2nd Sep 2021 08:59
(Alliance News) - CMC Markets PLC said Thursday it entered the financial year with "significant momentum" but has seen market activity slow and client income retention "tracking moderately below" its target.
Shares in the contract-for-difference trading platform plunged 26% in London on Thursday morning to 309.00 pence, and are down 21% in 2021 so far.
CMC noted its underlying fundamentals remain "robust" with overall monthly active client numbers at similar levels as reported in its recent first quarter update, staying up around a third from pre-pandemic levels.
Client assets under management remains near record levels, CMC added.
However, it said: "Offsetting this, overall market activity has remained subdued through July and August following on from the moderation in activity reported in the first quarter. Reduced volatility in markets has resulted in lower trading activity across both the newly acquired and existing cohort of clients. Similar trends have been seen across our non-leveraged and leveraged businesses."
CMC also highlighted that year to date client income retention has been tracking moderately below its targeted 80% level. The company, however, expects this to recover through the remaining seven months of the year based on a reversion towards historical averages in the mix of asset class trading.
As a result, CMC now expects financial 2022 net operating income to settle in a range between GBP250 million to GBP280 million. CMC posted net operating income of GBP409.8 million for the financial year ended March 31.
Financial 2022 operating costs will continue to track moderately higher year-on-year, although partly offset by lower marketing costs in line with lower activity trends, CMC added.
By Paul McGowan; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
CMC Markets