CMC Markets hails 'solid' start to year as operating income rises

In an update for the three months to 30 June, the group said its focus on premium clients led to an 8% increase in revenue per active client. As previously guided, it said costs for the full year will be moderately higher than FY18 as it continues to invest in strategic initiatives to drive growth.

CMC also said it continues to expect revenue from elective professional clients to account for at least 40% of UK and European revenues.

The company said it was making good progress developing its white label ANZ Bank in line with its plan.

Chief executive officer Peter Cruddas said: "I am pleased to report that CMC has made a solid start to our financial year. Our strategy of focusing on high value clients, technology and partnerships is supporting the delivery of long term sustainable growth.

"At the same time, we are successfully diversifying CMC's business model into markets where we can leverage our technology, such as through our growing institutional business and stockbroking partnerships in Australia. We are on track to deliver another successful year in 2019."

Peel Hunt said: "In our view, CMC’s focus on high-value professional clients will show regulatory resilience and the shares will re-rate as the market sees the sustainability and attractions of this model."

The brokerage added that the stock's valuation does not consider the attractions of the business including the ANZ deal and the scalability of the well-invested platform.

Meanwhile, RBC Capital Markets, said: "We expect that consensus expectations for FY19 net operating income of £177.4m are likely to remain stable for now (RBC estimate £174.7m), especially ahead of the ESMA regulatory changes which will be introduced in August 2018."

It added that the company's strategy of attracting and retaining high value and experienced clients should help to mitigate the as yet uncertain outcomes from the new ESMA regulations.

At 1430 BST, the shares were down 0.1% to 190.60p.