CMC Markets raises income expectations on continued ‘positive momentum’

CMC Markets has raised its full-year income expectations after improved market conditions helped the online trading platform in the fourth quarter.

The FTSE 250 firm said in a trading update that it expected net operating income for its 2024 financial year to exceed the top end of its prior guidance of between £290m and £310m.

The news sent CMC’s shares up as much as 13.5 per cent on Wednesday morning to their highest level in a year.

CMC previously raised its guidance in January after recording more activity on its platforms towards the end of last year amid a pickup in market volatility, which sent shares to a four-month high.

The firm said on Wednesday that it had seen “positive momentum” continue in the fourth quarter, highlighting strength in its institutional and B2B business due to long-term investments and a strong pipeline of partnerships.

CMC said development upgrades across its platforms had “continued as planned” and that it had also “widened its trading offering” last month by rolling out over-the-counter options.

The firm added: “Following the launch of mutual funds in H1, [self-invested personal pensions] accounts are set for imminent release on the Invest UK platform, as part of the ongoing enhancement of the long-term savings proposition.”

CMC said its operating costs, not counting variable remuneration and non-recurring items, were expected to be around £240m for the year, in line with guidance.

Despite recent improvements, the firm has struggled over the last 12 months. It issued profit warnings in last March and August, flagging “subdued market conditions”. The firm swung to a loss of £2m, from a profit of £36.6m in 2022, during the first half of the year.

Last month, CMC said it would cut around 17 per cent of its headcount, some 200 jobs, in a bid to “drive efficiencies and control costs”.

The firm added on Wednesday: “With actions taken as part of the cost reduction and efficiency plans outlined in February 2024, the group continues to identify opportunities for further cost savings across the global business as we focus on improving profit margins.”

CMC, which was founded by Tory peer Lord Peter Cruddas in 1989, is due to announce its full-year results on 20 June.