Management at CMC Markets (CMCX) might want to focus on the spread-betting trading specialist's long-term growth goals, but investors were more concerned about a decline in client activity during the first half of the year. Shares in the group have fallen a fifth since this slowdown was first flagged in September. Nevertheless, chief executive Peter Cruddas says the group is on track to meet its 2020 profit goals, maintaining management feels "pretty upbeat" despite a disappointing set of trading figures.
While activity was strong in the week prior to the referendum, investors "sat on their positions" in the following weeks as uncertainty set in, management says. As a result, the number of trades fell 9 per cent to 30.4m, while the value of overall trades was down almost a fifth. This dragged on net operating income. However, there was some good news. The group drew in more active clients, which meant client assets also grew a third to £283m.
Much of this progress is down to the group's five strategic growth initiatives. The value of client trades via its institutional product were up a third and investment in mobile technology helped drive a 15 per cent increase in new account openings.
Analysts at Numis expect adjusted pre-tax profit of £57.9m and EPS of 16.4p for the 12 months to March 2017, down from £62.3m and 17.9p in 2016.
CMC MARKETS (CMCX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 194.3p | MARKET VALUE: | £559m | |
| TOUCH: | 194.3-194.9p | 12-MONTH HIGH: | 294p | LOW: 182p |
| DIVIDEND YIELD: | 6.1% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 62p | NET CASH: | £40m | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 89.1 | 26.5 | 7.2 | nil |
| 2016 | 88.2 | 18.8 | 5.1 | 3.0 |
| % change | -1 | -29 | -29 | - |
Ex-div: 1 Dec Payment: 23 Dec | ||||
