Shares in CMC Markets plunged over 20 per cent this morning after the online trading platform issued a warning that soaring costs would eat into profits in the six months ahead.
In a statement this morning, bosses said income levels were in-line with the full year but a “challenging” cost environment meant operating costs would now be five per cent higher than previously expected.
“Higher operating costs are the result of a combination of higher personnel and non-personnel costs including higher professional fees and software costs associated with expansion projects, as well as the impact of the weaker pound,” bosses said.
Analysts at Jefferies said the rise in costs would imply a 10 per cent hit to profits.
The warning comes as the platform said pre-tax profits slumped 59 per cent to £92.1m in its financial year to March, after pandemic-induced volatility and high trading volumes pushed profits up £224m in the year previous.
In the statement today, bosses said that monthly trading client numbers and client assets under administration “remain robust” and growth and expansion initiatives are “on track”.
The broker is facing a potential investor revolt today as it faces shareholders at its annual general meeting. Proxy adviser ISS has advised against the re-election of chair James Richards over failures to hire enough women to its board of directors.