CMC Markets annual profit rises 61% to £51.9 million, confirms IPO plans

British multi asset CFD and spread betting company CMC Markets Group has today reported a 61% increase in underlying profits before tax to £51.9 million for fiscal 2015 (CMC has a March 31 financial year-end).

The Group has reported that its capital ratio stands at 24 per cent (301 per cent pre CRD IV) with minimal debt and own funds of £141 million, whereas overall net retail clients grew by 11 per cent.

Trade numbers increased by 35 per cent driving a turnover volume uplift of 20 per cent and the company has declared a strong performance for the year to 31 March 2015, exceeding the previous year’s underlying profit before tax by 61 per cent to £51.9 million.

The company has also confirmed its plans to proceed with an IPO on the London Stock Exchange, as initially reported by LeapRate.


Underlying strength

The Group’s strong performance across all divisions has been driven by strong operational and capital management, focussing on client service via the Next Generation platform.

Client strategy: The net number of global retail clients increased 11 per cent year on year, trades by 35 per cent and turnover volume by 20 per cent. CMC Markets’ mobile offering accounted for 35 per cent of total trades

Operational Efficiency: Net revenue increased by 18 per cent to £143.7 million, and cost continues to be well controlled increasing marginally by 2 per cent to £91.8 million. This illustrates the high level of operational gearing and scaleability of the Next Generation platform.

Strong Balance sheet: At the end of March, the Group’s capital ratio was 24 per cent (301 per cent pre CRD IV) and own cash stood at £141 million. As in March 2014, the Group will pay a final dividend and distribute 50 per cent of post-tax profits, representing dividend growth of 33 per cent.

2015 Outlook: The new financial year has started well, April revenues and turnover volume are up 50 per cent and 52 per cent respectively compared to the same period last year. The company is also continually looking to innovate and plan to launch new services and products throughout the year to enhance its offering.

On the back of this the Board have decided to prepare CMC Markets for a London Stock Exchange listing and we are appointing investment banks to assist in the process.

Impact of SNB decision

The decision by the Swiss National Bank to remove the Swiss Franc peg to the Euro did impact the Group results through client debt. The overall impact stands at £4 million. After exceptionals the company will report a statutory profit before tax of £43 million, a 35 per cent improvement on prior year.

2015 Business growth

Investing in talent: The Group has strengthened its teams in France and Germany and plans to open at least two new offices in this current financial year. The Group recently added a new global digital marketing team and a new Chief Commercial Officer.

Enhanced client offering: Another 3,700 products were added to the platform in early May bringing the total offering to over 10,000 products. The Group remains committed to providing its clients with the best service, platform and trading tools in the industry. For example, in March, the Group introduced its Guaranteed Stop Loss offering, with unique refunding of 50 per cent of the premium if the stop loss is not triggered or used, uptake of this enhancement has been very encouraging.

Innovation: Over the coming months, the Group intends to roll out several new product innovations to drive further growth.

Commenting on the performance, Peter Cruddas, Chief Executive, said: “This is my second full year as CEO and I am very pleased with the Group’s performance. We have invested heavily in technology which has delivered a market leading client offering and growth.”

“Despite the sudden decision by the SNB to unpeg the Swiss Franc against the Euro in January 2015 which resulted in extreme market volatility, we have remained strong where many of our competitors were adversely affected by the turmoil. Our strong risk management meant that we saw minimal impact from the SNB decision, and our strong balance sheet and capital ratio are increasingly attracting clients from competitors, as they ‘fly to safety’.”

“CMC Markets is in a good position to attract switchers and new business, our high service standards and Next Generation platform are attracting higher value clients. This can be seen through our early figures for April 2015 which show a 50 per cent increase in revenues and a 52 per cent increase in turnover compared to the same period last year. On the back of this the Board have decided to prepare CMC Markets for a London Stock Exchange listing and we are appointing investment banks to assist in the process.”

“It has been an incredible two years and I love being back at the helm of the business. I would like to thank clients for their continued support and my team for their hard work and commitment. We are all looking forward to exciting times ahead” concluded Mr. Cruddas.

For the official announcement from CMC Markets, click here.

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