REG - CMC Markets Plc - Final Results
Thu 07:00
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RNS Number : 5493L CMC Markets Plc 05 June 2025
05 June 2025
CMC MARKETS PLC
("CMC" or the "Group")
Results for the year ended 31 March 2025
Underlying EBITDA of £103.4 million, up 12%, PBT of £84.5 million and
advancing Web 3.0 strategy with launch of third vertical
Three vertical future state
· CMC's success has been driven by a two vertical model, combining
our Direct-to-Consumer (D2C) platform with our B2B institutional-grade
Platform Technology as a Service (PTAS)
· The rise of Web 3.0 technologies, including decentralised finance
and tokenisation represents a structural shift in global finance and is the
future state
· In response, we are launching a third strategic vertical:
Decentralised Finance (DeFi) and Web 3.0 capabilities, designed to position
CMC at the forefront of the next generation of financial services
· Key initiatives already delivered include the launch of 24/7
crypto trading, enhanced digital asset treasury and payment capabilities, and
the post-year-end acquisition of StrikeX, bringing native blockchain expertise
and infrastructure in-house
· Our product pipeline is active and ambitious, with further
expansion of 24/7 trading, the development of a multi-asset wallet, and
tokenised access to financial products
· Three vertical model is the future of CMC, underpinning the next
phase of growth and enabling us to become the go-to multi asset platform
across Web 3.0 and Traditional Finance (TradFi)
FY 2025 Financial Performance
Net operating income (£m) 340.1 332.8 2%
Underlying EBITDA (£m) 103.4 92.7 12%
Profit before tax (£m) 84.5 63.3 33%
Profit before tax margin (%) 24.8 19.0 5.8ppts
Basic earnings per share (pence) 22.6 16.7 35%
Ordinary dividend per share (pence) 11.4 8.3 37%
Net operating income represents total revenue net of commissions and levies.
Profit before tax margin % is calculated as profit before tax as a percentage
of net operating income.
· Record net operating income of AU$106.3 million (FY 2024: AU$85.1
million) in Australian stockbroking, with double-digit growth in active
clients and new accounts
· Interest income of £42.5 million (FY 2024: £35.0 million) is up
21%, driven in part by strong performance from our Treasury Management and
Capital Markets division
· Underlying EBITDA up 12% year-on-year to £103.4 million (FY
2024: £92.7 million), reflecting strong underlying profitability alongside
improved operating leverage
· Profit before tax of £84.5 million (FY 2024: £63.3 million),
with margin of 24.8% (FY 2024: 19.0%) reflecting robust net operating income,
disciplined cost management and lower one-off charges
· Operating expenses, excluding variable remuneration, were £230.2
million (FY 2024: £237.9 million) as the Group maintains a focus on
delivering margin expansion
· Non-recurring charge of £4.3 million relating to customer
remediation in Australia following an industry-wide review into margin netting
- provision expected to be fully utilised in FY 2026
· Final dividend of 8.3 pence per share (FY 2024: 7.3 pence) taking
dividend for the full year to 11.4 pence per share (FY 2024: 8.3 pence), up
37% year-on-year
FY 2025 Operational and Strategic Highlights
· Major agreements with Revolut and ASB Bank have solidified CMC's
role as a premier technology partner in banking and fintech, with Revolut set
to expand into new geographies in FY 2026 - paving the way for even greater
global reach
· Launch of 24/7 crypto trading has unlocked an additional 104
trading days per year, supporting vision of round-the-clock market access and
strengthening position in digital asset infrastructure
· UK Cash ISA product is performing strongly, attracting record
levels of client inflows and enhancing our D2C investment offering
· Significantly expanded our product set, now offering listed and
fractional futures and options
· Established new Bermuda office, expanding trading, investment,
and digital asset services, and growing our global footprint
· CMC CapX, our capital markets platform launched in 2022, has
rapidly become a leading force in UK public market fundraising, whilst also
building a robust presence in private capital markets
· Reinforced leadership team with several senior hires, bringing
further expertise to drive the next phase of our growth
· Post-period end acquired majority 51% stake in StrikeX, cementing
CMC's position as a leader in blockchain technology and tokenised financial
products, supporting the development of our third vertical
Outlook
· The rollout of our three vertical model across D2C, PTAS, and
DeFi positions the Group to capture opportunities across both traditional and
decentralised financial markets
· Our strategic vision remains firmly on track, with continued
investment in digital assets, multi-asset trading, and global platform
expansion underpinning long-term growth
· CMC remains self-funded, enabling disciplined investment in
technology, international scale, and next-generation financial products,
without reliance on external capital
· Recent trading conditions have also been supportive, providing
good momentum into FY 2026
· This strategy, anchored by our robust D2C and PTAS verticals, and
strengthened by ongoing investment in DeFi, will drive sustained operational
performance and long-term value creation for shareholders
CEO Statement
Under my leadership, and particularly since our IPO in 2016, CMC has had a
clear, focused strategy for growth as a technology-driven, multi-asset,
multi-platform, financial services provider - delivering results today, whilst
investing for the future and shaping the industry of tomorrow.
Today, CMC is the go-to business for multi-asset, investment products and
platform technology built on two core verticals:
· Platform Technology as a Service (PTAS): Institutional-grade
trading platform technology and execution services to (B2B and B2B2C) through
our open API and white-label solutions, deriving higher turnover and profits
through scale and distribution.
· Direct to Consumer (D2C): Offering a best-in-class multi-asset
trading experience, incorporating platform technology, products, educational
resources, liquidity and execution services.
This two vertical approach enables us to access a broad diverse global client
base spanning institutional, professional, retail traders and investors,
ensuring deep liquidity and varied revenue streams. Our global ambition is to
provide 24/7 execution, liquidity, investing and trading access across
multiple platforms.
However, Web 3.0 technologies, with its emphasis on decentralisation, user
ownership, and transparency, is reshaping how financial products are
structured, accessed, managed and traded, particularly through the influence
of Decentralised Finance (DeFi), tokenisation, and blockchain-based systems.
Web 3.0 is a natural extension of everything we already do - just more
efficient, more accessible, and more scalable.
The advent of Web 3.0 technologies has necessitated the development of our
third vertical: DeFi functionality on blockchain networks. This is a move that
positions CMC to take advantage of the structural changes we are seeing in the
financial ecosystem in the years to come.
Web 3.0 is the natural evolution for CMC and is driving the launch of our
third vertical
· Always On: 24/7, Borderless, Timeless
o Web 3.0 markets don't sleep. They align with CMC's vision for continuous
access across global multi-asset classes and enables seamless participation
regardless of geography, time zone, or banking infrastructure.
· Self-Custody & Digital Ownership
o Web 3.0 will empower our clients to own, manage and trade their assets
directly, with no third-party custody required - integration of cold storage
wallets and DeFi infrastructure will enable clients to hold assets safely and
independently.
· On-/Off-Ramp Infrastructure:
o Clients can fund and withdraw in digital currencies, enabling seamless
access to Web 3.0 markets and unlocking borderless trading. In turn, this will
create new spread-based revenue and supports CMC's role as a digital gateway.
· One-Click Trading Across Chains
o Users can trade any asset, across any chain, with a single click. Our
smart wallet will abstract away all the complexity - gas fees, bridging,
routing - and delivers a clean, all-in net price.
· Tokenisation of Everything
o From equities to real estate, tokenisation turns illiquid, inaccessible
assets into tradeable, divisible tokens. This will enable fractional
ownership, enhanced liquidity, and broader inclusion across both retail and
institutional audiences.
· Integrated Payments & Instant Settlement
o CMC's treasury model is crypto-native: digital asset settlement, on-chain
clearing, and spread opportunities when converting between fiat and crypto. We
are developing a single wallet that lets clients deposit, withdraw, and
pay in crypto, fiat, or tokenised assets, seamlessly. One interface, fully
integrated across on-chain and traditional rails.
· Programmability & Smart Contracts
o Execution logic, yield strategies, and even fund access can be automated
and auditable via smart contracts. This will reduce reliance on
intermediaries, enhances transparency, and cuts cost-to-serve.
Web 3.0 is not optional - it is inevitable
Web 3.0 will transform traditional investing products by introducing tokenised
assets, DeFi platforms, and DeFi models that enhance accessibility, reduce
costs and offer new opportunities. The convergence of Traditional Finance
(TradFi) and DeFi looks to a future where hybrid models dominate, blending Web
3.0's innovation with traditional stability.
DeFi infrastructure is the tech stack that makes transparent, and
permissionless financial services possible, supporting everything from
centralised exchanges to yield farming. As the lines between asset classes and
products blur, CMC will sit at the centre of this transformation - with
technology that empowers, educates and unlocks value for clients and
shareholders.
