CMC Markets PLC (LSE:CMCX) said in a trading update for the fiscal year 2023 that February and March posed a more challenging environment with lower equity volumes and a higher proportion of lower margin institutional trading activity.
The spread betting and online trading company expects its FY 2023 net operating income to be between £280-290 million. It also warned on higher costs, prompting analysts to slash their earnings forecasts. Specifically, CMC’s board expects FY 2023 operating costs excluding variable remuneration to be in the range of £215-220 million.
“Development upgrades across both its investing and trading platforms continue and the expansion in the institutional business remains on track. CMC’s diversification strategy in its investment business advances with CMC UK Invest expanding its offering and with the recent award of its regulatory licence, CMC Singapore Invest is due to go live over coming months,” it added.
The listed brokerage firm said earlier its net operating income was weaker towards the end of the calendar year, but it recovered strongly in January. Monthly active clients, client money and assets under administration in CMC’s investing and trading businesses remain stable versus H1 2023.
The firm’s notable updates included a regulatory grant in-principle for the launch of CMC Singapore Invest, marking another milestone in CMC’s geographical expansion. 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.
The company also highlighted the development upgrades across both its investing and trading platforms continue. Specifically, its UK non-leveraged platform for its British staff, CMC Invest, expanded its offering with the recent addition of ETFs, ISAs as well as responsible ESG screening functions. CMC noted that the platform will offer both B2C and B2B potential to the wider market.
CMC Markets kept its guidance for the current year unchanged. The online trading and investment broker confirmed its plans to grow net operating income by 30% over three years based on the 2022 results and underlying conditions.
The listed brokerage firm announced its FY H1 2023 net operating income at £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 achieved a gross leveraged client income of £155, representing a 22 percent year-on-year decline compared to its £127 million intake in 2021.
