CMC Markets completes nice turnaround with EBITDA of £51 million, up 260%

But it appears that revenues were down (again) at CMC, after a 21% revenue drop last year.

CMC Markets founder Peter Cruddas, who re-took the reigns as CEO in early 2013, has overseen a nice overhaul of the business and its return to profitability, but is still facing falling revenues.

UK spreadbetting and forex brokerage CMC Markets announced their annual results for the year ended March 31, 2014, noting a marked improvement in profitability over last year.

CMC reported EBITDA of £51.5 million ($86 million), marking a 260% increase over last year, In the 2013 fiscal year CMC reported a 21% decrease in revenues, resulting in a net loss of £2.8 million as well as the layoff of nearly one third of all CMC staff.

but on the top line, things weren’t quite as rosy.

Other than the EBITDA figure, CMC didn’t actually volunteer much in terms of specific financial figures. They did state that they have cash (excluding client cash) of £115 million, and that their EBITDA margin remained above 40%, meaning that their Revenues were likely in the £120-125 million range. That would make CMC’s revenues actually slightly down from last year’s £129 million, but again they positioned themselves to be more profitable off a lower revenue number.

The full CMC press release follows:

CMC Markets continues to strengthen as EBITDA increases by 260%

London, 28 April 2014: CMC Markets plc. one of the leading providers of financial spread betting and CFD trading, announces a strong trading update for the twelve months ending 31st March 2014. The final audited results for the full year will be released by September 2014.

Financial performance
The Group’s financial performance continues to strengthen.

In the twelve month period, the Group has seen a 260 per cent improvement in adjusted EBITDA (earnings before interest, taxes, depreciation, amortisation and bonus costs) to £51.5 million. Its EBITDA margin has remained at the same level as seen in the half-year results at over 40%.

The balance sheet is strengthening even further. Own cash reached £115 million, with minimal debt and a capital adequacy ratio of 233 per cent.

Business developments
The Group has completed its first full financial year under the new management structure. Since Peter Cruddas took over as Group CEO in January 2013, he has been refocusing the business on client service, and building on a strong trading platform. This strategy has strengthened the Group’s financial performance, reinforcing CMC Markets’ appeal to high value active traders.

In addition, this approach has generated 33 industry awards worldwide in the year for the Group for service, platform and education, with the accolade ”2013 UK Financial Services Provider of the Year” from Shares magazine, being one of the highlights.

Peter has introduced a transparent flat line management structure, alongside the rollout of the Next Generation platform to a total of nine overseas offices. Following the rollout, the Group’s award-winning* platform has started to gain significant traction, creating operational cost efficiencies. In March 2014, for the first time, CMC Markets executed over one million trades via mobile devices in one month.

Additionally, the return of the Asia Pacific dealing room from Singapore to Australia, to run alongside the Group’s Australian stock broking business in Sydney, was a major success and has created important synergies between the two dealing rooms.

Commenting on the performance, Peter Cruddas, Chief Executive, said: “These are an incredible set of results for the full year. What is pleasing about these results is that they have come on the back of an improved service to clients, including the global release of our Next Generation platform which provides automated trade execution with some of the most competitive trading spreads in the industry today.

“The team has responded well to the major management changes I have implemented, which have resulted in clearer reporting lines and improved transparency throughout the business. I would like to thank them and the rest of the team for their support and hard work. Now we are all aligned from the top down and the culture is to deliver the best possible service to clients. The team are dedicated, focused and excited about the future and quite frankly so am I.

“Client response to the improved platform and client service has been positive and I would like to take this opportunity to thank clients for their continued support.

“I started this company 25 years ago and we will be celebrating later in the year but I have to say in all my time with the company, this feels like the best yet.”


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