The advent of Web 3.0 is inevitable. With the launch of our third vertical and
strategic investments in this space, CMC is positioned firmly at the heart of
this major transformation.
DeFi and the three vertical future state
For decades, CMC has been at the fore of innovation, pioneering online trading
in the 1990's and now, we are leading the way once again with DeFi - unlocking
the power of blockchain, tokenisation, and decentralised markets for our
global client base.
Our strategic investment in StrikeX is a cornerstone of our vision. By
securing a 51% controlling stake, completed in May 2025, we are not only
accelerating our DeFi ambitions but also bringing native blockchain talent
directly in-house. StrikeX's expertise in tokenisation, DeFi wallet custody,
and digital asset execution is matched by its team of blockchain innovators
who are now part of the CMC family. This investment goes beyond technology -
it strengthens our internal capabilities and enables us to build a bridge
between traditional and decentralised financial ecosystems.
Web 3.0 is an ecosystem that never sleeps, and I firmly believe that the
future of trading is 24/7, with round-the-clock market access becoming the new
global standard. In FY 2025 we launched weekend crypto trading, adding an
extra 104 trading days to our trading year. This is a central part of my
broader vision for the business where clients can access global markets
seamlessly, anywhere, anytime and without restriction. We are actively
implementing 24/7 access for a wide range of asset classes, including major
indices, commodities, and equities - a shift which represents a transformation
in how financial markets are accessed and traded.
To further support our expansion, we are enhancing our Digital Asset Treasury
& Payments infrastructure, which is now fully crypto-native. This enables
real-time digital asset settlement and on-chain clearing. Our infrastructure
also allows clients to deposit and withdraw in major digital currencies like
USDT, BTC, and ETH, enhancing liquidity and facilitating borderless market
access. This foundation is crucial for unlocking the full potential of DeFi
and ensuring that CMC remains a gateway for digital assets on a global scale.
Looking further into the future, we are developing a Multi-Asset Wallet - a
unified platform where clients can seamlessly manage both traditional and
digital assets. This wallet will integrate cash, equities, crypto, ETFs,
funds, and tokenised assets under one interface, offering real-time
settlement, 24/7 access, and true market fluidity. At CMC we intend to deliver
a single, secure gateway to the entire financial ecosystem, providing clients
with unmatched accessibility and control over their investments.
The introduction of our third vertical - DeFi functionality - will mark a
significant step forward. Whilst this will be transformational for the
business; it is also a natural extension of everything we do, designed to be
more efficient, accessible, and scalable. Alongside our established strengths
in D2C and PTAS, DeFi represents the future of this business and the next
exciting phase of our growth and development.
Embracing the financial revolution
As we enter FY 2026, CMC stands as a well-capitalised, highly cash-generative
business with the vision, technology, strategy, and leadership to deliver the
next phase of growth. Our two vertical model has firmly established us as a
leader in multi-asset trading and technology solutions. Now, with the
introduction of our third vertical, in the form of DeFi functionality, I am
positioning CMC to lead the next wave of innovation.
I have dedicated most of my life to ensuring that CMC remains at the forefront
of financial technology and that commitment is stronger than ever - I am fully
focused and energised on ensuring we stay ahead in a rapidly evolving
financial landscape. I am, and always will be, 100% dedicated to this business
and I have no plans to ever retire, or to sell any of my shares.
With my clear vision and the talented team around me, I am confident CMC will
continue to cement its status as a global leader and world-class financial
technology business in the years to come with me at the helm.
With all the opportunities ahead of us, I am more confident and excited than
ever before.
Lord Cruddas
5 June 2025
Webcast:
An analyst and investor presentation will be held on 5 June 2025 at 9:00am UK
time. Participants need to register using the link below.
CMC Markets plc Full Year Results | SparkLive | LSEG
(https://sparklive.lseg.com/CMCMarkets/events/4587ff91-54de-44d4-ab1e-9331c540e2d2/cmc-markets-plc-full-year-results)
Forthcoming announcement dates:
November 2025
HY 2026
Results
Enquiries
CMC Markets Plc
Dave Fineberg, Deputy CEO
Matthew Lee, Investor
Relations
investor.relations@cmcmarkets.com
Camarco
Geoffrey
Pelham-Lane
cmc@camarco.co.uk
+44 (0) 7733 124 226
Jennifer Renwick
+44 (0)
7928 471 013
Alex
Campbell
+44 (0) 7710 230 545
Forward looking statements
This trading update may include statements that are forward looking in nature.
Forward looking statements involve known and unknown risks, assumptions,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Group to be materially different from any
future results, performance or achievements expressed or implied by such
forward looking statements. Except as required by the Listing Rules and
applicable law, the Group undertakes no obligation to update, revise or change
any forward-looking statements to reflect events or developments occurring
after the date such statements are published.
Notes to Editors
CMC Markets Plc ("CMC"), whose shares are listed on the London Stock Exchange
under the ticker CMCX (LEI: 213800VB75KAZBFH5U07), was established in 1989 and
is now one of the world's leading online financial trading and investing
businesses. The Company serves retail and institutional clients through
regulated offices and branches in 12 countries with a significant presence in
the UK, Australia, Germany and Singapore. CMC Markets offers an award-winning,
online and mobile platform, enabling clients to trade and in invest in over
12,000 financial instruments across shares, indices, foreign currencies,
commodities and treasuries through contracts for difference ("CFDs"),
financial spread bets (in the UK and Ireland only) and, in Australia,
Singapore and the UK, access stockbroking services. More information is
available at https://www.cmcmarkets.com/group.
FINANCIAL REVIEW
The significant investment made across our platforms over recent years, along
with our institutional-first approach and focus on high-value retail clients,
has resulted in continued strong financial performance across our businesses.
Summary
FY 2025 was another year of strong results, with us reporting a statutory
profit before tax of £84.5 million for FY 2025 - an increase of 33% from the
£62.2 million we reported in FY 2024 - aided by increased interest income,
reduced commissions and levies, and the non-recurrence of impairment charges
on intangible assets.
Net operating income increased by 2% to £340.1 million (FY 2024: £332.8
million) but was impacted by periods of weaker trading revenue early in the
second half of the year, which was partly offset by a rebound in performance
towards the end of the year, in part as a result of a revised hedging strategy
we implemented in late January as well as increased volatility. The slightly
weakened trading performance was partially offset by strong stockbroking
revenues, demonstrating the benefits of our dual-track investing and trading
model, which will allow us to generate sustainable and reliable returns in all
market conditions.
We close the year in a position of continued financial strength, with no debt,
a strong capital base, and robust liquidity, underpinned by high cash
generation. Our focus on delivering our strategic priorities positions us for
sustained growth, enabling us to generate attractive returns for shareholders
while delivering benefits to our wider stakeholders.
Trading and investing revenue 313.3 320.1 (2%)
Other revenue 4.3 4.7 (9%)
Interest income 42.5 35.0 21%
Total revenue 360.1 359.8 -
Commissions and levies (20.0) (27.0) (26%)
Net operating income 340.1 332.8 2%
Operating expenses (250.0) (254.9) (2%)
Impairment of intangible assets (0.5) (12.3) (96%)
Operating profit 89.6 65.6 37%
Loss on share of associate (0.2) (0.3) (33%)
Impairment of associate (2.3) - n/a
Finance costs (2.6) (2.0) 30%
Profit before taxation 84.5 63.3 33%
Taxation (22.3) (16.4) 36%
Profit after tax 62.2 46.9 33%
PBT margin 24.8% 19.0% 5.8ppts
Net operating income
Net operating income increased by 2% to £340.1 million (FY 2024: £332.8
million). Trading net revenue continues to make up the majority of net
operating income at 73% of the total, although is down year on year from 78%
as we continue to benefit from the growth in our investing businesses, higher
interest income and a reduction in commission and levies.
Trading net revenue¹ 248.9 259.1 (4%)
Investing net revenue¹ 44.4 34.0 31%
Other revenue 4.3 4.7 (9%)
Interest income 42.5 35.0 21%
Net operating income 340.1 332.8 2%
1 - Trading and investing net revenue represent trading and investing revenue
after deducting commissions and levies.
Trading performance
Our trading business continues to make up the majority of our revenue. The
trading business consists of direct-to-consumer offering, which comprises of
retail and professional traders as well as a business-to-business offering.
Direct-to-consumer (D2C) 149.1 170.0 (12%)
Platform as a service (B2B and B2B2C) 99.8 89.1 12%
Trading revenue 248.9 259.1 (4%)
Where we use external hedges to manage client positions, these are netted
against revenue in accordance with our accounting policy. Given our
significant use of internal hedging, the net cost of hedging cannot be
attributed to individual clients. Instead, these costs, along with other
unallocatable expenses, have been proportionately allocated between customer
types.
