“The thing about tuna clients is not finding them, it’s keeping them,” says CMC Markets (CMCX) founder and chief executive Peter Cruddas, referring to the higher-value customers he wants to cultivate now that regulation has reined in the risky bets smaller fry can make on his trading platform. Mr Cruddas needs a fix, and quick; in the six months to March, revenues from the spread-betting and CFD (contract-for-difference) business cratered by almost half, year on year.
There’s perhaps one sign in full-year results to suggest ‘project tuna’ is starting to work: segregated client money rose nine per cent to £332.4m by the end of March, despite a 10 per cent contraction in active clients. But the company’s suggestion that this is an “indicator of future trading potential” sounds hopeful, particularly when CMC also reports a dearth of event-driven trading opportunities and “range-bound markets”.
Then again, CMC’s business is more balanced “than it has ever been”, as Mr Cruddas tells it. The proof lies in a recent white-label deal with ANZ Bank, which drove an 81 per cent increase in income to the stockbroking business in the period. At £15.5m, this segment made up less than 12 per cent of last year’s top-line, and brings higher costs to the broader group.
The consensus forecast is for earnings of 8p a share in the year to March 2020.
| CMC MARKETS (CMCX) | ||||
| ORD PRICE: | 89p | MARKET VALUE: | £258m | |
| TOUCH: | 87.5-92p | 12-MONTH HIGH: | 210p | LOW: 74p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 45 | |
| NET ASSET VALUE: | 71p | NET CASH: | £46m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015* | 158 | 43.5 | 12.4 | n/a |
| 2016 | 186 | 53.4 | 15.1 | 8.93 |
| 2017 | 188 | 48.5 | 13.7 | 8.93 |
| 2018 | 209 | 60.1 | 17.3 | 8.93 |
| 2019 | 163 | 6.3 | 2.0 | 2.0 |
| % change | -22 | -89 | -88 | -78 |
| Ex-div: | 01 Aug | |||
| Payment: | 06 Sep | |||
| *Pre-IPO | ||||
