CMC Markets (CMCX) H2 2024 earnings summary

Executive summary

• Achieved record net operating income of £332.8m, up 15% year-over-year, excluding the COVID-19 period, driven by trading growth and higher interest income.

• Strategic transformation continued, shifting from a retail CFD provider to a fintech solutions provider, underpinned by technology, diversification, and B2B partnerships, including a major new partnership with Revolut.

• Major B2B wins, successful product and regional expansion, notably in Singapore, the Middle East, and Europe, and the launch of physical crypto trading.

• Operational efficiencies and a global cost review led to a leaner cost base, with annualized savings of £21m expected in FY25.

Financial highlights

• Net operating income reached £332.8m, up 15% year-over-year, with trading net revenue up 11% to £259.1m and investing net revenue down 10% to £34.0m.

• Adjusted profit before tax was £80m, up 52% year-over-year; reported profit before tax (after one-off items) was £63.3m, up 21%.

• EPS rose to 16.7p (from 14.7p), and the full-year dividend increased 12% to 8.3p per share (50% payout ratio).

• Interest income surged 152% to £35.0m, offsetting a decline in investing net revenue.

• Adjusted operating expenses (excl. variable remuneration) rose 15% to £249.5m, mainly due to wage inflation and non-recurring items.

Outlook and guidance

• FY25 net operating income expected between £320m–£360m; cost base (excl. variable remuneration and non-recurring charges) targeted at £225m.

• Effective tax rate forecasted at 26%, consistent with prior year.

• Business is confident in robust income generation and sustainable margin improvement, supported by new product launches and technology upgrades.