CMC Markets PLC (LSE:CMCX, FRA:T8Q) said it entered the current financial year with significant momentum following a year of record performance.
Underlying fundamentals remain robust with overall monthly active client numbers similar to 2021, which were up around a third from pre-pandemic levels. Client assets under management also are at near-record levels.
WATCH: CMC Markets maintain active client numbers which were up by a third from pre-pandemic levels
However, overall market activity has remained subdued through July and August following on from the moderation in activity reported in the trading platform’s first quarter.
Reduced volatility in markets has resulted in lower trading activity across both the newly acquired and existing cohort of clients. Similar trends have been seen across the group’s non-leveraged and leveraged businesses.
Year-to-date client income retention has also been tracking moderately below the targeted 80% although is expected to recover through the remaining seven months of the year based on a reversion towards historical averages in the mix of asset class trading.
As a result, the FTSE 250 firm downgraded its net operating income forecasts for the current year to £250mln-£280mln from £330mln.
Operating costs will continue to track moderately higher year over year albeit partly offset by lower marketing costs, in line with lower activity trends.
CMC highlighted its confidence in the long-term growth opportunities of the business and in further progress on its strategic initiatives, including the ongoing development of the non-leveraged investment platform.
Shares fell 27% to 308.18p on Thursday morning.
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