CMC Markets swings to loss amid ‘tough’ market conditions
CMC Markets swung to a loss this morning and saw dividends per share fall amid a slowdown in trading volumes on its online platforms.
The FTSE-250 listed firm, which is run by the Tory peer Lord Cruddas, saw half-year profits fall from £36.6m to a loss of £2m. Dividends per share dipped from 3.50p to 1p.
In an announcement on the London Stock Exchange, CMC reported a near-third decline in revenues to £87.5m, while net operating income dipped two per cent to £122.6m.
Lord Cruddas, chief executive officer, warned of 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.”
Trading revenue was down 14 per cent to £132.6m amid a fall in the number of active trading clients, which now sits at just over 46,000.
CMC Markets was among a number of trading platforms to rake in bumper profits when markets were hit by the pandemic but has since struggled amid tempered conditions. It has also been hit by the flight in day traders who rushed to the platform during the meme stock saga.
Shares are down over 50 per cent in the year to date and the company flagged “quieter” market conditions in August.
The business has undergone a significant shift over the last year as it looks to diversify into new assets, including expanding its investment platform in the UK and Singapore.
“These new business additions are complemented by continued investment in our established CFD and spread bet trading businesses and widen the capability we have to offer on our B2B business,” Lord Cruddas said.
The company announced the departure of CFO Euan Marshall in July, who will exit the firm in January.