Good morning!

Today we have:

Finished around 5.30pm.

CMC Markets (LON:CMCX)

  • Share price: 136.7p (+8%)
  • No. of shares: 289 million
  • Market cap: £395 million

Interim Results

These are terrific results.

I bought a few of these shares at around 87p in February, but didn't have the conviction to hold on to them, and don't currently have a position. I remain heavily long IG Group (LON:IGG).

But wow, what a performance from CMC.

It has taken me a few minutes to figure out how they did it. Here's the answer, in a table:


Let me explain what's happening here!


  • Net client income is the trading income for CMC from client activity: spreads, financing charges and the like.
  • Net revenue is trading income minus introducing partners commissions and betting levies.

Now let's see what happened:

  • In H1 last year, ESMA trading income was £58.2 million (you'll find that number in the table above).
  • We also know that ESMA trading income fell to £54.6 million in H2 last year.
  • And we know that ESMA trading income fell again in H1 this year, to £49.8 million (also shown in the table above).

Clients (particularly retail clients) are trading much less than they used to, thanks to ESMA's leverage restrictions and other rules.

With client activity falling, you would expect ESMA revenue to fall, too.

But this is not exactly the case!

  • H1 2019 ESMA net revenue: £43.9 million (shown above)
  • H2 2019 ESMA net revenue: £30.5 million
  • H1 2020 ESMA net revenue: £45.6 million (shown above)

If you remember the definition, net revenue is trading income minus introducer commissions and betting levies.

In the last six-month period, CMC has figured out a way to spend many millions of pounds less on CFD introducer commissions, without revenue falling off a cliff.

As you might expect, the number of clients isn't growing…

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