CMC Markets’ stock climbs as H1 revenue to climb +20%

CMC Markets PLC (LSE:CMCX) shares spiked 5.6 percent to 235p in Thursday’s trading after the firm’s trading update for the first half of its fiscal year 2023 revealed results at the high end of company projections.

The listed brokerage firm announced an expected FY H1 2023 net operating income of £153 million, up 21 percent from £127 million a year earlier and also hitting a record performance outside the Covid-19 pandemic.

CMC said it currently anticipates a gross leveraged client income of £155, representing a 22 percent year-on-year decline compared to its £127 million intake in 2021.

The company also highlighted a projected leveraged trading revenue of £128 million at a 27 percent year-on-year increase against £101 million in 2021. However, the broker expects a 14 percent lowered non-leveraged trading revenue of £21 million compared to £24 million in 2021.

CMC’s operating costs are currently expected to hit £109 million against £84 million in the prior year, apparently reflecting higher personnel costs in the course of reaching strategic objectives.

The group cautioned that its expenses were set to climb higher on its scheduled growth in marketing expenses, along with a ramped up investment in personnel.

The firm’s notable updates included the official launch of its UK non-leveraged platform for its British staff, CMC Invest, on September 30. CMC noted that the platform will offer both B2C and B2B potential to the wider market.

Shares in CMC Markets lost nearly 25 percent of their value at one point in July after the spread betting and online trading company warned on higher costs, prompting analysts to slash their earnings forecasts.

CMC Markets, founded by tycoon Lord Cruddas, has set ambitious growth targets for their B2B arm of business which CMC expect to achieve by catering to a greater range of institutional client types and their respective trading strategies.

In addition, the listed broker will be launching a new investment platform in Singapore within a year, as well as considering two other jurisdictions for launch in 2023. CMC says the move comes as the firm continues to diversify and expand its geographic footprint through its technology, leveraged institutional offering, and non-leveraged platforms.