More than 80% client retention for CMC Markets in Financial Year 2022 Q1

Financial broker CMC Markets has released a trading update for the first quarter of the 2022 financial year. The first update offered is that it has managed to retain over 80% of its client income from the 2021 financial year. 

It has also commented that it expects operating costs to increase year on year; this is mainly due to the increased headcount for the company. CMC Markets is still expecting to bring in a net operating income of more than £330 million for the 2022 financial year. 

The CEO for CMC Markets, Lord Cruddas, commented:

Peter Cruddas, CMC Markets

Peter Cruddas
Source: LinkedIn

I’m pleased with our start to this financial year following a record FY 2021. The team is focused on continuing to provide an excellent service to our clients, both in terms of uptime and providing an innovative, market-leading platform.

Despite the positive outlook in the trading update and from the CEO, CMC Markets is also keen to point out that these are forward-looking statements and that this is not a guarantee for the final financial statement for the year as a whole.

CMC Markets

Although CMC Markets has expressed positive comments around the trading update figures, it still shows negative growth compared to the 2021 figures. The operating income for the company was £409.8 million for the 2021 financial year. This was a 63% increase from the 2020 financial year, which had an operating income of £252 million. If the company were to post an operating income of £330 million for 2022, it would decrease almost 20%. However, it would still be an increase from the 2020 figures.

The profit before tax for CMC Markets was £224 million for the 2021 financial year. A fall in revenue would cause the profit level to fall significantly. With the increased operating costs and a fall in revenue, it could see the profit before tax fall to a level similar to 2020, which was £98.7 million. 

This is something that could impact shareholders. In 2020 the company paid out an ordinary dividend of £0.15 per share. For 2021 this was increased to £0.30.6 per share. If revenues decrease as predicted and expenses continue to rise, this could see the 2022 dividend fall back down to 2020 levels.

CMC Markets recently expanded its range of products with the launch of signature share baskets, designed to highlight company shares which exhibiting similar price behaviour, with good performance and momentum.

Read Also: