CMC Markets: Firm founded by Lord Cruddas sees shares tank
CMC Markets’ share price has nosedived more than 12 per cent after issuing a brief trading update to markets.
In a stock exchange announcement this morning, the firm said it remained “on track” to deliver annual net operating income in line with previous guidance.
“Management also remains confident in meeting its cost guidance of approximately £225m, excluding variable remuneration and non-recurring charges,” the firm added.
Consensus for CMC’s results, which are due out on 5 June, expect net operating income to come in at £333m for the full-year, implying £156m in the second half of the year, compared to the £177m reported for the first half of the year.
Meanwhile, the market is expecting the firm to report profit before tax of £86.1m in the full-year, versus £39.6m for the first half.
Despite a seemingly routine update, the firm’s stock price has tanked 12.5 per cent this morning, bringing shares to their lowest price since April.
In June, CMC Markets announced its first ever fintech partnership, creating a user interface for Revolut customers to trade through CMC, as well as allowing Revolut customers to buy and sell corporate and government bonds through their services.
“The share price has been strong over the past couple of weeks, so to the extent the market was expecting a more positive trading update today (perhaps more news on how the Revolut partnership has progressed), we could imagine weakness today,” said Shore Capital analyst Vivek Raja.
CMC, which was founded by Tory peer Lord Cruddas, saw its share price double between March and November last year, before shares tumbled following its interim results.
“After performing well through most of 2024, CMC shares have underperformed in recent months, which we believe is unjustified,” added Peel Hunt analysts.
The firm had been slowly building back up its share price since November until today, leaving the stock down more than seven per cent in 2025.
“There are good reasons to expect further profitable growth in the coming years, with the business evolving into a more broadly based fintech platform,” the Peel Hunt analysts added.
“We believe the potential profitability of CMC’s core business is underappreciated by the market,” added RBC analyst Ben Bathurst.