London-based spread betting and financial trading provider CMC Markets (LSE: CMCX) today reported surging revenues in the first quarter of the 2018 fiscal year. CMC Markets has their fiscal year ending on March 31 so the first quarter covers April until June 2017.
Following the announcement, shares of CMC Markets were up 6.55% at 154.50 pence on Thursday.
Revenues climbed during the reported period, driven by a 10 percent increase in premium clients which helped offset a 1% drop across active spread-betting and CFD client numbers. This contraction of average traders was attributed to a change in CMC’s marketing strategy along with a shift to focus on premium clients.
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As the company drew in more premium traders, this segment now accounts for nearly 10% of CMC’s overall client base and approximately 75% of the group’s revenues. As a result, also on the back of a more normal trading environment during the second half of 2017, overall revenue per client increased by 9% compared to the same period last year.
According to a filing with the London Stock Exchange, some of that success came from CMC’s focus on cost discipline and its cautious approach to the use of capital which yielded unchanged operating costs on a year-over-year basis.
The company also states that it is on track to delivering on its partnership with ANZ. CMC said that the partnership will offer the group access to over 500,000 ANZ retail stockbroking clients under the ANZ Share Investing brand. The collaboration will see ANZSI’s clients gaining access to CMC’s technology, customer service and execution via an ANZ-branded stockbroking platform.
On the regulatory landscape, the company noted: “The Group continues to monitor changes to the regulatory landscape and will fully implement changes proposed by Germany’s BaFin by the 10 August deadline. Although there has not yet been a conclusion to the FCA’s consultation in the UK, the Group has not experienced any change in client behaviour as a result of the consultation and therefore sees no impact until any changes proposed are to be implemented by ESMA.”