CMC Markets releases final results for the year ended 31 March 2024

Net operating income at a post-Covid high. Adjusted profit before tax up 52%.

Cost efficiency programme in place to drive profit margin expansion.

Final results for the year ended 31 March 2024

Summary financials

Note: Net operating income represents total revenue net of introducing partner commissions and levies. Trading net revenue represents gross trading income net of rebates, levies and risk management gains or losses. Investing net revenue represents stockbroking and related services revenue net of rebates. Adjusted profit before tax is adjusted for one-off costs relating to impairment of intangible assets and global headcount restructuring.

Financial highlights

• Net operating income of £332.8 million (FY23: £288.4 million), up 15%, marks a new record-high outside the COVID-19 pandemic period and was driven by consistently strong performance throughout H2.

o Trading net revenue grew by 11%, to £259.1 million (FY23: £233.1 million), with strong performance in both the retail and institutional segments of the business. Of our total trading net revenue, £74.8 million was made up of fixed transactional income, which constitutes financing and commissions. Institutional segment also continues to grow as a proportion of overall net revenue.

o Investing net revenue 10% lower than prior year at £34.0 million (FY23: £37.9 million) primarily driven by unfavourable movements in FX from a weaker Australian Dollar. On a constant currency basis investing net revenue was 3% lower year-on-year.

o Other income of £39.7 million (FY23: £17.4 million) up 128% due to higher global interest rates driving income from client and own cash balances.

• Operating expenses¹, excluding variable remuneration, were £249.5 million (FY23: £217.2 million), including a non-recurring £12.3 million impairment charge relating to internally-developed platforms for the UK Invest and cash equities offerings and £4.3 million of one-off costs relating to actions to reduce global headcount.

• Regulatory total Own Funds Requirements (OFR) ratio of 312% (FY23: 369%) and net available liquidity of £192.2 million (FY23: £184.2 million)

• Statutory profit before tax of £63.3 million (FY23: £52.2 million), up 21%, reflecting net operating income outperformance and steps taken on costs.

• Adjusted profit before tax, excluding non-recurring costs, of £80.0 million was up 52%.

• Final dividend of 7.3 pence per share (FY23: 3.9 pence), taking the total dividend for the year to 8.3 pence per share (FY23: 7.4 pence), up 12% year-on-year.

¹Including impairment of intangible assets

Operational highlights

• Strong progress made to enhance operational efficiency with ongoing cost review programme driving synergies across product and business lines.

• Efficiency programme extending beyond costs to all areas of the business such as our new centralised Treasury Management Division with the launch of our global Treasury Management System focused on efficient cash management, currency and liquidity optimisation.

• CMC Markets Connect brand, API ecosystem and world-leading financial markets technology continues to underpin our growth and has proven critical in growing our B2B and institutional offering with several major client wins during the year and a strong pipeline of potential clients.

• Significantly bolstered product suite with the rollout of options and addition of cash equities to our institutional offering, to expand this valuable segment.

• Further development of investing platform with Invest UK rolling out mutual funds and SIPPs post-financial year-end and the rollout of cryptocurrencies for Invest Australia.

• Continued expansion across new geographies and markets with launch of CMC Invest Singapore, a growing footprint in Middle East with DIFC hub and renewed focus on strengthening the governance and capability of our European operations as a lever for growth.

• Regional expansion further supported by Opto, our content and thematic investing tool, which has over 100k subscribers, advanced API infrastructure and recently finalised cash equities trading functionality, which is set for imminent release.

Outlook

• Having reached the peak of the investment cycle, management continues to seek opportunities to drive further cost efficiencies and deliver margin expansion, whilst investing in significant opportunities for incremental growth.

• Combined with new product launches and further technological upgrades planned for FY25, we remain confident in the business’ ability to generate robust levels of income on a leaner cost base, resulting in improved profit margins.

• Current trading proving encouraging with positive trends seen early in the new fiscal year.

• Management is guiding to net operating income of between £320-360 million in FY25 on a cost base, excluding variable remuneration and non-recurring charges, of approximately £225 million.

Lord Cruddas, Chief Executive Officer, commented:

“Over the past year, our diversification strategy through B2B technology and an institutional first approach has delivered strong growth and opened up many opportunities for the company around the world.

“This strategy, based on continuous product launches and multiple application connectivity through the CMC Markets Connect brand, means we are making great strides in a huge market segment of B2B and institutional business, with limited competition from our peers.

“Building on this strategy this year we will launch a fully integrated multi-asset, multi-currency platform, underpinned by connectivity for B2B and institutional clients, as well as for retail clients. This is bolstered by new product launches including SIPPs, mutual funds (UK Invest), OTC options, cash cryptos, fixed income, and with futures, and exchange-traded options to come.

“CMC Markets Connect has added a new fintech dimension to our offering and there is no higher endorsement of our company than when a major bank or financial institution trusts our technology to deliver a service to their valued clients.

“Institutional, B2B and multi-asset, multi-currency platforms, across all brands is the future, and ours. We have built the infrastructure which will allow us to significantly increase our growth potential whilst improving profit margins through scale.

“It is going to be an exciting couple of years.”

An analyst and investor presentation will be held on 20 June 2024 at 9:00am UK time. Participants need to register using the link below.

Webcast:

CMC Markets plc Full Year 2024 Results

Annual Report and Financial Statements

A copy of the Company's Annual Report and Financial Statements for the year ended 31 March 2024 (the "2024 Annual Report and Financial Statements") is available within the Investor Relations section of the Company website at www.cmcmarkets.com/group.

In compliance with The Disclosure Guidance and Transparency Rules (DTR) 6.3.5, the information in the document below is extracted from the Company's 2024 Annual Report and Financial Statements. This material is not a substitute for reading the 2024 Annual Report and Financial Statements in full and any page numbers and cross references in the extracted information below refer to page numbers and cross-references in the 2024 Annual Report and Financial Statements.

Forthcoming announcement dates:

25 July 2024: Q1 2025 Trading Update

21 November 2024: H1 2025 Interim Results

Enquiries

CMC Markets Plc:

Albert Soleiman, Chief Financial Officer

investor.relations@cmcmarkets.com

Camarco:

Geoffrey Pelham-Lane: +44 (0) 7733 124 226

Jennifer Renwick: +44 (0) 7928 471 013

Alex Campbell: +44 (0) 7710 230 545

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.

MAR disclosure statement

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

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 Company 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 Markets offers an award-winning, online and mobile trading platform, enabling clients to trade over 12,000 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, Singapore and the UK, access stockbroking services. More information is available at www.cmcmarkets.com/group.