Major online trading services provider CMC Markets today officially announced its plans to go public on the the London Stock Exchange (LSE). The admission of the company’s shares is scheduled for early February 2016.
CMC Markets plc said today that it intends to apply for admission of its ordinary shares to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange plc.
The Offer comprises:
- an offer of Shares
(i) to certain institutional investors in the UK and other qualifying jurisdictions outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and
(ii) to certain qualified institutional buyers (as defined in Rule 144A under the U.S. Securities Act) in the United States in reliance on Rule 144A or another exemption from or a transaction not subject to the registration requirements of the U.S. Securities Act that are also qualified purchasers (as defined in Section 2(a)(51) of the U.S. Investment Company Act of 1940);
- a Client Share Offer to Eligible Clients of the Group; and
- an Intermediaries Offer, under which Shares are being offered to intermediaries in the United Kingdom, who will facilitate the participation of their retail investor clients resident in the United Kingdom.
As part of the Offer, CMC is expected to raise gross primary proceeds of approximately £17 million to meet Admission and staff incentive plan costs.
Peter and Fiona Cruddas will together remain majority shareholders of CMC upon Admission and have agreed to a 730 calendar day lock-up period in respect of 50 per cent of their interest in Shares held as at Admission, and a 1,095 calendar day lock-up period in respect of the remaining 50 per cent. Each of GSSI and CMC has agreed to a 180 calendar day lock-up arrangement following Admission and the Directors will enter into a 364 calendar day lock-up arrangement following Admission.
CMC in context
·CMC operates globally through regulated offices and branches in 14 countries, with a significant presence in the UK, Australia, Germany and Singapore; in aggregate, the Group has retail clients based in more than 70 countries.
In the six months to 30 September 2015, the Group had 44,017 Active Clients who had traded in the previous 6 months, and the Group processed approximately 45 million and 34 million trades in the financial year ended 31 March 2015 and in the six months ended 30 September 2015, respectively.
Recent financial performance
- Between 31 March 2013 and 31 March 2015, Net Operating Income grew from £107.0 million to £143.6 million at a compound annual growth rate (“CAGR”) of 16 per cent.
- In the same period, Underlying EBITDA grew from £12.8 million to £59.7 million at a CAGR of 117 per cent.
- The Group’s Underlying EBITDA margin increased steadily over this time period, improving from 12 per cent. in the financial year ended 31 March 2013 to 36% and 42% in the financial years ended 31 March 2014 and 2015, respectively.
- Most recently, for the six months ending 30 September 2015, the Group reported Net Operating Income and EBITDA of £78.9 million and £30.1 million, respectively, 34% and 72% ahead of the same period last financial year.
- Continuing the trends the Group reported in its first half results, it has continued to see growth across its key metrics year on year. Market volatility in October and November was not as high as in August and September, but nevertheless the Group performed well, continued to make good progress across its areas of strategic focus and finished the third quarter on track to meet its full year expectations.
- CMC is targeting £250 million of total revenue (before rebates) by the end of the financial year to 31 March 2020 (FY2015: £157.9 million). The Directors believe that there is strong operational leverage in the business although costs are expected to increase moderately in the medium term driven by an increased focus on digital marketing as part of the Group’s growth strategy.
Commenting on today’s announcement, Peter Cruddas, founder and Chief Executive of CMC said:
“Having grown the business from its beginnings in 1989, I am in the privileged position of having seen the market go through many changes. In recent years CMC has benefited from the transformative effect of online and mobile trading on the wider financial Spread betting and CFD markets, and the ability of clients to trade at anytime and anywhere. CMC has been a leading technological innovator in the sector for the last 26 years with a track record of designing and developing technology in-house, the most recent example being our award-winning trading platform, Next Generation, which allows us to deliver a first-class client experience and positions CMC well to capitalise on the trends we are seeing in the fast growing UK financial Spread betting market and the increasingly global CFD market.
Bringing CMC to the public markets will enable us to continue to grow our global brand, build our client base, attract and retain employees and enhance our ability to enable retail traders around the world to trade. Our clients are at the heart of everything we do at CMC and I am delighted that they will have the opportunity to become shareholders in the Group as we embark upon the next stage of our journey.”
Commenting on today’s announcement, Simon Waugh, Non-Executive Chairman of CMC said:
“CMC is a global leader in a rapidly growing market, and embodies the highest standards of client service, technological excellence and robust risk management. Supported by a strong Board with a majority of independent non-executive directors2, we have a management team ready to build on our excellent foundations and offer investors a balance of growth and shareholder returns. I am confident that CMC has an extremely positive future and we look forward to delivering value for all our shareholders as a publicly-listed company.”
CMC notes that its senior management has operated successfully within a well-developed corporate governance framework, with Non-Executive Directors having been part of the wider Board for more than 10 years. The recent appointment of two additional, experienced independent Non-Executive Directors serves to further strengthen the Board and, on Admission, provides a majority independent Board.
You can view the full regulatory filing from CMC Markets by clicking here.