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03 Apr 2019 | 07:38

CMC Markets downgrades revenue outlook as regulation, choppy markets weigh; CFO to step down

Spread betting group CMC Markets downgraded its outlook on revenues as regulations and choppy markets hurt client activity. The company also said that Grant Foley, Chief Operating and Financial Officer, would be stepping down toto pursue other opportunities. CMC said it expected to report contracts-for-difference and spreadbet revenue of about £110m for FY 2019, 37% lower than the prior year, and net operating income of £131m. The revenue outlook was downgraded from guidance given in February for a decline of between 25% and 35% for the full year. The downgraded guidance comes as the company grappled with reduced client activity following the implementation of the ESMA intervention measures on 1 August 2018, compounded by challenging market conditions during much of fourth quarter of last year.

The new rules required clients to use more of their cash to fund their margin requirements or deposit more funds with CMC to trade at previous levels.

'The Group remains focused on tight cost controls, and expects operating costs for FY 2019 to be marginally lower year-on-year, slightly below previous guidance,' the company said.

'Since the introduction of the new rules, client money has remained strong, and active client and new client numbers have remained stable resulting in the Group having confidence in meeting the consensus FY 2020 outlook'

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