CMC Markets doubles operating income as coronavirus fuels higher trading activity
Online trading platform CMC Markets has nearly doubled its income, bolstered by the coronavirus-induced selloff in March.
CMC’s net operating income jumped a staggering 93 per cent to £252m in the first quarter. While profit before tax grew from £6.3m in the first quarter of 2019 to £98.7m in the same period this year.
The group’s contracts for difference (CFD) platform continued to perform well, a 7 per cent increase in clients, while revenue per active client up 81 per cent to £3,750. CMC said this was due to the “extraordinarily high levels of trading activity within the underlying markets and exchanges”.
CMC’s stockbroking business also had a strong start to the year, with net trading revenue up 106 per cent to £31.8m. The firm said it had been driven by a combination of a “full year of revenues for the ANZ Bank partnership, higher market volatility in the fourth quarter and successful product launches.”
CMC, whose online trading platforms allow individuals to make leveraged bets on financial markets, said it has confidence in the business “when market activity becomes normalised”.
The final dividend for the year is 12.18p per share, resulting in a total dividend of 15.03p per share. The board has said it is committed to paying a total dividend going forward of 50 per cent of profit after tax.
Chief executive Peter Cruddas said: “The heightened volatility and trading activity resulting from COVID-19 has continued into the first quarter of the financial year, and CMC continue to provide clients with market leading trading platforms and client service.”
“I am also confident that, once the financial world returns to more normal conditions, the Group will continue to build on the underlying growth that was being displayed prior to the pandemic.”