We have continued to focus on expanding our Platform-as-a-Service offering,
including progress in our white-labelled proposition, most notably through our
partnership with Revolut. In recent years, we have taken a more selective
approach to direct-to-consumer trading, scaling back marketing investment in
this area - particularly for retail clients - as we focused on more
professional clients. However, looking ahead to FY 2026, we see strong
potential to reaccelerate growth in the retail segment. This will be supported
by key initiatives such as our new partnership with TradingView - the world's
largest charting platform and social trading network, used by over 100 million
traders and investors globally - as well as the launch of our Bermudan
operation.
Our trading revenue is primarily driven by two factors: turnover - the total
notional volume of client trades from which we earn spreads, fees and
commissions - and client income retention, which reflects the proportion of
this income that we convert into revenue. Our business model remains anchored
in robust risk management. In the fourth quarter, we implemented a revised
market risk appetite, increasing our overall risk tolerance following a
detailed review. Under this updated framework, we continue to benefit from
natural hedging, with external hedging now applied more selectively, targeting
specific asset classes or exposures outside defined limits. This change is
expected to be earnings-accretive by lowering hedging costs, though it may
lead to increased earnings volatility.
Investing performance
Direct-to-consumer (D2C) 32.9 24.4 35%
Platform as a service (B2B and B2B2C) 11.5 9.6 20%
Investing revenue 44.4 34.0 31%
Our investing revenues continue to be dominated by our direct-to-consumer
offering in Australia, where we are the country's second-largest operator,
only behind CommSec (part of Commonwealth Bank). This is primarily delivered
under the CMC Invest brand but also via a white-labelled offering.
FY 2025 was a year of record performance for our Invest business. Active
investors increased to 238,656, up 13% year-on-year (31 March 2024: 211,576).
Revenue growth was supported by strong momentum in international share and
cryptocurrency trading. Whilst assets under administration were down 7% to
£37.5 billion (31 March 2024: £40.5 billion), this was driven primarily by
exchange rate movements. On a constant currency basis, assets under
administration were down 1%.
During the year, we signed an agreement with ASB Bank, one of the largest
banks in New Zealand, to provide a white-labelled investment offering.
Although the platform is not expected to be fully operational until late FY
2026, the combination of ASB Bank's extensive customer base and our
technological expertise is expected to strengthen our footprint in the
Australia and New Zealand market and generate additional revenue.
Beyond Australia, we also operate direct retail investment offerings in
Singapore (launched in 2023) and the UK (launched in 2022). While both
currently contribute a small proportion of retail revenue, they are showing
encouraging growth. These markets present attractive long-term opportunities,
and we remain confident in their potential.
In the UK, the cash ISA product launched during the year has gained meaningful
traction despite minimal marketing. By bringing customers onto the platform,
we aim to highlight our broader investment proposition, including general
investment accounts, stocks and shares ISAs, and self-invested personal
pensions. Uptake of these products is expected to increase as interest rates
decline.
Interest income
Interest income accounted for 12% of total revenue in FY 2025, up from 10% in
FY 2024, as we continued to benefit from high levels of client balances and
improved the management of, and returns on, our own funds.
During the year, we focused on enhancing returns on our own balances through
the newly established Treasury Management and Capital Markets Division, as
interest rates began to ease from recent highs. This resulted in a 65%
increase in income on own funds, rising to £18.5 million (FY 2024: £11.2
million). Given the reduction in interest rates during the year and the softer
near-term outlook, this remains a priority area to ensure our balance sheet is
delivering optimal returns.
Net interest income on client balances increased marginally to £24.0 million
(FY 2024: £23.8 million), aided by continued high levels of segregated client
balances which totalled £694.9 million as at 31 March 2025 (31 March 2024:
£542.0 million), which are off balance sheet.
Operating expense
Operating expenses decreased by 2% year-on-year to £250.0 million (FY 2024:
£254.9 million), reflecting modest reductions in staff costs, occupational
expenses and sales and marketing, which helped offset an increase in
information technology costs. We continue to maintain a strong focus on cost
discipline, ensuring operational leverage is maximised.
Staff costs remain the largest component of operating expenses. Including
variable remuneration, staff costs declined by 4% to £113.7 million (FY 2024:
£118.5 million). Fixed remuneration fell by 7% to £93.9 million (FY 2024:
£101.5 million), reflecting the redundancies made at the end of the prior
year. This reduction was partially offset by a 16% increase in variable
remuneration, which rose to £19.8 million (FY 2024: £17.0 million), in line
with improved performance outcomes.
We continue to manage headcount carefully, with the average number of
employees over the year reducing to 1,068 (FY 2024: 1,181). This has been
achieved while continuing to invest in key areas of the business. While the
salary inflation pressures experienced in FY 2024 have eased, we continue to
face cost headwinds, including the impact of changes to employer National
Insurance contributions in the UK.
Non-staff costs declined slightly year-on-year. As a fintech business,
information technology remains the largest component of our non-staff costs,
which increased by 17% to £46.4 million (FY 2024: £39.7 million) as the
Group continued to invest in enhancing and supporting its front- and
back-office systems.
Sales and marketing expenses fell by 6% to £33.5 million (FY 2024: £35.6
million), reflecting a shift towards more targeted marketing campaigns.
Looking ahead to FY 2026, we intend to increase marketing investment as part
of our growth strategy, particularly in the retail segment.
Operating expenses for FY 2025 include a one-off charge of £4.3 million
relating to customer remediation in Australia, following an industry-wide
regulatory review into margin netting. This provision is expected to be fully
utilised in FY 2026, with affected customer accounts credited accordingly.
As we enter FY 2026, we will maintain a disciplined approach to cost
management to ensure our operating model remains appropriately sized to
support the business. Further opportunities are expected to emerge to reduce
the underlying cost base, while continuing to invest in areas that support
growth and drive operational efficiency. The focus will remain on both staff
and non-staff costs, including ensuring we have the right talent in the right
locations. This will include an expansion of offshore capabilities to reduce
reliance on higher-cost locations. In parallel, we will look to rationalise
non-staff expenditure through improved supplier negotiations, consolidation
and a greater focus on value for money. These efficiencies will allow
resources to be redirected into strategic growth areas.
Impairment of intangible assets
Our impairment charge on intangible assets reduced significantly from £12.3
million in the prior year to £0.5 million in the current year, as the
one-off charge previously recognised in relation to our CMC Invest platform
did not recur.
Investments in associate
In September 2024, we fully wrote down our investment in StrikeX, a
customer-centric blockchain solutions business acquired in June 2023. This
accounting adjustment reflected the ongoing financial performance of the
investment and the continued operating losses incurred.
Despite this, we remain supportive of Strike X and its strategic objectives,
and continue to see long-term value in its underlying technology as part of
our decentralised finance build-out. In May 2025, we increased our
shareholding in Strike X to 51% following an agreement with its existing
shareholders. As a result, we assumed control of the business, allowing for
deeper integration and strengthening its ability to leverage Strike X's
blockchain capabilities as it develops crypto and tokenisation solutions.
Taxation
Our total taxation for FY 2025 was £22.3 million (FY 2024: £16.5 million),
which equates to an effective tax rate of 26.4%, up from 26.0% in FY 2024.
Profitability and earnings
The combination of the above factors drove a 33% increase in profit before tax
to £84.5 million (FY 2024: £63.3 million) and earnings per share (both basic
and diluted) to 22.6 pence (FY 2024: 16.7 pence). This also translated to an
increased profit before tax margin of 24.8% (FY 2024: 19.0%), as we continued
to benefit from enhanced operational leverage.
Financial position
Fixed assets 53.2 57.5 (7%)
Trade and other receivables 147.7 164.8 (10%)
Financial investments 111.0 50.9 118%
Amounts due from brokers 140.0 228.9 (39%)
Cash and cash equivalents 247.7 160.3 55%
Other assets 32.4 54.5 (41%)
Total assets 732.0 716.9 2%
Trade and other payables 253.6 272.8 (7%)
Amount due to brokers 12.2 7.0 74%
Obligations under repurchase agreements 7.5 - n/a
Lease liabilities 14.3 16.9 (15%)
Other liabilities 26.4 16.7 58%
Total liabilities 314.0 313.4 -
Total equity 418.0 403.5 4%
Total equity and liabilities 732.0 716.9 2%
Fixed assets declined by 7% since the year-end, reflecting our progression
beyond the peak of our recent investment cycle. Amortisation and depreciation
now exceed capitalised expenditure, although we continue to allocate resources
to maintain and enhance our product and platform capabilities.
