6th Jun 2019 08:30
LONDON (Alliance News) - CMC Markets PLC on Thursday said profit in its most recently ended financial year took a hard hit from new European regulations and a reduction in overall client volumes.
In addition, CMC confirmed that Chief Operating & Financial Officer Grant Foley will step down on Friday to pursue other opportunities. The departure was first announced in early April.
At the time, CMC said it will "run a rigorous process" to find a replacement, but a successor was not yet named. Head of Finance Euan Marshall was named interim CFO.
CMC is a spread betting and contracts-for-difference trading platform.
Pretax profit of GBP6.3 million for the year that ended on March 31, down 89% from GBP60.1 million reported a year earlier, as net operating income fell by 30% to GBP130.8 million from GBP187.1 million.
The company explained that it had a "difficult" year due to the introduction of new measures by the European Securities & Markets Authority in July and August 2018, which caused many clients in the UK and Europe to stop trading or trade less.
Revenue per active client was 30% lower at GBP2,068 compared to GBP2,964 a year ago, while the number of active clients declined by 10% to 53,308 from 59,165.
The value of trades decreased by 13% during the year to GBP2.26 billion, as the number of trades fell by 5.7% to 64.5 million.
CMC proposed a final dividend of 0.68 pence, resulting in a full year dividend of 2.03p, down 77% from 8.9p paid the year earlier.
"This has been a difficult period of trading for CMC and our sector, but having now weathered the ESMA transition, we exit this year with renewed confidence in the future," said Chief Executive Peter Cruddas.
"We believe that our strong product offering, client service, technology platform and balance sheet will ensure our ongoing success," added Cruddas.
The stock was trading 1.3% lower on Thursday morning at 88.20p a share.
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