Year in review
Statements
Our diversification strategy, while creating short-term pressures on resources and returns because of associated costs, will put the Group in a strong position for the longer term.
This will be achieved through an increased product range, the full rollout of the new investment platform, and the expansion of our international business.
James Richards
Chairman
Today the Group boasts a broad financial services offering spanning the globe. Through our new API ecosystem, we can add new products and markets quickly for our B2B and B2C clients.
We believe this breadth and level of flexibility, through one industry standard connection protocol, will be the best-in-class B2B and B2C financial services platform on the market.
Peter Cruddas
Founder & CEO
Financial Highlights
Net operating income1
£288.4m
£288.4m
2023
£281.9m
2022
£409.8m
2021
Statutory profit before tax7
£52.2m
£52.2m
2023
£91.5m
2022
223.3m
2021
Trading active clients2
58,737
58,737
2023
64,243
2022
76,591
2021
Trading platform uptime
99.97%
99.97%
2023
99.95%
2022
99.95%
2021
Investing active clients2
218,310
218,310
2023
246,120
2022
232,053
2021
Trading revenue per active client3
£3,968
£3,368
2023
£3,575
2022
£4,560
2021
Trading gross client income4
£303.5m
£303.5m
2023
£288.5m
2022
£335.3m
2021
Basic earnings per share7
14.7p
14.7p
2023
24.6p
2022
61.3p
2021
Ordinary dividend per share5
7.40p
7.40p
2023
12.38p
2022
30.63p
2021
Net operating income
£281.9m
£281.9m
2023
£409.8m
2022
£252.0m
2021
Statutory profit before tax
£92.1m
£91.1m
2023
£224.0m
2022
98.7m
2021
Leveraged active clients
64,243
64k
2023
76k
2022
57k
2021
Operational highlights
- Whilst annual trading client numbers are down 9% from 2022, monthly active clients are up 25% compared to pre-pandemic levels
- Retention of trading client income6 of 77% (2022: 80%)
- Continued to enhance the product offering within the CMC Invest UK platform, with future developments on track for release during 2024
- Investment in the institutional business, through enhancements to Spot FX including the launch of Give-Ups, has resulted in a 95% increase in notional volumes
- Operational resilience remains high, with trading platform uptime of 99.97% and investing platform uptime of 99.93%
- Trading revenue per active client up £393 (11%) to £3,968
- B2B represents 31% of net revenue at £83.4 million
Our Strategy
Trading platform product diversification
Priorities for 2023/4
- We will continue to invest in our platform that is both responsive and driven by insights, with a focus on facilitating client learning and growth in small steps
- We will continuously improve the delivery of new services that better equip our clients to manage their performance and take advantage of market opportunities
- We will expand our product range across our platforms to enhance our support for our clients' investment portfolios and increase our share of their wallet - these include cash equities, index options, cryptocurrencies and a wider range of money market investment products
- We will continue to focus our marketing spend on premium clients
- We will drive geographical growth of our trading platforms in unison with our institutional and invest platforms
Investment in B2B technology capability
Priorities for 2023/4
- We will persist in developing new B2B partnerships within Invest Australia, building on the success of our historical ANZ Bank partnership and the extensive network of B2B partnerships we already have
- We will continue to evolve our existing product offering to cater to larger institutions, resulting in greater revenue returns. Furthermore, we will enhance our ECN connectivity to access a vast electronic market, strengthening our position as the go-to non-bank liquidity provider in the B2B market
- We will utilise the development of our open API technology to pursue new white-label opportunities across both our trading and investing business lines. This includes work towards a new multi-asset platform capable of delivering bespoke white-label solutions to our clients
- We will continuously improve the delivery of new services that better equip our clients to manage their performance and take advantage of market opportunities
Expansion of Invest platforms and Institutional offering
Priorities for 2023/4
- Invest: We will expand the development of our Invest platforms across Australia, Singapore and the UK. The UK D2C market still poses a significant opportunity, with aggregate AuA standing at c.£290 billion¹ even after weaker capital markets seen over 2022
- Institutional: We will invest in our institutional offering to upgrade our product suite, thereby establishing CMC Connect as a technical innovator and institutional contender for price and liquidity construction
- Institutional: We will deliver the regional expansion of our institutional offering via our Dubai office and dedicated sales teams
- Institutional: We will deliver a physical asset-class solution to provide access to new products and functionality, featuring best-in-class technology for a market seeking a wider range of investment products
- In addition, we will expand our instrument range to meet all market liquidity requirements, including cash equities, ETFs, and other financial instruments
- Institutional: We will continue to invest in our technology and overall client experience, with the aim of improved functionality with lower transaction costs and fees
Sustainability highlights
This has been an exciting year for the Group; we've made strong progress in data collection, implementing sustainable practices into the operations of the business, while developing the overall strategy and mapping out our goals and objectives.
- Aligned to the frameworks of the Global Reporting Initiative ("GRI") and Sustainability Accounting Standards Board ("SASB") to build robust performance measures into our strategy.
- Pledged to support gender balance across the financial industry and became signatories of HM Treasury's Women in Finance Charter demonstrating our commitment to building a more balanced and fairer industry.
- Introduced Sustainalytics data into the CMC Invest UK platform, for clients to obtain sustainability data on assets, then went one step further and integrated tools for clients to set preferences and screen assets according to sustainability values.
- Evolved our HR capabilities by hiring dedicated diversity, equity and inclusion and learning and development specialists in our London and Sydney offices.
- Established a sustainability subcommittee aligned to the five strategic pillars to provide support to the Sustainability Committee and effectively embed the goals and objectives of the Our Tomorrow strategy into the DNA of our business.
- Introduced CMC's ESG Academy, a targeted learning programme to support the Sustainability Committee and subcommittee in developing their understanding of sustainability topics.
- Engaged with Normative, experts in carbon accounting, to support us on our pathway to net zero and collected our first set of Scope 3 emissions data for both 2022 and 2023.
- Undertook a deeper analysis of our climate-related risks via scenario analysis to enhance our understanding of our climate-related risks and our climate-related disclosures in line with the Task Force on Climate-related Financial Disclosures ("TCFD").
- Nominated and shortlisted for a series of awards: IR Society Awards for "Best Communications in Sustainability"; IR Magazine Awards for "Best ESG Materiality Reporting"; and given a "Leading Light" award from Making the Leap for our efforts in supporting social mobility.
- 1Net operating income represents total revenue net of introducing partner commissions and spread betting levies.
- 2Active clients represent those individual clients who traded or held positions on the Next Generation platforms or traded on the Invest platforms on at least one occasion during the financial year.
- 3Net revenue generated from CFD and spread bet active clients. A reconciliation of revenue alternative performance measures (“APMs”) to the Group’s primary statements can be found on page 188.
- 4Spreads, financing and commissions on CFD and spread bet client trades.
- 5Ordinary dividends paid/proposed relating to the financial year.
- 6The percentage of CFD and spread bet gross client income retained after rebates and gains or losses from risk management activities.
- 72022 and 2021 figures restated. Refer to note 33 for more information on 2022 restatement.