CMC Markets Posts 135% Increase in H1 2021 CFDs Revenue

CMC Markets Plc (LON:CMCX) filed its pre-close trading update for the six months ending on September 30, projecting solid full-year guidance for the 2021 financial year.

In the six months, the net revenue generated from the sale of contracts for differences (CFDs) was around £200 million, up from £85 million generated in the same period last year. That translates to a year-on-year increase of over 135 percent.

The online brokerage is also expecting a net stockbroking revenue increase to approximately £26 million for H1 2021 from £14 million in H1 2020. This, according to the brokerage, is the result of growth and specifically its white-label partnership with ANZ Bank.

With investment in technology and marketing costs, CMC is expecting that its operating cost for the period would increase to £80 million. Last year, this was £65 million for the first six months of the FY.

“I am delighted with our record first-half performance, which vindicates our strategy of diversification and continuing focus on high-value clients,” CMC CEO, Peter Cruddas said in a statement. “The performance is particularly pleasing given that the financial year began in the midst of the global COVID-19 pandemic.”

The group company highlighted that it benefited from the market Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term triggered by the Coronavirus Coronavirus The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, The outbreak of Covid-19 or Coronavirus in early 2020 has since redefined the financial services industry. Brokers have been forced to quickly adapt to several changes, both positive and negative.This includes the FX industry, which saw surges in volumes across the retail and institutional space in Q1 2020. This trend can be explained by an outflow of volatility, coupled with countries taking major moves to stabilize their respective economies.In conjunction with uncertainty caused by the virus, Read this Term pandemic as client activity increased significantly. Additionally, the brokerage is focusing on acquiring and retaining high-value B2B and institutional clients.

High Expectations

Based on the mentioned half-yearly results, CMC is projecting strong results for the full FY 2021, with net operating income on the upper end of the current range of consensus, while expecting the operating cost to be moderately above consensus.

In the full-year consensus, the brokerage is expecting a net income of £329.9 million, ranging from £321.0 million to £348.7 million; the operating expanse of £148.5 million, ranging from £145.4 million to £152.1 million; and pre-tax profits of £159.6 million, ranging from £149.2 million to £175.3 million.