CMC MARKETS PLC | 133 HOUNDSDITCH, | +44 (0)20 7170 8200 | CMCMARKETS.COM/GROUP |
LONDON, EC3A 7BX |
Results Presentation
Half year ended 30 September 2024
21 November 2024
Introduction
Today's Presenters
Lord Peter Cruddas
Chief Executive
Officer
Albert Soleiman
Chief Financial Officer
David Fineberg
Deputy Chief Executive Officer
Key Highlights
Operational delivery driving revenue, margin and profit growth
- Strong financial performance with net operating income up 45%, driven by growth in our institutional business and increased trading across key assets
- Improved profitability with disciplined cost management boosting margins; profit before tax rose to £49.6 million with a robust profit before tax margin of 28%
- Continued technological innovation has led to high-profilepartnerships, including Revolut and ASB Bank
- Successful soft launch of Revolut platform live in three European countries, with plans for phased rollout to additional regions
- Expanded product offerings with enhancements to cash equities and options, alongside upcoming launch of cash ISAs in the UK
- Management remains focused on further diversification of the business, through a balanced investment approach, with a view to delivering long-termshareholder value
H1 2025 Results Presentation | 3
Financial update
Albert Soleiman
Chief Financial Officer
Group Financial Metrics
Strong financial performance demonstrating early success of diversification strategy
Net operating income¹ (£m)
FY23 | FY24 | H125 |
Net revenue mix
14% | 9% | 13% |
86% | 91% | 87% |
FY23 | FY24 | H125 | |
Trading net revenue | Investing net revenue | ||
Profit before tax (£m) & profit before tax margin2 (%)
31% | ||
28% | ||
24% | ||
12% | 65.3 | |
36.6 | (2)% | 49.6 |
15.6 | ||
(2.0) | ||
FY23 | FY24 | H125 |
H1 H2
Basic earnings per share (p)
FY23 | FY24 | H125 |
- Net operating income represents total revenue net of introducing partner commissions and spread betting levies.
- Profit / (loss) before tax margin % is calculated as profit before tax as a percentage of net operating income. Half-on-half profit before tax margins showing small reduction, but year-on-year demonstrating strong growth.
H1 2025 Results Presentation | 5
Financial Metrics: Trading
Significant increase in net revenue, with strong performance across both B2C and B2B segments
Trading net revenue (£m)
Proportionate B2C/B2B split of turnover2
30% | 29% | 31% | 35% | |
38% | ||||
FY23 | FY24 | H125 |
Revenue per active client1 (£)
3,730 | ||||||
2,558 | 2,984 | |||||
2,177 | 1,867 | |||||
FY23 | FY24 | H125 | ||||
H1 | H2 | |||||
70% | 71% | 69% | 65% | |
62% | ||||
H123 | H223 | H124 | H224 | H125 |
B2C B2B
- Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets or who traded on the stockbroking platform on at least one occasion during the period.
- Turnover represents the notional value of client trades.
H1 2025 Results Presentation | 6
Financial Metrics: Investing
Stronger investing performance supported by increase in AuA
Investing net revenue (£m)
FY23 | FY24 | H125 |
Investing net revenue: B2C and B2B mix1
FY23 | FY24 | H125 | |
B2B | B2C | ||
Assets under administration (£bn)
41.1
40.5 | 40.5 |
39.6
37.7
FY23 | FY24 | H125 |
H1 H2
H1 2025 Results Presentation | 7
1. Shift in client mix from H2 2023 is driven by the migration of the ANZ Share Investing client base to CMC. Before migration, revenue from these clients was classified as B2B; subsequently, these clients are classified as B2C.
