CMC Markets posted a trading update for the 6 months until the end of September 2020 this week. Which provided an insight as to whether or not the boost in turnover and clients numbers seen in the spring had continued across the summer and into the autumn.
CFD trading revenues rose by +135% over those six months so it would seem that the momentum has been maintained, the revenues of around £200 million completely eclipsed the £85.0 million generated in the same period in 2019.
Encouragingly stockbroking revenues also rose sharply coming in at £26.0 million compared to £14.0 of income that the division created in the same period, in the year before.
Inevitably costs for running the spread betting broker have also risen driven by investment in technology, though they have done so at a slower pace, rising to £80.0 million up from the £65.0 million posted in 2019.
CMC Markets CEO, Peter Cruddas was quoted as saying
“I am delighted with our record first-half performance, which vindicates our strategy of diversification and continuing focus on high-value clients,”
“The performance is particularly pleasing given that the financial year began in the midst of the global COVID-19 pandemic.”
Given the strong start to the financial year, CMC Markets are predicting a positive full-year outcome with guidance for an income in the range of £321.0 to £348.70 million and pre-tax profits between £149.20 and £175.3 million for the full year 2021.
Shares in CMC markets which were recently admitted to the FTSE 250 index, traded up to 392.52p before selling off again on Thursday, however, the shares have returned an impressive +63.49% over the prior six months and +139.70% over the year to date.
The firm’s strategy of investing in technology B2B services for forex trading, JV’s and HNWI’s is clearly paying off as the gearing starts to come through in earnest. The last six month have in some respects been a baptism of fire for CMC, however, both their infrastructure and business model look to have been more than able to cope.
The trick for the company’s management now is to try to drive further volumes through the business in order to maintain the momentum across the second half of the year and justify the premium rating that the shares have been enjoying.
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Darren is a veteran of the financial markets with almost 36 years of experience under his belt. He has worked in trading, sales, analytical, and research roles, he has been a regular guest & commentator on financial television channels and publications. During his career, Darren has been fortunate to act for and advise major hedge funds and investment banks as well as HNWI. Darren analyses the markets using a blend of technical and fundamental analysis