Interim results for the half year ended 30 September 2021

Reiterating FY guidance; core underlying business trending well above pre-pandemic levels

For the half year ended 30 September 2021 30 September 2020 Change 30 September 2019 Change
Net operating income (£ million) 126.7 230.9 (45%) 102.3 24%
Leveraged net trading revenue (£ million)  101.0 200.4 (50%) 85.1 19%
Non-leveraged net trading revenue (£ million) 24.2 26.3 (8%) 14.5 67%
Other income (£ million)  1.5 4.2 (63%) 2.7 (43%)
Profit before tax (£ million) 36.0 141.1 (74%) 30.1 20%
Basic earnings per share (pence) 9.6 38.3 (75%) 9.5 1%
Dividend per share (pence) 3.50 9.20 (62%) 2.85 23%
Leveraged gross client income (£ million)  127.0 173.6 (27%) 103.5 23%
Leveraged client income retention 80% 115% (35%) 82% (2%)
Leverage active clients (numbers) 53,834 59,082 (9%) 41,603 29%
Leveraged revenue per active client (£) 1,877 3,392 (45%) 2,047 (8%)
Non-leveraged active clients (numbers) 185,847 168,270 10% 118,468 57%

Notes:

  • Net operating income represents total revenue net of introducing partner commissions and levies
  • Leveraged net trading revenue represents contracts for difference (“CFD”) and spread bet gross client income net of rebates, levies and risk management gains or losses
  • Non-leveraged net trading revenue represents stockbroking revenue net of rebates
  • Leveraged gross client income represents spreads, financing and commissions charged to clients (client transaction costs)
  • Leveraged active clients represent those individual clients who have traded with or held a CFD or spread bet position with CMC Markets on at least one occasion during the six-month period
  • Leveraged revenue per active client represents total trading revenue from leveraged active clients after deducting rebates and levies 

Key highlights

  • H1 2022 leveraged net trading revenue at £101.0 million (H1 2021: £200.4 million) down 50% as a result of a decrease in market volatility resulting in lower client trading activity and client income retention reverting towards guided levels.
  • Leveraged client income retention for the period at 80% with 53,834 active clients, down 9% versus H1 2021, and up 29% versus pre-pandemic H1 2020 levels. Total client money (“AUM”) in the leveraged business stood at £557 million, a new period-end record high.
  • H1 2022 non-leveraged net trading revenue was £24.2 million (H1 2021: £26.3 million) representing 19% of Group net operating income versus 11% in H1 2021. Underlying client numbers increased 10% versus H1 2021, now standing at 185,847 actives.
  • H1 2022 net operating income was £126.7 million. FY 2022 net operating income guidance reiterated at £250-280 million.
  • Operating costs for H1 2022, excluding variable remuneration, were £83.7 million (H1 2021: £79.1 million). The increase is primarily a result of the Group’s continued investment in technology staff. Variable remuneration costs decreased to £6.0 million (H1 2021: £9.8 million).
  • Announced the acquisition of approximately 500,000 Share Investing clients currently trading with CMC through our white label arrangement with Australia and New Zealand Banking Group Limited (“ANZ”). The clients bring total assets in excess of AUD$45 billion and the transaction is due to complete in the next 12-18 months.
  • Regulatory total capital ratio of 20.0% and net available liquidity of £182.7 million.
  • Interim dividend of 3.50 pence (H1 2021: 9.20 pence) with a total dividend for the year expected to be in line with policy at 50% of profit after tax.
  • As announced on 15 November 2021, the Board intends to undertake an exploratory review to consider the viability of a managed separation of the Group's non-leveraged and leveraged businesses in the interests of maximising shareholder value.

Lord Cruddas, Chief Executive Officer, commented:

“I’m very pleased to see the business is operating well above pre-pandemic levels across all our business lines. This is testament to the resilience and quality of our platform and offering.

Encouragingly for the future, we closed our first half with client money (“AUM”) in our leveraged business being maintained close to record highs. It was also encouraging to see active client numbers increase by 10% in our non-leveraged business in support of our diversification strategy. Our non-leveraged business continues to offer the greatest growth potential and now represents approximately 50% of our trading revenue in Australia and nearly 20% of Group net operating income. In line with our aim to diversify and grow our non-leveraged earnings we announced the acquisition of the ANZ Share Investing clients that, when completed over a 12-18 month period, will boost our non-leveraged business with approximately 500,000 clients with total assets in excess of AUD$45bn. We are on a fast track to diversification, using our existing platform technology to win B2B and B2C non-leveraged business. This will be further boosted with the launch of our new UK investment platform planned in the early part of the next financial year, which will offer both B2C and B2B potential.

In line with this strategy, we believe it is right for us to evaluate the viability of separating the businesses in order to unlock the significant value within the current Group structure. The Board is expected to start this review before year end and complete it by June 2022. We will update on progress in due course.”

Analyst and Investor Presentation

A presentation will be held for equity analysts and investors today, 17 November 2021, at 10:30 a.m. (GMT).

A live webcast of the presentation will be available via the following link:

https://webcasts.cmcmarkets.com/results/2022halfyear

Should you wish to ask a question, please dial into the presentation on +44 (0)20 3059 5869, and quote “CMC Markets plc H1 2022 Results Conference” when prompted.

Forthcoming announcement dates

20 January 2022 Q3 2022 trading update
8 April 2022 FY 2022 pre-close update

Forward looking statements

This trading update may include statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules and applicable law, the Group undertakes no obligation to update, revise or change any forward-looking statements to reflect events or developments occurring after the date such statements are published.

Enquiries

CMC Markets Plc
James Cartwright, Investor Relations
Euan Marshall, Chief Financial Officer
[email protected]

Camarco
Geoffrey Pelham-Lane
Jennifer Renwick
+44 (0) 20 3757 4994

Notes to Editors

CMC Markets Plc ("CMC"), whose shares are listed on the London Stock Exchange under the ticker CMCX (LEI: 213800VB75KAZBFH5U07), was established in 1989 and is now one of the world's leading online financial trading businesses. The Group serves retail and institutional clients through regulated offices and branches in 12 countries, with a significant presence in the UK, Australia, Germany and Singapore. CMC offers an award-winning, online and mobile trading platform, enabling clients to trade over 10,000 financial instruments across shares, indices, foreign currencies, commodities and treasuries through contracts for difference ("CFDs"), financial spread bets (in the UK and Ireland only) and, in Australia, access stockbroking services. More information is available at http://www.cmcmarkets.com/group/