Income Statement
Group (£m)
Trading net revenue
Investing net revenue
Interest income
Other operating income
Net operating income¹
Operating costs2
Variable remuneration3
Finance costs
Loss on share and impairment of associates
Profit / (loss) before taxation
Profit / (loss) before tax margin4
H1 2025 | H1 2024 | YoY % |
131.3 | 87.4 | 50% |
19.9 | 16.8 | 19% |
23.4 | 16.1 | 46% |
2.8 | 2.3 | 22% |
177.4 | 122.6 | 45% |
(111.4) | (121.9) | 9% |
(12.5) | (1.7) | (>100%) |
(1.4) | (0.9) | (57%) |
(2.5) | (0.1) | (>100%) |
49.6 | (2.0) | n/a |
27.9% | (1.6)% | n/a |
Net operating income
- Net operating income of £177.4 million, up 45% (H1 2024: £122.6 million) and driven by:
- Strong performance in our trading business, with net revenue up 50% to £131.3 million (H1 2024: £87.4 million);
- Investing net revenue 19% higher at £19.9 million (H1 2024: £16.8 million) with strong performance driven by stronger trading of international equities; and
- Interest income up 46%, to £23.4 million (H1 2024: £16.1 million) as we continued to benefit from elevated global interest rates and a strong performance by our newly established treasury management division
Operating costs
- Operating costs excluding variable remuneration, were £111.4 million (H1 2024: £121.9 million), down 9%, as the Group maintains a sharp focus on costs and disciplined approach to investment
- Variable remuneration higher in the period in line with improved levels of profitability
Profitability
Tax | (14.3) | (0.4) | n/a |
Profit / (loss) after tax | 35.3 | (2.4) | n/a |
- Net operating income represents total revenue net of commissions and levies.
- Excludes variable remuneration.
- Includes share-based payments.
- Profit / (loss) before tax margin % is calculated as profit before tax as a percentage of net operating income.
- Strong net operating income performance and disciplined cost management driving increase in profitability and margins, with profit before tax of £49.6 million
- Profit before tax margin of 27.9%, up from (1.6)% at H1 2024
H1 2025 Results Presentation | 8
Liquidity & Regulatory Capital
Regulatory capital
Group (£m) | Sep-24 | Mar-24 |
Capital resources before regulatory adjustments1 | 412.3 | 383.1 |
Less: regulatory adjustments | (75.0) | (43.0) |
Captial resources after regulatory adjustments | 337.3 | 340.1 |
Own funds requirements² ("OFR") | 77.9 | 109.0 |
OFR ratio %³ | 433% | 312% |
Regulatory Capital
- Capital resources were broadly unchanged at £337.3 million with increases in retained earnings for the year being partially offset by the FY24 final dividend distribution and certain fixed income investment deductions
- The OFR ratio of 433% increased from 312% largely due to a reduction in own funds requirements
Net available liquidity
Group (£m) | Sep-24 | Mar-24 |
Own funds | 332.1 | 325.8 |
Non-segregated client and partner funds | 110.9 | 119.6 |
Total available liquidity | 443.0 | 445.4 |
Blocked cash⁴ | (62.9) | (68.5) |
Initial margin requirement at broker | (133.5) | (184.7) |
Net available liquidity | 246.6 | 192.2 |
Liquidity
- Increase in own funds to £332.1m driven by profits for the year, offset by dividend payments and movements in working capital
- Resulting in an overall increase in net available liquidity due to the increase in own funds and a decrease in initial margin
- Common Equity Tier 1 capital - total audited capital resources and profits as at the end of the financial period, less foreseeable dividends.
- The minimum capital requirement in accordance with MIDIFPRU 4.3.
- The OFR ratio represents capital resources after regulatory adjustments as a percentage of OFR.
- Blocked cash relates to cash needed to support regulatory and overseas subsidiaries operational requirements.
H1 2025 Results Presentation | 9
Financial Outlook
Net operating income:
- Remain confident in delivering on guidance set out at the beginning of the year, with net operating income forecast to be in line with external market expectations1
- Remain focused on profit margins by leveraging our size and scale, driving further efficiencies and maintaining a disciplined and balanced approach to investment
Operating costs:
•
•
Ongoing programme to deliver synergies and drive further cost efficiencies across business lines
Continue to expect operating costs, excluding variable remuneration and non-recurring charges, of around £225 million in FY25
FY25 effective tax rate expected to be consistent with FY24 at 28%
1. External market consensus for year ending 31 March 2025 is net operating income of £332.9 million.
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