Financial investments increased by 118% to £111.0 million (31 March 2024:
£50.9 million), driven by a rise in equity positions to support client
trading activity and a strategic shift towards investment-grade corporate
bonds, the majority of which are short-dated. This new investment strategy,
developed by our Treasury Management and Capital Markets Division, aims to
generate improved yields relative to traditional cash holdings and government
securities.
Despite the increased allocation to financial investments, we also reported a
55% rise in cash and cash equivalents to £247.7 million (31 March 2024:
£160.3 million), reflecting our strong cash generation and a reduction in
amounts due from brokers as we undertook less external hedging.
Other assets decreased from £54.5 million to £32.4 million, primarily due to
a £12.2 million reduction in crypto-assets. These had previously been used to
hedge client positions but were disposed of following a revision to our
hedging strategy.
Regulatory capital
The Group and its UK-regulated subsidiaries fall within the scope of the FCA's
Investment Firms Prudential Regime ("IFPR"), with the Group's German
subsidiary, CMC Markets Germany GmbH, subject to the provisions of the
Investment Firms Regulation and Directive ("IFR/IFD").
Our total capital resources increased to £363.7 million (2024: £340.1
million), with increases in retained earnings for the year being partly offset
by the proposed final dividend distribution. At 31 March 2025, we had a total
OFR ratio of 272% (2024: 312%). The decline in the OFR ratio was due to an
increase in own fund requirements to £133.6 million (2024: £109.0 million).
The following table summarises our capital adequacy position at the year-end.
Group own funds resources and requirements
Common equity tier 1 capital before regulatory adjustments(1) 412.4 383.1
Less: regulatory adjustments(2) (48.7) (43.0)
Common equity tier 1 capital after regulatory adjustments 363.7 340.1
Own funds requirements ("OFR")(3) 133.6 109.0
Total OFR ratio (%)(4) 272% 312%
1 - Total audited CET1 capital resources as at the end of the financial year
of £435.0 million, less proposed dividends. 2 - Regulatory adjustments
include the deduction of deferred tax assets. Deferred tax assets are the
net of assets and liabilities shown in note 8 of the financial statements. 3 -
The minimum capital requirement in accordance with MIFIDPRU 4.3. 4 - The OFR
ratio represents common equity tier 1 capital as a percentage of OFR. CMC
Markets plc has no additional tier 1 or tier 2 capital.
Liquidity and funding
Funding
Our primary source of funding is equity, which includes our equity capital
resources, retained profits and any unrealised gains or losses on open hedging
positions.
We also receive title transfer funds ("TTFs") from professional clients and
eligible counterparties (as defined in the FCA Handbook) under a title
transfer collateral agreement ("TTCA"). Under these agreements, full ownership
of such funds is unconditionally transferred to us. Clients are not required
to sign a TTCA to be treated as a professional client; in these cases, funds
remain segregated. We consider TTCAs to be an ancillary source of funding. All
cash received from segregated clients is excluded.
In addition, we have access to a committed facility of up to £55.0 million,
available to fund margins posted at brokers to support our trading activities.
The facility consists of a one-year term facility of £27.5 million (2024:
£27.5 million) and a three-year term facility of £27.5 million (2024: £27.5
million). The maximum amount available at any time is dependent upon initial
margin requirements at brokers and margin received from clients. There was no
drawdown on the facility as at 31 March 2025 (2024: £nil).
Liquid assets
We have deployed our funding to support our business activities and to
maintain appropriate buffers of liquid assets. Funds deployed to support the
business primarily consist of margins maintained with our brokers to support
trading activity, and "blocked cash" held in subsidiaries to meet local
regulatory and exchange requirements. Liquid assets are held to meet future
liquidity needs, serve as a contingency, and satisfy regulatory requirements.
Our Total Unencumbered Liquid Assets ("TULA") include cash and cash
equivalents, funds in excess of margin requirements held with brokers, and
financial investments after haircuts.
Group funding sources and liquid assets
Equity 418.0 403.5
Obligations under repurchase agreements 7.5 -
Own funds requirements ("OFR") 117.7 119.6
Total Available Funding 543.2 523.1
Less: non-current assets net of liabilities (47.0) (53.4)
Less: Other non-liquid assets net of liabilities 1.5 (29.6)
Less: blocked cash (74.0) (68.5)
Less: initial margin requirement at brokers (92.2) (184.7)
Less: hair cuts on financial investments (29.1) (4.6)
Less: Other encumbered financial investments (8.8) -
Total Unencumbered Liquid Assets 293.6 182.3
Dividend
The Board has proposed a final dividend of 8.3 pence, in addition to the 3.1
pence we paid as an interim dividend, reflecting our policy of paying out 50%
of full-year profit. We continue to maintain this policy based on our strong
cash generation and our commitment to rewarding shareholders and returning
excess capital as part of our capital allocation strategy. This approach is
balanced with a focus on ensuring capital stability to support ongoing
investment and regulatory requirements.
Outlook
We enter FY 2026 from a position of continued strength, with strong capital
and liquidity foundations, no debt, and a proven, diversified business model
that allows us to generate consistent performance in a range of conditions.
In trading, our revised risk appetite and hedging strategy are expected to
enhance earnings efficiency, while renewed investment in retail - including
our partnership with TradingView - will support growth in this segment.
In investing, we expect continued momentum in Australia and New Zealand,
driven by scale, product innovation and new partnerships, including the
upcoming ASB Bank launch. In the UK, the outlook remains encouraging, offering
attractive long-term potential.
We will maintain tight cost control while continuing to invest in growth,
operational efficiency and platform capability. Our strong balance sheet and
active capital management give us flexibility to pursue opportunities while
delivering value to shareholders.
PRINCIPAL RISKS
Our Risk Management Framework provides a consistent approach to identifying,
mitigating, and managing risks, which is essential to achieving our strategic
objectives. Given the nature of our business and the financial, market and
regulatory environments in which we operate, we are naturally exposed to
strategic, financial and operational risks. While it is not possible to
eliminate all risks, effective risk management ensures they are managed to an
acceptable level.
To support the Board in discharging its risk oversight responsibilities, we
have an Enterprise Risk Management ("ERM") Framework in place. This framework
aligns risk identification, mitigation and management with our risk appetite.
It is regularly reviewed-along with our risk tooling and resources-to ensure
it remains effective, in line with market practices and regulatory
expectations.
Governance and oversight
The Board, through the Group Risk Committee, is responsible for defining and
overseeing our risk strategy. Key responsibilities include:
· Monitor, review and advise the Board on the Group's overall risk
appetite, tolerance and strategy alongside current and prospective risk
exposures.
· Monitor and review the effectiveness of the Group's risk
management and internal control systems.
· Monitor the adequacy, effectiveness, design and implementation of
the Group's processes and procedures to manage risk and the internal control
framework and carry out a review of its effectiveness.
· Monitor the ability of the Group's risk management and internal
control systems to identify the risk facing the Group and ensure that a robust
assessment of the emerging and principal risks has been undertaken.
Risk management is a core responsibility of all colleagues, with oversight
provided by Management and Board Committees, as well as the Group Risk and
Compliance functions.
The ERM framework follows the Three Lines Model, ensuring clear risk ownership
and accountability:
· First Line: Business teams manage and implement controls.
· Second Line: Group Risk and Compliance provide oversight and
guidance.
· Third Line: Internal Audit provides independent assurance.
The Board has implemented a governance structure suited to an online financial
services group, aligned with our strategic objectives and product offerings.
This structure is regularly reviewed, with any changes requiring Board
approval. Additionally, we conduct root cause analysis to enhance processes,
improve resilience and embed strong corporate governance practices across the
Group.
Risk culture
We foster a risk culture that emphasises accountability and proactive risk
management. Responsibility for managing risk sits with everyone across the
Group.
Our second line of defence, led by the Risk Team, plays a key role in
embedding this culture. Their responsibilities include communicating,
educating and providing guidance on the ERM framework, and overseeing the Risk
and Control Assessment ("RACA") process, which forms the foundation of our
bottom-up risk assessment.
The RACA process supports a comprehensive understanding of risks and controls
at the operational and business process level. By enabling self-review of
risks and controls, as well as the oversight and escalation of issues where
necessary, it allows risk and control owners to identify any gaps in the risk
environment and address control weaknesses.
Risk appetite and principal risks
Our risk appetite defines the level and types of risks we are willing to
accept in pursuit of our strategic objectives. This is assessed as part of our
Risk Appetite Statement, which integrates risk tolerances across the
organisation. Risk appetite is fundamental to effective risk, capital and
liquidity management, ensuring appropriate risk control and positive client
outcomes.
