Thursday 10 June 2021 7:28 am

CMC Markets more than doubles profit after surge in new customers

CMC Markets has reported a record performance, doubling its annual pre-tax profit after a surge of new customers amid the retail trading boom. 

The online trading firm, founded by tycoon Lord Cruddas, reported a 63 per cent increase in net operating income to £409.8m.

Pre-tax profit for the year ended 31 March 2021 came in at £224m, a staggering 127 per cent rise on the previous year. CMC said it expects net operating income to be in excess of £330m for 2022. 

Shares are trading 1.3 per cent higher this morning.

It comes as the trading platform welcomed more than 50,000 new customers over the year, as it benefited from the growing interest in retail trading. 

Investment platforms have cashed in on a surge in trading volumes during the pandemic thanks to market volatility, lower consumer spending and a retail trading frenzy linked to Wall Street’s meme stock craze.

AJ Bell recently reported a 21 per cent rise in revenue to £73.9m after attracting a record 51,492 customers over the past year.

CMC Markets said it is confident the existing client levels are sustainable, despite a slight dip from prior levels, because the clients are “comparable to our current high value client base”.

It said its CFD active clients had increased 34 per cent to 76,591, which it said reflected its ongoing focus on “high value, sophisticated, experienced global clients”. 

“The performance in 2021, building on a strong performance in 2020, is a result of the Group’s unwavering focus on our strategic initiatives. This has delivered increased diversification of Group revenues and improved CFD client income retention,” chief executive Lord Cruddas said.

“Active client numbers have also increased substantially, primarily as a result of COVID-19 related volatility and heightened levels of interest in the financial markets, but our strategy allows us to attract and retain these new clients.” 

CMC has lifted its payout to shareholders, announcing a final dividend of 21.43 pence per share, bringing the total dividend to 30.63 pence per share. 

The company has continued to invest in its proprietary technology and today confirmed it plans to invest in a new wealth platform, following speculation.

The new offering, which could be branded CMC Wealth, is slated for a full launch as soon as the end of this year, Sky News reported on Wednesday.