CMC Markets Plc (LON:CMCX) reported its performance in the year ending 31 March 2023. CMC is a worldwide leader in online retail and business-to-business (B2B) platform technology.
Net income amounted to £288.4 million, rising by £6.5 million from the year before. This was thanks to additional income from customers, especially those from the business-to-business sector, as well as additional interest money due to increases in worldwide interest rates. Predictions from March 2023 were followed closely.
Trading net revenue went up by £3.5 million (1%) because more money was made from gross client income, although the amount of money kept by the company decreased to 77%. This increase was due to market activity staying the same as it was in the second half of the previous year, leading to more trading by clients although there were fewer active clients. The amount kept per active client (“RPC”) went up by £393 (11%) to £3,968 as a result of different kinds of asset classes traded by clients.
The number of active customers trading decreased by 9% compared to the previous year; however, the average number of monthly active customers remained at 25% higher than before the COVID-19 pandemic, meaning the client base of the Group has changed for the long term. Net revenue from investing was 21% lower than the previous year, totaling £37.9 million.
This was a result of global economic uncertainty, inflationary pressures and the resulting impact on interest rates, which reduced customer activity. Overall, profit after tax was £30.1 million lower than 2022 (42%) due to expenses from investments, and the rising global inflation.
CMC Group Progresses Digital Transformation and Expands Investment Opportunities with CMC Invest Platform
Dividends of £35.0 million were given over the year (2022: £72.6 million), with £25.3 million allocated towards the last dividend from the past year, paid in August 2022. And £9.8 million from a temporary dividend paid in January 2023 related to current performance. The Group has proposed a last ordinary dividend of 3.90 pence per share (2022: 8.88 pence per share).
Aside from this, the Group has plenty of potential for future customers with the advancement of the CMC Invest platform in the UK and Singapore. As well as a wide range of options for acquiring more customers and expanding income for each customer.
The Group’s digital transformation and investment in technology has made great progress in 2023, with everyday improvements to the product. As well as the launch of the CMC Invest platform to the public in the UK. Soon, Singapore will be using the CMC Invest platform too, offering equities, exchange-traded funds, options and futures. The UK market for individual customers has a mass of AuA worth approximately £290 billion.
CMC Markets’ institutional trading business is steadily increasing trading activities as a non-bank provider of funds. And is setting up new trading partnerships worldwide. Through CMC Connect, the company provides larger organizations with the ability to design their own trading platform for customers. CMC can construct a tailored service that fits its clients’ needs. Combining its own customer orders and pricing sources to give consistent liquidity, market depth and optimal execution.
Chief Executive Officer, Lord Cruddas, said:
Since pioneering online trading over 30 years ago, CMC continues to innovate and respond to market changes and challenges. 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 both 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.
During the past year, we have made progress to refine and deliver our diversification strategy. We have improved our product range across our core trading CFD and spread bet businesses, offering our clients access to a wider range of financial instruments through our award-winning platforms. We have leveraged our existing technology to launch a new investment platform in the UK, with a Singapore platform launching imminently, as well as opening a new office in Dubai to support the rapid growth we are seeing in our institutional business.
Through our new API ecosystem we are leveraging our technology to facilitate growth through B2B expansion. By partnering with our clients directly we are able to offer access to our deep liquidity, products, and technology stacks. Fostering additional B2B partnerships is front and centre in our strategy to achieve sustainable long-term growth.
CMC is changing quickly. Investment in our trading platforms continues and over the coming six months we’re positioned to launch cash equities, options and listed futures across our various platforms to allow our clients better opportunities to trade or hedge existing portfolio positions. Invest UK will be launching SIPPs and mutual funds, whilst Invest Singapore will initially offer equities, ETFs, options and futures. Additionally, over the course of the next 12 months, we plan to introduce a new multi-asset platform capable of trading a much wider range of instruments. I look forward to updating you later this year on further progress.
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