CMC Markets reports 5% lower net operating income for FY2017

CMC Markets reports 5% lower net operating income for FY2017

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CMC Markets, one of UK’s major forex, CFD and spread betting brokers, reported a net operating income of £160.8 million, for the financial year that ended on March 31, 2017. According to the company data, this is 5% less than FY2016’s £169.4 million. CMC Markets attributes those figures to clients trading less often in quieter markets, thus bringing down commission and spread income for the company.

Most other financial performance indicators of the company are also worse than in the preceding year. The profit before tax, for example, stood at £48.5 million, which is 9% less than in FY2016, when the sum was £53.4 million.

The number of trades in FY2017 dropped 6%, to 62.7 million, from 66.8 in the previous financial year. The value of trades, likewise, decreased 3%, to a little over £2 trillion, while the revenue per active client dropped 11%, to £2,517.

“Our first full year as a listed company has been one of progress as we have worked hard to position the Group for future growth. It is disappointing that reduced client activity impacted revenue performance for much of the year, but I am pleased that the strength of our platform, team and service proposition has continued to attract new, high quality clients and our existing clients are putting more money to work with us. We have continued to make excellent headway with our five strategic initiatives in 2017 and signed the biggest institutional transaction in our history, our partnership with ANZ Bank”, said Peter Cruddas, Chief Executive Officer of CMC Markets. “Clearly regulatory change is likely to have some impact on the business but we believe we are well positioned to benefit from market share gains in the medium to long term, with our ability to adapt our leading proprietary technology and focus on client service and regulatory compliance supported by our financial strength.”

The only positive development in CMC Markets’ annual metrics is the number of active CFD and spreadbet clients, which rose 5% on the year, to 60,082.

Nevertheless, CMC Markets notes it has made progress on its strategic goals like increasing

its primary market share in UK and Australia and maintaining market-leading position in Germany. Additionally, the broker achieved geographic expansion with new and expanding offices in Poland and France.

The institutional segment also grew, with the value of client trades increasing 82%.

The final results are much in line with the company expectations announced in March and with the H1 FY2017 results that showed declining profit and trade value, as reported last November.

CMC Markets was set up back in 1989 and now it runs offices in 14 countries across the globe, focusing on the markets in the UK, Australia, Germany, and Singapore. The broker offers trading in more than 10,000 financial instruments, including forex, shares, indices, commodities and treasuries via its proprietary trading platform Next Generation.

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