CMC Markets posted a nearly 90 per cent drop in profits in its last financial year, as a combination of regulatory changes and tepid market conditions took their toll on the spread betting group.
The London-listed company on Thursday reported an 89 per cent fall in pre-tax profit to £6.3m for the year to March 31. Net operating income was down 30 per cent at £130.8m. Shares in the group fell 10 per cent in early trading.
CMC has been under pressure over the past year both from low market volatility — which has knocked client numbers as trading opportunities have fallen — and new rules from the European Securities and Markets Authority designed to reduce the risk of retail customers suffering big trading losses, which came into effect last August.
“This has been a difficult period of trading for CMC and our sector, but having now weathered the Esma transition, we exit this year with renewed confidence in the future,” said Peter Cruddas, CMC chief executive.
CMC warned in April that it had experienced a deeper than expected drop in spread betting revenue and said its finance chief would be leaving. On Thursday it said Euan Marshall, currently group head of finance, will take on the CFO role on an interim basis.
The number of trades carried out by the group over the year was down 6 per cent at 64.5m, while their value fell 13 per cent to £2.3tn.