CMC Markets Reports FY23 Earnings, 43% Profit Downturn

CMC Markets (LON: CMCX) has unveiled its earnings for the fiscal year 2023 (FY23), which concluded on March 31. The company posted a net income of £288.4 million, aligning with its predictions. Despite a 2% year-over-year increase, profits experienced a substantial decline.

Mixed Results for FY23 The net trading revenue, encompassing CFD and spread betting, grew by 1% to reach £233.1 million. Conversely, the investing stream net revenue dipped by 21%, totaling £37.9 million. Interest income surged from £0.8 million in the previous year to £13.9 million, while other streams’ income remained stable at £3.5 million.

London-based CMC Markets declared a pre-tax profit of £52.2 million for the past financial year, marking a 43% decrease compared to FY22. Basic earnings per share also fell by 40%, settling at 14.7 pence. Although the company will maintain dividend distributions, the rate has been reduced by 40% to 7.4 pence per share.

The brokerage platform’s performance metrics revealed varying results. Active traders dropped by 9% to 58,737, while trading revenue per client rose by 11% to £3,968. Trading client retention slipped from 80% to 77%, and trading gross client income increased by 5% to £303.5 million. Active investing clients on CMC declined by 11% to 218,310.

“Our diversification strategy has seen progress over the last year,” stated Lord Cruddas, CEO of CMC Markets.

Outlook for the Ongoing Year

Future Expansion and Growth Strategies Although trading activity during the initial two and a half months of FY24 has seen a 15-20% decline, impacting Q1 net income, CMC’s forecast for 30% net operating income growth between 2022 and 2025 still needs to be made public. 

The company plans to prioritize broadening its product range this year, including cash equities, index options, listed futures, cryptocurrencies, and an expanded selection of investment products. Furthermore, CMC will invest in institutional offerings to enhance its product suite.

Lord Cruddas, said CMC was undergoing rapid growth, and they planned to release a new platform in one year. The platform will trade various instruments in multiple assets.