CMC Markets PLC predicts that its annual revenues will rise on the back of it having adjusted to new European rules that had impacted its profit for the year ended March 31.
The U.K.-based company, which offers online trading services, said in a statement that it expects annual net operating income to exceed £170 million in 2020 versus the previous year's £130.8 million and that profit before tax will see a rise stemming from operating leverage in the business.
Trading volumes were impacted by the new rules imposed by EU authorities, which banned the same of binary options to retail customers.
The firm also expects its stockbroking business revenue to climb to roughly £14 million for the fiscal first half of 2020, compared to £5.5 million in the first half of 2019, mainly as a consequence of its white label partnerships in Australia.
The company's active client numbers are down slightly from a year ago. However, changes in its internal business model resulted in higher retained client income and this will likely result in higher net trading revenue from the contracts for difference business to the tune of roughly £85 million— £22 million higher than the £63 million reported in the first half of 2019. Meanwhile, operating costs, excluding variable remuneration, are predicted to be moderately higher than the previous year.
"This time last year we had the uncertainty of regulatory change hanging over the sector and the uncertainty of how clients would react to the changes in minimum margin levels. A year on, we are seeing clients adapting to the new changes and still maintaining their interest in the products and the trading platforms we offer." the firm's CEO, Peter Cruddas, said.
The company's results for the six months ending Sept. 30 will be announced Nov. 21, according to the statement.