The Board oversees and considers the annual assessment of emerging and
principal risks, which is conducted by senior management. This assessment
evaluates the potential impact of these risks on the Group's business model,
performance, capital, and liquidity. These risks are monitored through key
risk indicators ("KRIs") and are linked to our risk appetite. We also consider
reputational and regulatory implications, client impact and broader market
effects.
Our principal risks are outlined in the following pages. These have been
streamlined from the prior year to provide greater clarity and focus, while
maintaining a comprehensive view of the key exposures facing the business.
Business and strategic risks | Risks arising from the nature of our business,
strategy and operating model
Emerging risks
We see emerging trends from demographic and social shifts, including evolving
customer expectations and behavioural trends. These include growing demand for
self-directed investing, interest in digital assets such as crypto and
increasing appetite for wealth management solutions. As part of our strategy,
we aim to design and deliver products that are aligned to these changes while
ensuring they are appropriately governed, risk-managed and commercially
viable.
Strategic risk
Key risk description Key mitigations and controls
The risk that our ability to execute our business strategy is impacted by We manage strategic risk through:
internal decisions or external factors. This includes risks associated with
defining and delivering strategic initiatives, as well as potential · Governance & Oversight - Strong challenge and oversight from
reputational damage affecting market perception, client trust and regulatory independent Non-Executive Directors.
relationships.
· Strategic Alignment - Ensuring all significant initiatives align
Risk exposure and appetite with the corporate strategy.
We are exposed to, and have appetite for strategic risk through the execution · Risk Assessment - Evaluating risks associated with strategic
of our strategic initiatives where there is a risk of failing to successfully initiatives before execution.
deliver what we set out to achieve.
· Accountability & Ownership - Assigning clear responsibility
As part of our strategic risk, we are also exposed to potential damage to our for delivery and risk mitigation.
brand and reputation with the market, clients and regulators. Failure to
manage reputational risks could significantly impact our ability to implement · Product & Initiative Governance - Requiring Board approval
our strategic plan. for all material products and strategic initiatives.
During the year, enhanced focus on our key strategic priorities has · These measures ensure a structured approach to strategic
strengthened how we deliver on our strategic goals. decision-making and risk management.
Financial risks | Risks arising from our exposure to market movements,
liquidity, credit and capital management
Emerging risks
Geopolitical and macroeconomic developments are a potential emerging risk that
could materially impact the business, although broader market volatility is
typically beneficial. In response, we monitor our client margin, market risk
limits, broker exposures and entity-level capital as well as our strategic
plans to ensure we remain within risk appetite.
Market risk
Key risk description Key mitigations and controls
The risk that the value of our residual portfolio decreases due to market We manage market risk through:
fluctuations, including price movements, interest rates and foreign exchange
rate changes. · Real-Time Exposure Management - Trading risk management monitors
and controls inherited exposures from clients in real-time within
Risk exposure and appetite Board-approved limits.
As an online trading provider acting as principal to clients across different · Market-Making in Liquid Instruments - Primarily acting as a
markets, we are exposed to financial risks arising from market movements. We market maker in highly liquid financial instruments, enabling efficient risk
have appetite to retain some market risk, balanced with a low appetite for reduction via prime broker arrangements.
liquidity and capital risk, to ensure effective risk management and financial
stability. · Stress Testing & Scenario Analysis - Conducting regular
stress testing to assess financial and capital adequacy impacts from severe
market events.
· Liquidity & Funding Monitoring - Actively managing market
risk with close oversight of funding requirements to maintain liquidity
stability.
· These measures ensure we effectively manage market risk while
maintaining financial resilience.
Liquidity risk
Key risk description Key mitigations and controls
The risk that we have insufficient liquidity to meet our financial obligations We minimise liquidity risk through:
as they fall due, or can only secure required liquidity at excessive cost.
This includes funding margin requirements, failed settlements or market events · Liquidity Modelling & Stress Testing - Regular
that impact liquidity availability. forward-looking liquidity forecasting under both normal and stressed
conditions to ensure obligations can be met.
Risk exposure and appetite
· High-Quality Liquid Assets & Funding Diversification -
We are exposed to liquidity risk through our core business activities, Maintaining unencumbered, high-quality liquid assets and diversified funding
including funding margin requirements for hedging strategies and managing sources.
unfunded commitments in the matched principal business. We have a low appetite
for liquidity risk and maintain a robust framework to ensure we remain · Contingency Planning - Establishing liquidity facilities,
well-funded under both normal and stressed conditions. contingency funding levers, and wind-down strategies where necessary.
· Market Condition Monitoring - Assessing liquidity impacts of
significant market moves to ensure resilience.
· For our Matched Principal and Exchange-Traded Business,
additional controls include:
· Offering only liquid assets based on an asset suitability
assessment.
· Producing daily cash position reports covering surplus liquidity,
unencumbered liquidity, and short-term forecasts.
· Conducting stress testing to ensure sufficient liquidity for
business continuity over a 15-month horizon.
Credit and counterparty risk
Key risk description Key mitigations and controls
The risk of financial loss arising from a counterparty failing to meet its We manage credit and counterparty risk through:
obligations as they fall due, including exposure to both clients and financial
institutions. · Margin Requirements & Risk-Based Controls - Applying a tiered
margin structure to manage riskier positions and utilising liquidation
Risk exposure and appetite features when client total equity falls below predefined thresholds.
We are exposed to credit and counterparty risk through our client trading · Guaranteed Stop Loss Orders - Offering clients risk management
activities and relationships with financial institutions. We have a moderate tools to prevent debt accumulation.
appetite for such exposures and actively manage them through stringent
controls and mitigants to minimise potential losses. · Credit Risk Modelling & Stress Testing - Setting limits and
using potential credit risk exposure models to quantify and stress-test client
credit risk across CFDs and Spread Bets.
· Counterparty Creditworthiness Reviews - Conducting at least
annual assessments of counterparties' financial stability.
· Diversification & Concentration Risk Management - Engaging
with multiple prime brokers ("PBs") per asset class to reduce concentration
risk.
· Investment-Grade Counterparty Standards - Preferring to work with
counterparties holding investment-grade credit ratings, with daily exposure
monitoring.
· Intermediary Limits & Oversight - Setting and monitoring
intermediary limits daily, with escalation procedures for large exposures.
· These measures ensure credit and counterparty risks are actively
managed to protect the firm's financial stability.
Capital and solvency risk
Key risk description Key mitigations and controls
The risk that we do not maintain sufficient capital to meet regulatory We minimise capital and solvency risk through:
requirements, absorb financial shocks or support business growth. This
includes risks arising from market volatility, regulatory changes and adverse · Capital Planning & Forecasting - Regular stress testing and
business performance impacting capital adequacy. scenario analysis to assess capital adequacy under adverse conditions.
Risk exposure and appetite · Regulatory Compliance - Maintaining capital levels above
regulatory minima and engaging proactively with regulators on capital
As a regulated financial institution, we are required to hold sufficient requirements.
capital to meet both regulatory and internal thresholds. We have a low
appetite for breaching capital requirements or operating with insufficient · Liquidity & Risk Management - Ensuring adequate liquidity to
buffers. Effective capital management ensures our financial stability and absorb market shocks and financial stress.
resilience under stress scenarios.
· Robust Governance - Ongoing monitoring by senior management and
the Board to ensure capital strength and strategic alignment.
Operational risks | Risks arising from our people, processes, systems and
external service providers
Emerging risks
We monitor emerging regulatory developments and technological advancements,
including the rise of artificial intelligence and broader digital disruption.
These trends have the potential to reshape how financial services are
delivered and consumed. As part of our strategy, we aim to adapt our
platforms, processes and product offerings to remain compliant, competitive
and aligned to evolving client expectations.
Financial crime
Key risk description Key mitigations and controls
The risk of money laundering, terrorist financing, sanctions violations, We mitigate financial crime risk through:
bribery, corruption and failures in Know Your Customer ("KYC") procedures,
which could lead to regulatory penalties, financial losses or reputational · Risk-Based KYC & Due Diligence - Applying rigorous KYC
damage. procedures, including Enhanced Due Diligence ("EDD") for higher-risk clients
such as Politically Exposed Persons ("PEPs").
