UK based CMC Markets Plc (LON:CMCX) has published yet another trading update with the London Stock Exchange (LSE) indicating “continuing strong performance” of the broker in the period from 1 July 2020 to 31 August 2020, signaling that previously estimated performance and revenue figures may be beat as we move along into the latter months of 2020 and the company’s FY2021.
Specifically, CMC Markets reported that “the Group’s consistently strong trading performance across the business has continued, with net operating income run rate for the two month period only slightly below Q1 2021, and client income has continued to be in excess of the same period in the prior year. In addition, client income retention has remained particularly strong and well in excess of the guidance of above 80%. The stockbroking business also continues to perform strongly.”
As at 2 September 2020, the Group’s compiled Full Year 2021 consensus is as follows:
- Net operating income of £287.6 million, ranging from £282.4 million to £300.6 million; and
- Profit Before Tax of £122.8 million, ranging from £114.9 million to £137.0 million.
CMCs projections highlight a scenario where an online brokerage has successfully taken advantage of increased trading activity from an existing client base while quickly and efficiently onboarding a new subset of customers in a wave of increased trader interest beginning in March of this year. While CMC has reported that these increases have also led to elevated operational costs, the ability to book revenue from several units gives the impression that cost impacts will be minimal when accounting for quarterly and full FY2021 financial results.
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