CMC Markets operating costs seen 5% higher, shares tumble

CMC Markets shares tumbled on Thursday after the online trading platform said operating costs were set to be higher than initially expected.

In a brief update for the period from 1 April to 27 July, the company said net operating income for the year-to-date was in line with levels seen in the same period a year earlier.

Active monthly trading client numbers and client assets under administration across both the leveraged and non-leveraged Australian stock broking businesses remain robust, it said.

"The group continues to focus on delivering a strong business performance for its financial year ending 31 March 2023," CMC said. "Nevertheless, the cost environment remains challenging, and the group now expects operating costs to be in the order of 5% above guidance provided at the time of the FY 2022 results."

The jump in operating costs was put down to a combination of higher personnel and non-personnel costs, including higher professional fees and software costs associated with expansion projects, as well as the impact of the weaker pound.

"Progress towards new business growth across all platforms and geographies continues as planned and all expansion initiatives are on track," CMC added.

At 0830 BST, the shares were down 19% at 247.97p.