Risk exposure and appetite
· Ongoing Monitoring & Surveillance - Maintaining risk-based
As a financial institution handling significant volumes of client data, money transaction monitoring and customer activity surveillance systems.
and assets, we are exposed to financial crime risks, including money
laundering and market abuse. The short-term nature of some client · Suspicious Activity Reporting - Enhancing procedures for
relationships further heightens this exposure. We have a low appetite for detecting and reporting suspicious activity to law enforcement and regulators.
financial crime and implement robust preventative and detective controls to
mitigate these risks. We continuously enhance our framework through process · Market Abuse Prevention - Strengthening controls to mitigate
improvements, system investments and staff training. risks from repeat offenders of market abuse.
· Sanctions & Restrictions Management - Maintaining a
restricted list of individuals and entities, with systems to block
transactions that breach regulatory guidelines.
· Risk Classification - Classifying customers and entities at
onboarding to assess financial crime risks effectively.
· These measures ensure compliance with financial crime regulations
and protect the integrity of our business.
Information security and technology risk
Key risk description Key mitigations and controls
The risk of data breaches, unauthorised access, system outages and technology We minimise these risks through:
failures, including non-compliance with security and regulatory requirements.
This encompasses client, employee and proprietary data, as well as critical · Data Security & Access Controls - Enforcing least privileged
systems, hardware and networks. access, regular system access reviews, and data classification to protect
sensitive information. Physical security measures prevent unauthorised access
Risk exposure and appetite to buildings and sensitive areas.
As a fintech company, we are exposed to significant information security and · Technology Resilience & Monitoring - Investing in a robust
technology risks. We have a low appetite for data loss, misuse or system technology stack, systemic monitoring tools to detect downtime or performance
failures that impact operations or client services, and we mitigate these issues, and maintaining scalable infrastructure to accommodate growth and
through robust preventative and detective controls. fluctuations.
· System Stability & Incident Response - Ensuring IT production
support, proactive system capacity planning, and contingency measures to
prevent and remediate failures.
· These measures ensure the confidentiality, integrity, and
availability of our systems and data, safeguarding clients, employees, and
business operations.
Compliance risk
Key risk description Key mitigations and controls
The risk of failing to comply with legal and regulatory obligations, which We minimise compliance risk through:
could result in financial penalties, reputational damage, or operational
restrictions, including obligations under Consumer Duty. · Risk-Based Regulatory Interpretation - Applying a proportionate,
risk-based approach to interpreting and implementing regulatory requirements.
Risk exposure and appetite
· Resourcing & Expertise - Ensuring compliance teams are
We operate in a highly regulated environment across multiple jurisdictions, adequately staffed, trained, and supervised, with a specific focus on Consumer
exposing ourselves to compliance and regulatory risk. We have a low appetite Duty and customer outcomes.
for failing to meet regulatory or legislative obligations and are committed to
full compliance with applicable laws and regulations, including the Consumer · Regulatory Horizon Scanning - Monitoring and assessing new
Duty requirements to ensure fair outcomes for customers. regulations and legislation to evaluate business impact.
· Regional Compliance Oversight - Conducting thorough regulatory
analysis to ensure adherence across jurisdictions, particularly for new
initiatives.
· Advisory & Monitoring Frameworks - Providing technical
guidance to the business, alongside comprehensive monitoring, surveillance,
and policy enforcement.
· Regulatory Engagement - Maintaining strong relationships with
regulators and proactively planning for regulatory changes, including
engagement on Consumer Duty expectations and compliance standards.
Operational risk
Key risk description Key mitigations and controls
The risk of financial loss, business disruption, or reputational damage due to We manage operational risk through:
inadequate or failed processes, systems, people, or external events. This
includes fraud, cyber threats, IT failures, and regulatory non-compliance. · Process & System Controls - Automating key processes,
optimising workflows, and implementing robust IT security measures.
Risk exposure and appetite
· Incident & Risk Management - A structured incident response
We are exposed to operational risk as a fintech company operating in a highly framework, continuous monitoring, and risk escalation procedures.
regulated and technology-driven environment. We have a low appetite for
operational failures that could cause material financial, reputational, or · Regulatory Compliance - Regular audits, internal control reviews,
regulatory impact. and staff training to reinforce risk awareness.
· Governance & Oversight - Active risk management by senior
leadership and Board committees to ensure resilience and accountability.
DIRECTORS' STATEMENT PURSUANT TO THE FCA'S DISCLOSURE GUIDANCE AND
TRANSPARENCY RULES
The directors are required by the Disclosure Guidance and Transparency Rules
to include a management report containing a fair review of the business and a
description of the principal risks and uncertainties facing the Group.
Each of the directors, whose names and functions are listed below, confirm to
the best of their knowledge that:
· the Group Financial Statements contained in the 2025 Annual
Report and Financial Statements have been prepared in accordance with
UK-adopted international accounting standards give a true and fair view of the
assets, liabilities and financial position and results of the Group and parent
company and of the profit of the Group;
· the Strategic Report contained in the 2025 Annual Report and
Financial Statements includes a fair review of the development and performance
of the business and the position of the parent company and the Group, together
with a description of the principal risks and uncertainties that they face;
and
· the 2025 Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's performance, business model
and strategy.
CMC Markets plc Board of Directors
James Richards (Independent Chairman)
Lord Peter Cruddas (Chief Executive Officer)
Paul Wainscott (Senior Independent Director)
Sarah Ing (Non-Executive Director)
Clare Francis (Non-Executive Director)
David Fineberg (Deputy CEO)
Laurence Booth (Head of Capital Markets)
Matthew Lewis (Head of ANZ)
Consolidated income statement
For the year ended 31 March 2025
Revenue 3 317,611 324,702
Interest income on own funds 3 18,531 11,246
Income on client funds 3 23,957 23,797
Total revenue 360,099 359,745
Introducing partner commissions and betting levies 4 (19,982) (26,962)
Net operating income 340,117 332,783
Operating expenses 5 (250,074) (254,894)
Impairment of intangible assets 12 (482) (12,322)
Operating profit 89,561 65,567
Share of results of associate 14 (189) (283)
Impairment of investments in associate 14 (2,328) -
Finance costs 7 (2,590) (1,951)
Profit before taxation 84,454 63,333
Taxation 9 (22,267) (16,447)
Profit for the year attributable to owners of the parent 62,187 46,886
Earnings per share
Basic earnings per share 10 22.6p 16.7p
Diluted earnings per share 10 22.6p 16.7p
Consolidated statement of comprehensive income
For the year ended 31 March 2025
Profit for the year 62,187 46,886
Other comprehensive expense
Items that may be subsequently reclassified to income statement: 26
Gains recycled from equity to the income statement 26 - 237
Currency translation differences 26 (6,772) (5,285)
26 35 144
Changes in the fair value of debt instruments at fair value through other
comprehensive income, net of tax
Other comprehensive expense for the year (6,737) (4,904)
Total comprehensive income for the year attributable to owners of the parent 55,450 41,982
Consolidated statement of financial position
As at 31 March 2025
Non-current assets
Intangible assets 12 29,042 28,906
Property, plant and equipment 13 24,169 28,546
Deferred tax assets 9 5,328 6,177
Investments in associate 14 - 2,517
Financial investments 15 30,399 32
Trade and other receivables 16 1,823 2,753
Total non-current assets 90,761 68,931
Current assets
Trade and other receivables 16 145,842 162,056
Derivative financial instruments 17 24,456 31,627
Current tax recoverable 2,679 1,917
Other assets 18 10 12,258
Financial investments 15 80,555 50,889
Amounts due from brokers 140,010 228,882
Cash and cash equivalents 19 247,665 160,300
Total current assets 641,217 647,929
Total assets 731,978 716,860
Current liabilities
Trade and other payables 20 253,581 272,811
Amounts due to brokers 12,239 6,982
Derivative financial instruments 16,160 7,074
Obligations under repurchase agreements 21 7,457 -
Lease liabilities 22 3,109 4,915
Current tax payable 1,832 2,147
Provisions 23 5,282 3,937
Total current liabilities 299,660 297,866
Non-current liabilities
Trade and other payables 20 4 -
Lease liabilities 22 11,233 12,000
Deferred tax liabilities 9 2,765 3,244
Provisions 23 349 257
Total non-current liabilities 14,351 15,501
Total liabilities 314,011 313,367
Equity
Share capital 24 70,573 70,573
Share premium 46,236 46,236
Capital redemption reserve 2,901 2,901
Own shares held in trust 25 (17,047) (2,589)
Other reserves 26 (62,176) (55,439)
Retained earnings 377,480 341,811
Total equity 417,967 403,493
Total equity and liabilities 731,978 716,860
The financial statements were approved by the Board of Directors on 5 June
2025 and signed on its behalf by:
Lord Cruddas
Chief Executive Officer
Consolidated statement of changes in equity
For the year ended 31 March 2025
Note Share Share Capital Own shares Other Retained Total
