Institutional clients help CMC Markets report bumper profit

CMC Markets hailed its diversification into the institutional market and the ramping up of its Dubai operation as the reasons behind a spike in profit in its full-year results.

The investment platform, which specialises in spread betting and was founded by the Conservative party donor Peter Cruddas, generated a net operating income of £333m in the year to 31 March, up 15 per cent.

The figure marked a new high for the firm outside the COVID-19 pandemic when interest in retail trading boomed during lockdowns.

The platform’s adjusted profit before tax was also up dramatically, rising by 52 per cent to £80m. Profit before tax was up 21 per cent to £63m.

The UK-based FTSE 250 firm was founded in 1989 originally as a foreign exchange market maker before becoming one of the first companies to offer online trading in the 1990s.

Now, it specialises in spread betting, a form of trading in which participants never own the asset they’re investing in, instead speculating on its future price.

In February, CMC Markets announced it was to cut almost a fifth of its workforce to reduce its cost base, saving an estimated £2.5m this year.

On Tuesday (June 18), it announced a partnership with Revolut that allowed the bank’s customers to buy and sell corporate and government bonds natively on Revolut’s app,

Lord Cruddas, CMC’s CEO, said: “Over the past year, a recovery in client trading combined with our diversification strategy through B2B technology and an institutional first approach has delivered strong growth and opened up many opportunities for the company around the world. 

“This strategy, based on continuous product launches and multiple application connectivity through the CMC Markets Connect brand, means we are making great strides in a huge market segment of B2B and institutional business, with limited competition from our peers.”

CMC Markets’ two main divisions had markedly different performances. Revenue from its trading arm increased by 11 per cent, while its investment arm, hampered by the exchange rate from a weak Australian dollar, was down 10 per cent.

Its other divisions, including its institutional expansion, drove the majority of the growth, surging 128 per cent to £39.7m.

Cruddas added: “It is going to be an exciting couple of years.”