CMC Markets' FY22 Revenue Matches Expectation, Profit Drops 59%.

CMC Markets (LON: CMCX) has generated £281.9 million in revenue in the financial year 2022, which ended on 31 March, the broker reported on Thursday. The figure is in line with the company’s revenue expectations for the year.

Though the broker’s revenue decreased by 31 percent from the previous year when it was largely benefitting from the pandemic-induced volatility, the figure has strengthened by 12 percent since the pre-pandemic levels.

The leveraged business of the broker brought in £229.6 million in revenue, while the non-leveraged trading revenue came in at £48 million. Both of these figures have seen a yearly decline of 34 percent and 12 percent, respectively.

“Excluding the exceptional COVID-19 impacted prior year, which due to market volatility saw unusually significant trading volumes, this is a record net operating income result for the Group,” said the CEO of CMC Markets, Lord Cruddas.

In addition, the London-listed broker earned £92.1 million as pre-tax profits, compared to £224 million in FY2021. That was a year-over-year decline of 59 percent. Moreover, this figure dropped by 7 percent when compared to the pre-pandemic year of FY2020.

The basic earnings per share for the year went down by 60 percent to 24.8 pence.

Trading Metrics

As revealed by the broker, the client statistics last year also witnessed a significant downturn compared to the previous year. It ended the year with 64,243 leveraged active clients, a year-over-year decline of 16 percent. The number of non-leveraged clients was 3,575, again a fall of 22 percent.

While the number of active leveraged clients jumped by 12 percent from the pre-pandemic year, it lowered 5 percent for non-leveraged ones.

Bullish Outlook

The broker is now optimistic that its net operating income is expected to grow by 30 percent over the next three years.

“There is significant opportunity and growth potential in the self‑directing investment platform space, especially in the UK, not just for improved technology but also transaction costs and fees. We believe commissions,execution spreads and custodial fees are too high and too expensive for retail investors,” Cruddas added.

“We will utilize our platform technology, including pricing and execution, to drive down the transaction costs of investments for retail clients, just like we did in Australia where we are the number two investment platform for retail investors.”