15th Nov 2021 08:37
(Alliance News) - CMC Markets PLC on Monday confirmed it is in the "very early stages" of evaluating a separation of the trading services provider between leveraged and non-leveraged divisions.
Following the launch of a business-to-business and direct-to-consumer offering announced back in June, the company has "two strong underlying" units. Leveraged products are contracts-for-difference, while non-leveraged products include shares and investment funds.
"Both businesses have benefited from significant investment and each have strong growth prospects in sizeable markets with excellent competitive positions," CMC explained.
It plans to launch new UK investment D2C and B2B platforms next year. CMC also noted its acquisition, announce back in September, of over 500,000 share investing clients from Australia & New Zealand Banking Group Ltd.
"In this context, and in discussion with its advisers, the board intends to undertake an exploratory review to consider the viability of a managed separation of the group's non-leveraged and leveraged businesses in the interests of maximising shareholder value," CMC said.
On Sunday, Sky News had reported the company would split, with one firm containing its spread-betting offering and another housing its investment product platforms. Both would be listed in London, while only one would carry the CMC branding, Sky said.
CMC said on Monday: "As these discussions are exploratory at this stage, they may or may not lead to a managed separation of these businesses in due course."
CMC said it will start a review before the year end and complete it by June 2022.
The stock was trading 14% higher at 294.00 pence each in London, valuing it at GBP839.3 million. It was the best mid-cap performer in early trade.
Despite Monday's gains, CMC shares are 45% below where they stood at the start of September, just before a profit warning.
On September 2, the company said client income retention was tracking moderately below its targeted 80% level.
It said that for financial 2022, which concludes in March, it expects 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 previous financial year.
By Eric Cunha; [email protected]
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