CMC Markets Expects £126 Million in H1 FY22 Operating Income

The trading volume on the broker jumped in September with increased market volatility.

CMC Markets plc (LSE: CMCX) published a pre-close trading update for the first six months, from April through September, of the fiscal year 2022. The brokerage is expecting to generate a net operating income of approximately £126 million.

This came only a month after the London-headquartered global broker lowered its expectation for the entire year’s revenue, keeping it between the range of £250 million and £280 million, which is much lower than the previous expectation level of more than £330 million.

The leverage gross client income in the six months period is expected to come in at around £127 million, compared to £174 million in the same period last year.

Additionally, the brokerage highlighted that the client trading volumes improved with the increased market volatility in September.

The expectation for the leveraged net trading revenue has been put around £100 million, which is half of the £200 million generated in the first half of FY2021. However, non-leveraged trading revenue is expected to be around £24 million, which is very close to H1 of FY21’s £26 million.

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Non-Leverage Business Jumps

Interestingly, the brokerage group is expecting 19 percent of its net overall revenue to come from non-leveraged trading that generated only 11 percent in the previous year.

“We closed the first six months with a pickup in market volatility and client trading volumes following what was a more subdued environment from the start of the year,” said Lord Cruddas, CEO at CMC Markets.

In addition, he pointed out the expansion of the brokerage business in Australian markets, especially with the acquisition of over 500,000 share investing clients from ANZ, who brought in total assets in excess of AUD$45 billion. The migration process is expected to be completed in the next 12 to 14 months.

“Our non-leveraged business continues to offer the greatest growth potential and now represents approximately 50 percent of our business in Australia and nearly 20 percent of the business overall. This is the highest proportional level since we launched our non-leveraged platforms,” Lord Cruddas added.

“We are on a fast track to diversification, using our existing platform technology to win B2B and B2C non-leveraged business. This will be further boosted with the launch of our new UK investment platform, which will offer both B2C and B2B potential.”

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