capital premium redemption held in trust reserves earnings equity
£'000 £'000 reserve £'000 £'000 £'000 £'000
£'000
At 1 April 2023 70,573 46,236 2,901 (1,509) (50,535) 306,349 374,015
Profit for the year - - - - - 46,886 46,886
Gains recycled from equity to the income statement - - - - 237 237
Currency translation differences - - - - (5,285) - (5,285)
Changes in the fair value of debt instruments at fair value through other - - - - 144 -- 144
comprehensive income, net of tax
Total comprehensive income for the year - - - - (4,904) 46,886 41,982
Acquisition of own shares held in trust - - - (1,788) - - (1,788)
Utilisation of own shares held in trust - - - 708 - - 708
Share-based payments - - - - - 1,388 1,388
Tax on share-based payments - - - - - 876 876
Dividends 11 - - - - - (13,688) (13,688)
At 31 March 2024 70,573 46,236 2,901 (2,589) (55,439) 341,811 403,493
Profit for the year - - - - - 62,187 62,187
Currency translation differences - - - - (6,772) - (6,772)
Changes in the fair value of debt instruments at fair value through other - - - - 35 - 35
comprehensive income, net of tax
Total comprehensive income for the year - - - - (6,737) 62,187 55,450
Acquisition of own shares held in trust - - - (15,001) - - (15,001)
Utilisation of own shares held in trust - - - 543 - - 543
Share-based payments - - - - - 3,043 3,043
Tax on share-based payments - - - - - (857) (857)
Dividends 11 - - - - - (28,704) (28,704)
At 31 March 2025 70,573 46,236 2,901 (17,047) (62,176) 377,480 417,967
Consolidated statement of cash flows
For the year ended 31 March 2025
Cash flows from operating activities
Cash generated from operations 27 158,433 57,139
Interest income 18,400 9,702
Income on client funds 24,581 23,797
Finance costs (2,586) (1,951)
Tax paid (23,477) (8,602)
Net cash generated from operating activities 175,351 80,085
Cash flows from investing activities
Purchase of property, plant and equipment (3,028) (7,632)
Investment in intangible assets 12 (6,073) (12,244)
Net payment on purchase of financial investments* (32,252) (18,896)
Investment in associates 14 - (2,800)
Net cash used in investing activities (41,353) (41,572)
Cash flows from financing activities
Principal elements of lease payments (5,058) (5,531)
Net proceeds on repurchase agreements 7,453 -
Acquisition of own shares (15,001) (1,788)
Dividends paid 11 (28,704) (13,688)
Net cash used in financing activities (41,310) (21,007)
Net increase in cash and cash equivalents 92,688 17,506
Cash and cash equivalents at the beginning of the year 160,300 146,218
Effect of foreign exchange rate changes (5,323) (3,424)
Cash and cash equivalents at the end of the year 19 247,665 160,300
* To maintain consistency with the current period, comparative figures have
been restated to reflect the net amount of purchases and proceeds from the
maturity of financial investments
Notes to the consolidated financial statements
For the year ended 31 March 2025
1. General information and basis of preparation
Corporate information
CMC Markets plc (the "Company") is a public company limited by shares
incorporated in the United Kingdom and domiciled in England and Wales under
the Companies Act 2006. The address of the parent company's registered office
is shown on page 128 of the 2025 Annual Report and Accounts.
The nature of the operations and principal activities of CMC Markets plc and
its subsidiaries (collectively the "Group") are set out in note 2 of the
Company financial statements.
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the "functional currency"). The Group's financial statements
are presented in sterling ("£"), which is the Company's functional and the
Group's presentation currency.
Going concern
The Directors have prepared the financial statements on a going concern basis,
which requires the Directors to have a reasonable expectation that the Group
has adequate resources to continue in operational existence for a period of at
least 12 months from the date of approval of the financial statements.
The Group has considerable financial resources, a broad range of products and
a geographically diversified business. Consequently, the Directors believe
that the Group is well placed to manage its business risks in the context of
the current economic outlook.
Accordingly, the Directors have reasonable expectation that the Group has
adequate resources for that period of at least 12 months from the date of
approval of the financial statements and believe it is appropriate to adopt
the going concern basis in preparing the financial statements.
Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with UK-adopted International Accounting Standards in conformity
with the requirements of the Companies Act 2006 and the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The financial statements have been prepared in accordance with the going
concern basis, under the historical cost convention, except in the case of
financial instruments at fair value through profit or loss ("FVPL") and
financial instruments at fair value through other comprehensive income
("FVOCI"). The financial information is rounded to the nearest thousand
except where otherwise indicated.
The Group's accounting policies which relate to the financial statements as a
whole are set out below. Where an accounting policy relates specifically to a
note, the related accounting policy is set out within that note. All policies
have been consistently applied to all the years presented unless stated
otherwise, except for the adoption of the new or revised standards.
The financial statements presented are at and for the years ended 31 March
2025 and 31 March 2024 which are referred to as FY 2025 and FY 2024
respectively.
Application of new and revised accounting standards
The following amendments and interpretations became effective during the year.
Their adoption has not had any significant impact on the Group.
Effective from
IFRS 16 Leases (amendments) 1 January 2024
IAS 1 Presentation of Financial Statements (amendments) 1 January 2024
IAS 7 Statement of Cash Flows (amendments) 1 January 2024
IFRS 7 Financial Instruments: Disclosures (amendment) 1 January 2024
Standards issued by the IASB not effective for the current year and not early
adopted by the Group
The following standards and amendments have been assessed as not having a
material impact at this time.
Effective from
Amendments to IAS 21 - Lack of Exchangeability 1 January 2025
Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of Financial 1 January 2026
Instrument
Annual improvements to IFRS - volume 11 1 January 2026
IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027
The impact of the following is under assessment - IFRS 18 "Presentation and
Disclosure in Financial Statements", which will become effective in the Group
financial statements for the year end 31 March 2028, subject to UK
endorsement.
The Group does not intend to adopt any of these new standards or amendment
early.
Foreign currencies
Transactions denominated in currencies, other than the functional currency,
are recorded at the rates of exchange prevailing on the date of the
transaction. At each balance sheet date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates prevailing
on the balance sheet date. Gains and losses arising on retranslation are
included in the income statement for the year, except for exchange differences
arising on non-monetary assets and liabilities where the changes in fair value
are recognised directly in equity.
On consolidation, the assets and liabilities of the Group's overseas
operations are translated at exchange rates prevailing on the balance sheet
date. Income and expense items are translated at the average exchange rates
applicable to the relevant year. Exchange differences arising, if any, are
classified as equity and transferred to the translation reserve.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of condensed consolidated financial statements in conformity
with IFRS requires the use of certain significant accounting judgement or
estimation. The Directors believe that the assumptions applied
at 31 March 2025 and 2024 are appropriate and therefore present the
Group's financial position and results fairly.
The areas involving a higher degree of judgement or estimation are:
Area Estimation uncertainty Judgements Further details
Intangible assets Recoverable amount of the UK Invest cash generating unit Customer relationships Note 12
Provisions Measurement of customer remediation provision (FY 2025 only) n/a Note 23
Other assets n/a Accounting for cryptocurrencies Note 18
(FY 2024 only)
Contingent liabilities n/a Assessment of legal and regulatory matters Note 32
2. Segmental reporting
Accounting policy
The Group's segmental information is presented in line with the internal
reporting provided to the Chief Operating Decision Maker, identified as the
Group's Board, for the purpose of allocating resources and
evaluating performance.
Operating segments that do not meet the quantitative thresholds under IFRS 8
"Operating Segments" are aggregated. Segments are reviewed annually.
The accounting policies of the reportable segments are the same as the Group's
accounting policies.
The Group's business consists of two segments, Trading and Investing, each
with distinct characteristics and client objectives.
Trading
The Group's core business involves online trading, enabling clients to trade a
broad array of financial instruments for short-term investment and hedging
purposes. These instruments include contracts for difference ("CFDs") and
financial spread betting across various assets, such as shares, indices,
foreign currencies, commodities, and treasuries. The Group also extends these
services to institutional partners through white label and introducing broker
arrangements. While CFDs are accessible globally, spread betting is available
exclusively in the UK and Ireland.
Additionally, the trading segment includes the Treasury Management and Capital
Markets Division that invests surplus liquidity to enhance yield.
Investing
To support clients' longer-term investment goals, the Group offers online
stockbroking services in Australia, the UK, the USA and Singapore.
