11th Jun 2020 10:01
(Alliance News) - CMC Markets PLC on Thursday reported its profit soared, net operating income almost doubled, and the online trading provider boosted its dividend in response.
Shares in the company climbed 16% to 231.10 pence each in London on Thursday morning.
In the year to March 31, total revenue in the year to March 31 rose 80% to GBP298.1 million from GBP166.0 million the year before, with pretax profit surging to GBP98.7 million from just GBP6.3 million.
Net operating income - so revenue excluding introducing partners commissions and levies - jumped 93% to GBP252.0 million from GBP130.8 million.
CMC will pay a dividend of 15.03p per share, multiplied from 2.03p. It was after it recommended a final dividend of 12.18p, itself a sharp rise from 0.68p, at a time when some investors have been starved of payouts as companies bid to save cash during the Covid-19 pandemic.
The market volatility caused by the health crisis has given CMC a boost. Contract for difference gross client income at the start of the new financial year has risen by "around double" annually.
"The heightened volatility and trading activity resulting from Covid-19 has continued into the first quarter of the financial year, and CMC continue to provide clients with market leading trading platforms and client service. I am also confident that, once the financial world returns to more normal conditions, the group will continue to build on the underlying growth that was being displayed prior to the pandemic," Chief Executive Officer Peter Cruddas said.
The company added that it has not furloughed its workforce or trimmed its number of staff in response to the pandemic.
CMC added that it is "well-placed" to cope with looming regulatory changes in Australia.
Back in August, the Australian Securities & Investments Commission set out measures proposing the ban of the sale of binary options and contracts for difference to retail clients.
CMC added: "There remains a regulatory overhang with the Australian Securities & Investments Commission measures, which are not expected to have a material impact in this financial year. We believe we are well placed to be ready to implement these new measures when we are required to do so and with minimal disruption through utilising experience gained from our implementation of European Securities & Markets Authority intervention measures in 2018."
Looking ahead, Chair James Richards added: "Global financial markets have continued to be volatile throughout the start of the new financial year as a result of economic uncertainties resulting from the ongoing Covid-19 pandemic. This has resulted in the group benefiting from higher levels of client trading activity than would ordinarily be expected. I am confident that, as markets and people's lives return to more normalised conditions, the group's focus on its strategic initiatives will continue to deliver revenue diversification and profitable growth for the group."
By Eric Cunha; [email protected]
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