Trading platform CMC Markets warned of a slowdown in trading on its platforms today as it revealed profits had fallen beyond 40 per cent in the year to the end of March.
In its full year results today, the FTSE 250 firm run by Tory peer Lord Cruddas said pre-tax profits had fallen 43 per cent to £52.5m in the year to March, while net operating income rose two per cent to £288m, in line with expectations.
Trading net revenues at the firm rose one per cent to £233m in the year to the end of March but the firm said that active trading clients had fallen nine per cent and its active investing clients had fallen 11 per cent.
Investing net revenue at the firm fell 21 per cent to £37.9m as investors sat out of the market amid extreme volatility triggered by war in Ukraine and soaring inflation.
In a statement, the firm said it was ramping up investment in its products to cope with the client decrease.
“The group saw a decrease in active clients across both its trading and investing businesses in 2023. The decrease in investing clients was a result of unfavourable market conditions for long-term investors persisting throughout much of the year, leading to lower overall client activity,” CMC said in a statement.
“On the trading side, the decrease was largely driven by the cohort onboarded during the “meme stock” period in the first calendar quarter of 2021.”
Cruddas said the firm was continuing to ramp up its investment this year.
The slowdown was offset by a surge in net interest income as higher interest rates helped it make cash from customer deposits. Net interest income surged 1,569 per cent to £13.9m.
The update came as CMC revealed it had snapped up a 33 per cent stake in digital asset trading firm Strike X which the two companies said would “transform the way people and businesses invest in digital assets.”
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