CMC Markets - Interim Statement - Comments

The recent developments at CMC Invest Singapore, launched in September 2023, mark a significant step in the company's diversification strategy. This expansion, coupled with an enhanced presence in Dubai, positions the company for regional growth in the Middle East.

Despite this, the company faces challenges with declining active subscribers. This trend, continuing from the post lockdown periods, might reverse if market stability improves.

Financial Performance Highlights:

- Net operating income decreased by 20% to £122.6 million.

- A 338% increase in other income, totalling £18.4 million, primarily driven by higher global interest rates and resultant income from client and own cash balances.

- Operating costs for H1 2024 stood at £121.9 million, an increase from £106.3 million in H1 2023. This includes a £5.3 million impairment related to the development of trading platforms for UK Invest and cash equities offerings, affected by adverse equity market conditions and operational delays.

Outlook:

- The full-year net operating income is projected to be between £250-£280 million.

- Operating costs are expected to be around £240 million, excluding variable remuneration.

The fact that only £5 million of the operating costs have been impaired relating to the development of their trading platforms is concerning. The company has to create operating costs, and will likely continue to do so if it does not increase its active user numbers.

The full interim statement can be found here: https://www.cmcmarkets.com/group/press-releases/cmc-markets-releases-interim-results-for-the-half-year-ended-30-september