Just ahead of releasing full-year results for FY 2019, CMC Markets has released a trading update on its overall performance during the year. The fiscal year of CMC Market ended on 31st March 2019.
In the update, the company noted that the financial performance of the company was heavily influenced by the implementation of the ESMA intervention measures on 1st August 2018. This measure greatly reduced the client trading activity and challenging market conditions in the fourth quarter of 2018 impacted revenue generation. The company expects CFDs and spread-bet revenue during the fiscal at £110 million which is almost 37 per cent lower compared to previous fiscal.
However, the company expects the drop in revenue should be around 20 per cent and not 37 per cent in FY 2019. In the statement, the company said:
“The impact of the new ESMA margin rules, which has resulted in retail clients trading less, utilising more of their cash to fund their margin requirements or needing to deposit more funds with CMC to trade at previous levels, is showing signs of stabilising.
“Since the introduction of the new rules, client money has remained strong, and active client and new client numbers have remained stable resulting in the Group having confidence in meeting the consensus FY 2020 outlook. We believe that the new ESMA regulations are good for this business and for the industry over the medium to long term.”
The final full year FY 19 financial results will be declared on 6th June 2019.
Along with the revenue forecast for FY 2019, the company announced a number of changes to its Board of Directors. Company Chief Operating and Financial Officer, Grant Foley resigned from the company after more than six years with the firm.
Grant Foley, Chief Operating and Financial Officer said:
“Having joined CMC ahead of preparations for the IPO, the business has transformed completely over the six years I have been CFO and COO. Now we have begun to see a stabilisation of client behaviour post ESMA, I feel the business is on a strong footing, and it is time to hand over to someone else to take the business forward on the next leg of its journey.”
The company has appointed Matthew Lewis, Head of Asia Pacific and Canada to the Board. David Fineberg, currently Group Commercial Director, has been appointed Deputy Chief Executive Officer with immediate effect.
Peter Cruddas, Chief Executive Officer of CMC Markets commented:
“Grant has been an integral part of CMC’s development over the last six years, including the 2016 IPO, and he leaves the Group in a strong position. I wish Grant the very best for the future, and I would like to thank him for doing an excellent job.”
“I am extremely pleased and excited for David in his new role, and I look forward to working alongside him to develop the business over the coming years. His insights and understanding of this business and our markets after 20 years at CMC are second to none, and he thoroughly deserves this new role.”