London-headquartered CMC Markets (LON: CMCX) announced on Wednesday that it is intending to launch a share buyback program. It plans on allocating £30 million for the program, but the decision is now pending regulatory approval.
“In light of the Company's robust capital position and having considered the ongoing investment in the business, the Board has decided to return excess capital to shareholders via the repurchase of ordinary shares,” CMC stated in the announcement.
“The Buyback Programme should be considered as part of a normal balanced approach to shareholder returns alongside the current dividend policy, which is unchanged.”
In addition, it will release detailed information before it starts dealing under the buyback program.
Major Decisions in the Pipeline
CMC is a major online brokerage platform, popular for offering leveraged trading and spread betting services. It has a global presence and is now expanding beyond its usual leveraged business. Further, it is preparing to launch a new UK investment D2C and B2B platforms next year that will offer investment products and physical shares, among others.
Meanwhile, the Board of the Group is considering splitting its leveraged and non-leveraged businesses. The leveraged division would consist of spreading business and the non-leveraged unit would include technology and new investment products platforms.
Though the talks for the split are still in the early stages, the board believes that it is in the interest of maximizing shareholder value.
Moreover, the latest announcement highlighted that, despite the share buyback program, the broker’s full-year financial guidance would remain unchanged. It lowered the income expectation for fiscal 2022 from more than £330 million to between the range of £250 million and £280 million, Finance Magnates reported earlier.
Furthermore, CMC Group reported a 45 percent decline in its trading revenue from April through September, which is the first six months of fiscal 2022.
