CMC Markets (LON: CMC) today (Thursday) released its interim results for the first half of the fiscal year 2024, reporting a decline of 20 percent year-on-year in its net operating revenue to £122.6 million. The brokerage operator turned a pre-tax loss of £2 million for the six months with a negative basic earnings per share of 0.8 pence.

Trading Activities Took a Hit

Headquartered in London, CMC Markets is known for its retail forex and contracts for differences (CFDs) brokerage services. It also offers trading of deliverable equities, along with institutional services.

Trading net revenue, which contributed the most to the total operating revenue, dropped 32 percent to £87.4 million between April and September. Net revenue from the investing stream declined 20 percent to £16.8 million. However, revenue from the “other income” stream surged 338 percent to £18.4 million from £4.3 million, predominately driven by increases in global interest rates.

The company was pushed to further losses with an uptick in operating costs, which came in at £121.9 million compared to £106.3 million. The costs include a £5.3 million impairment relating to internally developed trading platforms for its cash equities offerings.

“Despite the subdued market conditions, we have seen continued commitment from our existing clients and positive engagement in our institutional business,” Peter Cruddas, the CEO of CMC Markets mentioned.

Even with the management's optimism, the client trading assets under management at the end of the first half of the fiscal year declined marginally to £501 million from £506 million. The number of active clients also dropped 7 percent to 46,832.

CMC Markets' H1 FY24 financial summary and core KPIs

Outlook Remains the Same

CMC Markets already factored in its performance while lowering its outlook for the fiscal year. It expects its operating income for FY24 to be between £250 million and £280 million, with operating costs of £240 million.

“We continue to widen our trading offering,” the CEO added. “Our geographical diversification has also continued.”

“The power of our technology platform has been central to our ability to expand our offering and provide new products and capabilities for our clients. As these new products come online, we are well positioned to increase synergies across our suite of businesses and drive operational efficiencies.”