CMC Markets recorded an almost 90 percent drop in profits in its most recent fiscal year, as a combination of regulatory changes and lukewarm market conditions took their toll on the spread betting group.
The London-listed company on Thursday announced an 89% drop in pre-tax profit to Â£ 6.3million for the year ended March 31. Net operating income fell 30% to Â£ 130.8 million. The group’s shares fell 10% at the start of the session.
CMC has been under pressure over the past year both due to low market volatility – which has caused the number of clients to plummet as trading opportunities have dwindled – and the Authority’s new rules. European financial markets designed to reduce the risk of retail clients suffering large trading losses, which came into effect last August.
âIt has been a difficult negotiating time for CMC and our industry, but after getting over Esma’s transition, we come out this year with renewed confidence in the future,â said Peter Cruddas, Managing Director of CMC.
The CMC warned in April that it had seen a larger-than-expected drop in income from betting on spreads and said its CFO was going to leave. On Thursday, he announced that Euan Marshall, currently the group’s chief financial officer, will take on the role of interim chief financial officer.
The number of deals completed by the group during the year fell 6% to 64.5 million, while their value fell 13% to Â£ 2.3 billion.