LONDON (ShareCast) - (Sharecast News) - Online trading group CMC Markets said on Thursday that net operating income rose in the first quarter compared to the previous year, underpinned by higher revenue per active client and an increase in B2B revenues.
In a brief update for the three months to 30 June, the company said that based on its performance year-to-date, it remains confident of meeting current expectations for pre-tax profit of £24.6m for the year to 31 March 2020.

Chief executive Peter Cruddas said: "I am delighted that CMC's first quarter performance has improved on prior year especially as this year's first quarter included the impact of the new ESMA regulatory changes. Client trading activity in our CFD and spreadbet business has now stabilised as clients adapt to the new regulatory changes.

"The group is also benefitting from growth in our institutional B2B business, all underpinned by our technology, platform and strategy of targeting higher valued experienced clients. This is coming through in a higher revenue per active client and an improvement in our B2B revenues for the quarter. "

At 1100 BST, the shares were up 2.1% at 98.10p.

Shore Capital analysts Vivek Raja and Paul McGinnis said: "Given the prior year comparison includes pre-ESMA trading, we regard this as a positive performance with the company reporting a stabilisation in activity in the CFD & spreadbetting business after clients have adapted to the new regulatory environment (i.e. ESMA leverage restrictions).

"However, CMC has not stated the impact of the client P&L to revenues in the CFD & spreadbetting, which following the recent change in risk management strategy, will potentially introduce a greater degree of volatility to revenues, and we may get more detail on this at the interim stage."

RBC Capital Markets said takeaways from the update were "all positive" and reiterated its 'outperform' rating and 120p price target.

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