately and manage the net risk we are exposed to from higher client margins against smaller positions being held for longer periods.

Our business is much more balanced today than it has ever been, with a larger stockbroking business and important growth in our institutional business alongside our stabilised CFD and spread bet business all underpinned by our technology platform. We have demonstrated that our ability to use technology to provide a high quality service and access to innovative investment opportunities means we are an attractive partner for a wide array of customers and partners around the world.

As regulatory change continues to be a key positive driver in our markets, we believe that our strong product offering, client service, technology platform and balance sheet will ensure our ongoing success.”

Analyst and Investor Presentation

A presentation will be held for equity analysts and investors today at 9.30 a.m. (BST).

A live audio webcast of the presentation will be available via the following link:

http://webcasts.cmcmarkets.com/results/2019fullyear

Alternatively, you can dial into the presentation:

United Kingdom: 020 3059 5868
All other locations: + 44 20 3059 5868
Please quote “CMC Markets Full Year Results 2019" when prompted.

Annual Report and Financial Statements

A copy of the CMC Markets plc (the “Company”) Annual Report and Financial Statements for the year ending 31 March 2019 (the “2019 Annual Report and Financial statements”) is available within the Investor Relations section of the Company website http://www.cmcmarkets.com/group/results/annual-reports

Pursuant to Listing Rule 9.6.1 the “Company” has submitted the 2019 Annual Report and Financial Statements to the National Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.uk/uk/nsm

In compliance with The Disclosure and Transparency Rules (DTR) 6.3.5, the information in the document below is extracted from the Company’s 2019 Annual Report and Financial Statements. This material is not a substitute for reading the 2019 Annual Report and Financial Statements in full and any page numbers and cross references in the extracted information below refer to page numbers and cross-references in the 2019 Annual Report and Financial Statements.

Forthcoming announcement dates

Thursday 25 JulyQ1 2020 trading update
Thursday 3 OctoberH1 2020 pre-close trading update

Media enquiries

Camarco

Geoffrey Pelham-Lane / Ed Gascoigne-Pees / Jennifer Renwick Tel: 020 3757 4994

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