Stockbroker boom down under boosts CMC Markets share price
CMC Markets shares rocketed in early trading after a rise in stockbroking activity in Australia coupled with its expanding institutional business partnerships boosted profits.
Shares soared 12.7 per cent to 415p, with shares up 37.1 per cent since the start of the year.
The trading platform operator recorded a 20 per cent hike in profit before tax in its latest annual results, rising to £101.3m from £84.5m the prior year.
Earnings before tax also increased 14 per cent to £117.8m, following a significant improvement in performance during the second half of the year, with earnings down five per cent in the first six months.
Basic earnings per share jumped 22 per cent to 27.5 pence per share from 22.6 pence per share.
The board proposed a final dividend of 8.3 pence per share, bringing the final full-year dividend to 13.8 pence per share, a 21 per cent year on year increase.
Australian performance
The FTSE 250 company also saw its Australian stockbroking arm deliver record income, hitting A$140.3m (£74.4m), a 32 per cent year on year hike, bolstered by growth in client activity and assets under administration.
Its Australian stockbroking partnerships with banks Westpac and ASB Bank are also on track for launch within the next 12 months, with Westpac bringing in roughly A$39bn in assets under administration.
CMC also credited its momentum in institutional and B2B operations, including its neobank API partnership, which is widely believed by the market to be with Revolut, which allowed it to avoid “extreme volatility”.
Lord Peter Cruddas, chief executive of CMC, said: “We have had tariffs, wars, de-dollarisation narratives, a parabolic move in gold and silver, persistent energy supply and demand tensions, and AI-driven speculative behaviour, especially across commodities.
“This kind of volatility is often viewed as a tailwind for traditional D2C, or retail providers, which is broadly true. However, CMC today operates a very different and diverse business model… with performance significantly driven by B2B and wholesale.”
CapX, the firm’s corporate broking platform, also contributed £2.4m in net trading income over the course of the year.
‘Defining period’
The group anticipates operation income to rise by at least 17 per cent year on year in 2027, ranging from £460m and £480m.
CMC also expected its broadening institutional and B2B partnerships to allow it access to a wider client base, and plans to expand its neobank API partnership over the next 12 months.
Cruddas said: “The next 12 months are expected to be a defining period for the Group, with Westpac and ASB Bank expected to come online, continued rollout of our Super App, further expansion of our neobank partnership and ongoing momentum across both our investing and retail platforms.”