CMC Markets Outpaces Plus500 with Record Client Revenue

CMC Markets outpaces Plus500 in FY24, achieving record client revenue growth, driven by strategic expansion and effective cost-cutting measures. According to the company’s latest annual results, CMC Markets (LON: CMCX) saw a decline of over 10,000 active customers in FY24 compared to the previous year. However, this modest drop of less than 4% was more than offset by an 18% rise in average revenue per active customer, reaching £4,685. In comparison, Plus500’s average revenue per client was about $3,115, nearly double that of Interactive Brokers and significantly higher than Saxo’s approximately $570 per client.

CMC Markets Outpaces Plus500: FY24 Growth Story

CMC is a prominent global provider of online trading and investing, offering a wide range of retail, B2B, and institutional services across various asset classes. The company’s results for the year ending 31 March exceeded expectations, especially given earlier cautious forecasts. Net operating income increased by 15% to £332.8 million, a notable improvement over the late March 2023 guidance of £290-£310 million, while trading revenue rose by 11% to £259.1 million. Although stockbroking and related services revenue, net of rebates, declined by £3.9 million—primarily due to a weaker Australian dollar—this was more than compensated by a £22.3 million surge in ‘other income’ to £39.7 million.

Cutting Costs

CMC commenced a wide-reaching cost review program in the last financial year. “The significance of this review cannot be overstated,” said Albert Soleiman, chief financial officer at CMC Markets. “We cut headcount by around 220 staff (making up approximately 18% of our global workforce), which was a difficult but necessary step.”

CMC’s Q1 2025 trading update reaffirmed management’s commitment to pursuing further cost efficiencies and margin expansion, especially within the institutional and B2B sectors. In the company’s most recent annual report, CEO Peter Cruddas highlighted the significant progress made in the expansive B2B and institutional market, noting the limited competition from peers. Laurence Booth, CMC Markets’ Head of Capital Markets, emphasized the critical importance of introducing a fully integrated multi-asset, multi-currency platform to support this strategy.

“Not all clients have the same gaps in their product offering, so we endeavour to cover all bases,” he mentions. “We have a strong understanding of the D2C space and, therefore, stay ahead of trending demand for asset types. We have access to every asset class via the same infrastructure, so the operational leverage comes at little to no extra cost.”

Like many of its competitors, CMC benefited from higher interest rates on both its own cash and that of its customers, generating £35 million in interest income last year. Adjusted profit before tax rose to £80 million, up from £52.6 million in 2023, while profit before tax increased by 21% to £63.3 million.

Strategic Gains in FY24

CMC has further diversified its geographical revenue streams, with 56% of net revenue now coming from outside the UK and Europe, up from 49% in 2023. Significant milestones contributing to this expansion include the launch of CMC Invest Singapore and the growth of its Dubai subsidiary in the DIFC. A major driver of last year’s growth was the introduction of new products, including cash equities, index options, cryptocurrencies (with cash crypto trading enabled for Australian clients), and money market investments.

“Cash equities is the number one requested asset class from institutional clients,” says Booth. “There is demand across a broader client spectrum for a one-stop financial hub versus a narrow CFD and spread betting offering. Having a multi-asset offering increases flow in the core business.”

“Treasury management services is the centralised function that manages and optimises FX, share inventory and cash as well as counterparty exposure,” says Booth. “We process more than £15 billion of turnover per day, so even the slightest improvement results in meaningful gains. The optimised strategy has returned more than 25% versus our incumbent banking rates whilst reducing concentration with our counterparties.”

A notable issue for the last financial year was a £31.8 million decline in total segregated client funds held by the group, reducing the total to £517.6 million. Despite this, CMC’s Q1 2025 trading update revealed significant progress in its institutional and B2B strategy, highlighted by a new partnership with Revolut. Initial onboarding of Revolut clients has begun, with some already active and trading. CMC’s performance in the first quarter of FY25 met management’s expectations, and the company’s guidance remains unchanged, projecting net operating income of £320-£360 million for the year.

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