Q3 Interim Management Statement

RNS Number : 1422V

CMC Markets Plc

26 January 2017

 

26 January 2017

CMC MARKETS PLC

Q3 Interim Management Statement

CMC Markets plc, (LSE: CMCX, "CMC" or the "Group"), a leading global provider of online retail trading, today issues its interim management statement for the period from 1 October to 31 December 2016.

The third quarter saw some improvement in client trading activity from the previous quarter, with net operating income for the period in-line with the same period last year. Active clients continued to grow, increasing by 13% from the same period last year to 41,234, although this was offset by lower revenue per client, which was 13% below the same period last year.

The Group continues to make good progress on its strategic objectives with strong growth in active clients, extending its product offering with the launch of 'Knockouts' in Germany and Austria, further growth in its institutional offering and ongoing improvements made to digital channels.

The FCA announcement of 6 December 2016 and subsequent announcements from the German regulator, BaFin (8 December 2016) and the French regulator, AMF (10 January 2017) regarding the marketing and distribution of leveraged products are expected to impact the business when they are implemented.

At this stage, it is difficult to quantify accurately the scale of impact that the proposed regulatory changes will have on client behaviour, and therefore performance of the business, particularly as the final terms and timings of any changes are not yet finalised. 

The Group has always been supportive of a clear and consistent regulatory approach, applicable to all providers, to ensure that client interests are best-served and will continue to work with the AMF, BaFin and the FCA to facilitate this. The Group believes that as one of the longest-established providers in the industry, with a focus on higher-value, experienced clients and client service, that it is well placed to deal with these changes in the competitive landscape.

As the Group enters the final quarter of the financial year, it is not possible to determine whether the recent uplift in client activity that we have seen will be sustained. However, operating costs continue to be well controlled and in-line with guidance.

CEO Peter Cruddas commented, "The regulatory changes that will be implemented later in the year will undoubtedly present the Group with some short- to medium-term challenges as clients and the industry adjust. However, as a well-capitalised and established business with 14 offices globally, a strong institutional offering and a business model that is focused on experienced clients, I believe that in the longer term the Group's competitive position will be strengthened compared to competitors whose business model is more focused towards inexperienced clients.

We are engaging fully with our regulatory bodies, and in principle, we are supportive of a clear and consistent regulatory approach that all providers have to follow to ensure client interests are best served.

We will be evolving our product offer to limit clients' downside risk with the launch of a limited risk account and continue to offer our guaranteed stop loss order.

The focus on developing our Next Generation trading platform including our mobile offering will continue as this is critical to attract and retain higher value and experienced clients.

The sector will clearly continue to be challenging while the structure and timings of the regulatory changes are confirmed. However, we believe our business is well able to adapt and we look forward to continuing our successful development within the new regulatory framework."

Forward looking statements

This trading update may include statements that are forward looking in nature. Forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Except as required by the Listing Rules and applicable law, the Group undertakes no obligation to update, revise or change any forward looking statements to reflect events or developments occurring after the date such statements are published.

Media enquiries

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Notes to Editors 
CMC Markets plc ("CMC"), whose shares are listed on the London Stock Exchange under the ticker CMCX, was established in 1989 and is now one of the world's leading online financial trading businesses. The company serves retail and institutional clients through regulated offices and branches in 14 countries, with a significant presence in the UK, Australia, Germany and Singapore. CMC Markets offers an award-winning, online and mobile trading platform, enabling clients to trade over 10,000 financial instruments across shares, indices, foreign currencies, commodities and treasuries through contracts for difference ("CFDs") and financial spread bets (in the UK and Ireland only). Clients can also place financial binary bets through Countdowns and, in Australia, access stockbroking services. More information is available at http://www.cmcmarkets.com/group

 

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