CMC Markets Reports 20% YoY Drop in Net Operating Income for H1 FY24

CMC Markets, a leading global provider of online trading and institutional (B2B) platform technology solutions, today released its interim results for the half year ended September 30, 2023 (H1 FY24), seeing a yearly decrease across multiple key figures.

Financial Overview for H1 FY24:

• Net operating income for the first six months of the fiscal year totaled £122.6 million, decreasing 20% compared to £153.5 million in the same period of FY23. Among them, trading net revenue dropped by 32% from £128.4 million in H1 FY23 to £87.4 million, and investing net revenue dropped by 20% from £20.8 million to £16.8 million on a year-on-year basis, impacted by lower client activity and the uncertain market conditions stemming from the inflationary and higher interest rate environment. On the contrary, other income reached £18.4 million for the six months, jumping 338% compared to £4.3 million in the first half of FY23, predominately driven by increases in global interest rates and resulting income from client and own cash balances.

• Operating costs for the first half of FY24, excluding variable remuneration, amounted to £121.9 million, rising 15% from £106.3 million in the year-ago period, including a £5.3 million impairment relating to internally developed trading platforms for the UK Invest and cash equities offerings due to unfavorable equity market conditions and operational delays.

• On a yearly basis, Active trading clients for the six months dropped by 7% from 50,199 to 46,832, while active investing clients dropped by 8% from 164,632 to 152,192.

• Client trading assets under management stood at £501 million at the end of this September, a slight decrease of 1% compared to £506 million in H1 FY23.

• Lose before tax came in at £2.0 million for the period, compared with profit before tax of £36.6 million in H1 FY23.

• Dividend per share was 1.00 pence, decreasing 71% from 3.50 pence per share on a year-on-year basis.

Peter Cruddas, Chief Executive Officer of CMC Markets, commented: "I am pleased with the resilience the business has demonstrated in the first six months of the year in what has been a tough market environment, with low volatility offering fewer opportunities for clients of our trading business. Despite the subdued market conditions, we have seen continued commitment from our existing clients and positive engagement in our institutional business. Our diversification strategy continues to progress and is on track with major releases in the period and several others planned for the coming months."

Cruddas added: "Our technology remains our competitive advantage and we are committed to a disciplined level of continuous investment, however with all that has been achieved over recent years the level of capital investment has now peaked. I am very excited about the future of the company and the opportunities that our diversification strategy has opened up for us in many parts of the world."