CMC Markets soars 26 per cent after raising income guidance as volatility pulls traders back to its platforms
CMC Markets has today raised its full-year operating income guidance after recording more activity on its platforms towards the end of the year amid a pickup in market volatility.
Shares soared as much as 26 per cent to a four-month high in London on Monday morning following the trading update.
The online financial trading company said it performed strongly in the third quarter, helped by “an improvement in market conditions”.
It added this change was driven by “an increased contribution from the B2B and institutional business with the group benefiting from the long-term investments in this area”.
Following the improved trading performance, CMC raised its 2024 net operating income guidance to between £290m and £310m. It was previously expected to report net income guidance of between £250m and £280m.
The positive update followed a downbeat set of half-year figures from the online trading platform provider. In mid-November, the company reported a half-year loss of £2m, a sharp reversal from the profit of £36.6m reported in the prior year period.
The figures led CMC’s chief, Conservative peer and donor Lord Cruddas to warn of a “tough market environment, with low volatility offering fewer opportunities for clients of our trading business.”
CMC was among a number of trading platforms to rake in bumper profits when markets were hit by the pandemic but have since struggled amid tempered conditions.
The company’s shares had plunged more than 50 per cent in the 12 months to yesterday’s close as CMC struggled with subdued trading conditions. It was dropped from the FTSE 250 in September.
Broker Peel Hunt raised its recommendation on the stock to buy from add following the update.
Investment bank Numis said it expected to adjust its estimates for CMC to reflect the new guidance.
CMC’s next trading update is expected to be on 9 April.
Updated with shares and analyst commentary