CMC Markets Surpasses Plus500: FY24 Per Client Revenue Hits £4,685

The number of active customers on CMC Markets (LON: CMCX) went down more than 10,000 in FY24 from the previous year according to the company's latest annual results. However, this modest (less than 4%) fall was more than counterbalanced by an 18% increase in average revenue per active customer to £4,685. To put this in context, Plus500’s average revenue per client was approximately $3,115, which in itself was almost twice that of Interactive Brokers and well in excess of the roughly $570 per client earned by Saxo.

CMC Markets’s Solid FY24 Numbers

CMC is a leading global provider of online trading and investing, with a comprehensive retail, B2B and institutional offering across multiple asset classes. The firm’s headline figures for the year ending 31 March made for very pleasant reading for shareholders, particularly in light of previously downbeat guidance.

Net operating income rose 15% to £332.8 million (a big improvement on its late March 2023 guidance of £290-£310 million), and trading revenue was up 11% to £259.1 million.

While stockbroking and related services revenue net of rebates was down by £3.9 million—mainly due to a weaker Australian dollar—this was more than outweighed by a £22.3 million jump in ‘other income’ to £39.7 million.

Cost Cutting Efforts

CMC commenced a wide-reaching cost review programme in the last financial year. “The significance of this review cannot be overstated,” Albert Soleiman, chief financial officer at CMC Markets, told Finance Magnates. “We cut headcount by around 220 staff (making up approximately 18% of our global workforce) which was a difficult but necessary step.”

The review is much wider than headcount and takes in all material spend in areas such as premises costs, vendor rationalisation and capital allocation to ensure the company continues to drive margin expansion, adds Soleiman.

CMC’s Q1 2025 trading update reiterated that management remained focused on opportunities to drive additional cost efficiencies and deliver margin expansion, particularly in the institutional and B2B space.

In the company’s latest annual report, CEO Peter Cruddas referred to ‘making great strides in a huge market segment of B2B and institutional business with limited competition from our peers’.

Laurence Booth, head of capital markets at CMC Markets, told Finance magnates that the introduction of a fully integrated multi-asset, multi-currency platform is absolutely crucial to this strategy.

“Not all clients have the same gaps in their product offering, so we endeavour to cover all bases,” he says. “We have a strong understanding of the D2C space and, therefore, stay ahead of trending demand for asset types. We have access to every asset class via the same infrastructure, so the operational leverage comes at little to no extra cost.”

In common with many of its peers, CMC has done well from higher interest rates on its own cash as well at that of its customers – interest income accounted for £35 million last year.

Adjusted profit before tax was £80 million (compared to £52.6 in 2023), and profit before tax was up 21% to £63.3 million.

Increased Geographical Reach

CMC has also increased the geographical diversity of its business, with 56% of net revenue generated outside the UK and Europe regions compared to 49% in 2023. Key developments in this regard include the launch of CMC Invest Singapore and the expansion of the Dubai subsidiary in the DIFC.

One of the key factors in last year’s growth was the addition of new products across cash equities, index options, cryptocurrencies (including the enablement of cash crypto trading for Australian clients) and money market investments.

“Cash equities is the number one requested asset class from institutional clients,” says Booth. “There is demand across a broader client spectrum for a one-stop financial hub versus a narrow CFD and spread betting offering. Having a multi-asset offering increases flow in the core business.”

CMC has referred to its centralised treasury management division and its global treasury management system as key elements of its efficiency programme.

“Treasury management services is the centralised function that manages and optimises FX, share inventory and cash as well as counterparty exposure,” explains Booth. “We process more than £15 billion of turnover per day, so even the slightest improvement results in meaningful gains. The optimised strategy has returned more than 25% versus our incumbent banking rates whilst reducing concentration with our counterparties.”

One of the few negatives for the last financial year was a drop of £31.8 million in total segregated client money held by the group for trading clients to £517.6 million.

In its Q1 2025 trading update, the firm says good progress is being made on its institutional and B2B strategy, as highlighted by the recent announcement of a partnership with Revolut. The initial onboarding of Revolut clients has commenced, and some clients are now live and trading.

CMC ‘traded in line with management’s expectations during the first quarter of FY25’, and guidance remains unchanged with the expectation of net operating income of £320-£360 million for the full year.