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CMC Markets (CMCX) shares drop as half-year results posted

By Angela Barnes

16:42, 17 November 2021

Businessman looking at stock exchange statistics
CMC Markets reported 45% drop in operating profit for first-half up to 30 September. - Photo: Shutterstock

Shares in CMC Markets were down 9.21% on Wednesday afternoon as the UK-based financial services company published its latest financial results and reported a 45% drop in operating income. 

The company reported its net operating income was at £126.7m ($170.87m) for the half year ended 30 September 2021, compared to revenues of £230.9m for the same period last year.

Moreover, it said leveraged client income retention for the period was at 80% with 53,834 active clients, down 9% compared to the first-half of 2021, and up 29% versus pre-pandemic first-half 2020 levels. Total client money (AUM) in the leveraged business stood at £557m, a new period-end record high.

Company acquisition

The business also announced the acquisition of approximately 500,000 share investing clients, currently trading with CMC through its white label arrangement with Australia and New Zealand Banking Group (ANZ). It said the clients bring total assets in excess of AUD45bn and said the transaction was due to be completed in the next 12-18 months. 

Moreover, the business said it was still operating above pre-Covid levels, as pointed out by Lord Cruddas, CMC’s chief executive.

“I'm very pleased to see the business is operating well above pre-pandemic levels across all our business lines. This is testament to the resilience and quality of our platform and offering. Encouragingly for the future, we closed our first half with client money (AUM) in our leveraged business being maintained close to record highs. It was also encouraging to see active client numbers increase by 10% in our non-leveraged business in support of our diversification strategy.


43,892.90 Price
-1.590% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Oil - Crude

71.41 Price
+2.320% 1D Chg, %
Long position overnight fee -0.0204%
Short position overnight fee -0.0015%
Overnight fee time 22:00 (UTC)
Spread 0.030


16,080.90 Price
+0.500% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 7.0


0.67 Price
-0.820% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

Growth potential

Non-leveraged business continues to offer the greatest growth potential and now represents approximately 50% of trading revenue in Australia and nearly 20% of Group net operating income, according to Cruddas.

“In line with our aim to diversify and grow our non-leveraged earnings, we announced the acquisition of the ANZ Share Investing clients that, when completed over a 12-18 month period, will boost our non-leveraged business with approximately 500,000 clients with total assets in excess of AUD$45bn,” Cruddas said.

Cruddas also highlighted that the company was on a fast track to diversification, using its existing platform technology to win B2B and B2C non-leveraged business.

“This will be further boosted with the launch of our new UK investment platform planned in the early part of the next financial year, which will offer both B2C and B2B potential,” he added.

Read more: Average UK house now costs a record £270,000

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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