Years ended 31 March 2025
Trading Investing Total
£'000 £'000 £'000
Revenue 261,101 56,510 317,611
Interest income 31,693 10,795 42,488
Total revenue 292,794 67,305 360,099
Introducing partner commissions and betting levies (7,242) (12,740) (19,982)
Net operating income 285,552 54,565 340,117
Operating expenses (exc. depreciation and amortisation) (193,166) (43,377) (236,543)
Depreciation and amortisation (9,010) (4,521) (13,531)
Impairment of intangible assets (482) - (482)
Operating profit 82,894 6,667 89,561
Share of results of associates and joint ventures (2,517) - (2,517)
Finance costs (2,578) (12) (2,590)
Profit before taxation 77,799 6,655 84,454
Revenue 279,018 45,684 324,702
Interest income 24,053 10,990 35,043
Total revenue 303,071 56,674 359,745
Introducing partner commissions and betting levies (15,233) (11,729) (26,962)
Net operating income 287,838 44,945 332,783
Operating expenses (exc. depreciation and amortisation) (189,915) (49,878) (239,793)
Depreciation and amortisation (10,612) (4,489) (15,101)
Impairment of intangible assets (2,298) (10,024) (12,322)
Operating profit/(loss) 85,013 (19,446) 65,567
Share of results of associates and joint ventures (283) - (283)
Finance costs (1,947) (4) (1,951)
Profit/(loss) before taxation 82,783 (19,450) 63,333
Transactions between reportable segments are limited to transfer pricing
arrangements, which are conducted on an arm's length basis and in line with
the Group's transfer pricing policy. These transactions primarily relate to
shared services, technology infrastructure and intellectual property, and are
reflected in segment results accordingly.
There are no asymmetrical allocations between reportable segments. All
inter-segment charges are applied consistently across segments and are fully
eliminated on consolidation.
Segment assets and liabilities are not disclosed because they are not reported
to, or reviewed by, the Chief Operating Decision Maker.
Information about major customers
No single customers contributed 10 per cent or more to the Group's revenue in
either FY 2025 or FY 2024.
Net operating income by geography
The measurement of net operating income for segmental analysis is consistent
with that in the income statement and is broken down by geographic location
below.
UK 104,593 92,332
Australia 109,188 109,425
Other countries 126,336 131,026
Total 340,117 332,783
Non-current assets by geography
The measurement of segment assets for segmental analysis is consistent with
that in the balance sheet. The total of non-current assets other than deferred
tax assets, broken down by location of the assets, is shown below:
31 March 2025 31 March 2024
£'000 £'000
UK 59,052 32,981
Australia 19,329 23,405
Other countries 7,052 6,368
Total 85,433 62,754
3. Revenue
Accounting policy
Revenue
Revenue represents the fair value of consideration received or receivable for
the provision of online financial services, net of client rebates and
value-added tax, and excludes intra-group transactions.
The Group primarily earns revenue from commissions, spreads and financing
income arising from its stockbroking activities and from acting as a market
maker for spread bets and CFDs. Revenue is presented net of the impact of
any hedge arrangements the Group undertakes to manage market risk.
Trading - CFDs and spread bets
Revenue from CFDs and spread bets includes:
· Fees for commission and funding charges on opening, holding and
closing positions; spreads; and fair value gains/losses on client trading.
· Deductions for commissions, funding charges, spreads and fair
value gains/losses from hedging activities.
These items are recognised in line with IFRS 9 "Financial Instruments'' and
IFRS 13 "Fair Value Measurement". Commission income is recognised when trades
are placed, and funding charges when positions are held at 5:00 pm New York
time. Unrealised gains/losses from daily valuations and realised gains/losses
from closed positions are included in revenue.
Investing - stockbroking revenue from contracts with customers
Stockbroking revenue is recognised in accordance with IFRS 15 "Revenue from
Contracts with Customers" when performance obligations are satisfied,
typically when services are delivered to clients.
Other revenue
Other revenue includes income from financial information services, dormancy
fees, balance conversions, corporate brokerage, capital markets activity and
client exchange fees. It is recognised in accordance with IFRS 15 "Revenue
from Contracts with Customers" when the related performance obligations are
satisfied.
Interest income
Interest is recognised using the effective interest rate method.
Interest income from segregated client funds, net of amounts paid to clients
on their free cash balances, is recognised in revenue.
Revenue
Year ended 31 March
2025 2024
£'000 £'000
Trading 256,169 274,309
Investing 57,189 45,684
Other 4,253 4,709
Total 317,611 324,702
Within trading revenue is net gains or net losses on financial assets or
financial liabilities measured at FVTPL. All net gains or losses arose from
financial assets subject to mandatorily measured at FVTPL which totalled
£2,494,000 (FY 2024: £633,000).
Interest income on own funds
Year ended 31 March
2025 2024
£'000 £'000
Bank and broker interest 14,242 9,661
Interest on financial investments 4,249 1,556
Other interest income 40 29
Total 18,531 11,246
Interest income on client funds
Year ended 31 March
2025 2024
£'000 £'000
Interest income on client funds 23,957 23,797
Total 23,957 23,797
4. Introducing partner commissions and betting levies
Accounting policy
Introducing partner commissions and betting levies are recognised as
deductions from total revenue in the period the associated revenue is earned.
Betting levies are payable on net gains from spread betting and countdowns
products.
Year ended 31 March
2025 2024
£'000 £'000
Trading 7,242 15,233
Investing 12,740 11,729
Total 19,982 26,962
5. Operating expenses
Year ended 31 March
Note 2025 2024
£'000 £'000
Fixed remuneration(1) 93,894 101,461
Variable remuneration(1) 19,799 17,008
Net staff costs 6 113,693 118,469
IT costs 46,377 39,697
Sales and marketing 33,473 35,583
Premises 5,186 6,657
Legal and professional fees 13,078 13,937
Regulatory fees 5,098 4,294
Depreciation and amortisation 12,13 13,531 15,101
Bank charges 4,368 5,055
Irrecoverable sales tax 6,136 5,546
Other 9,134 10,568
250,074 254,907
Capitalised internal software development costs - (13)
Total 250,074 254,894
1 - Net of capitalised internal software development costs
The above presentation reflects the breakdown of operating expenses by nature
of expense.
Net foreign exchange gains
Net foreign exchange gains during the year totalled £630,000 (FY 2024: gains
of £1,134,000).
6. Staff costs
Year ended 31 March
2025 2024
£'000 £'000
Wages and salaries 97,074 108,291
Social security costs 12,865 13,950
Other pension costs 3,245 3,439
Share-based payments 4,001 2,757
Total Director and employee costs 117,185 128,437
Contract staff costs 2,450 1,703
119,635 130,140
Capitalised internal software development costs (5,942) (11,671)
Net staff costs 113,693 118,469
Compensation of key management personnel is disclosed in note 31.
The monthly average number of Directors and employees of the Group during the
year is set out below:
Year ended 31 March
2025 2024
£'000 £'000
Key management 9 10
Client acquisition and maintenance 450 523
IT development and support 300 348
Global support functions 285 284
Total Director and employee 1,044 1,165
Contract staff 24 16
Total staff 1,068 1,181
Pension costs
The Group operates defined contribution pension schemes for its Directors and
employees. The assets of the schemes are held separately from those of the
Group in independently administered funds. Contributions are made on a
contractual basis, with no further payment obligations once the contributions
have been paid. These contributions are recognised as an expense when they
fall due.
7. Finance costs
Year ended 31 March
2025 2024
£'000 £'000
Interest and fees on bank borrowings 802 985
Interest on lease liabilities 1,102 966
Other finance costs 686 -
Total 2,590 1,951
8. Audit fees
Fees payable to the Group's auditor, Deloitte LLP, were as follows:
Year ended 31 March
2025 2024
£'000 £'000
Audit services
Audit of CMC Markets plc's financial statements 1,208 1,069
Audit of CMC Markets plc's subsidiaries 1,480 1,340
Total audit fees 2,688 2,409
Non-audit services
Audit-related services 1,110 825
Total non-audit fees 1,110 825
Total 3,798 3,234
9. Taxation
Year ended 31 March
2025 2024
£'000 £'000
Analysis of charge for the year
Current tax:
Current tax on profit for the year 24,394 18,839
Adjustments in respect of previous years (1,517) (991)
Total current tax 22,877 17,848
Deferred tax:
Origination and reversal of temporary differences (1,726) (1,878)
Adjustments in respect of previous years 1,116 477
Total deferred tax (610) (1,401)
Total tax 22,267 16,447
The standard rate of UK corporation tax charged was 25% with effect from 1
April 2023. Taxation outside the UK is calculated at the rates prevailing in
the respective jurisdictions. The effective tax rate for FY 2025 was 26.37%
(FY 2024: 25.97%) differs from the standard rate of corporation tax of 25% (FY
2024: 25%). The differences are explained below:
Year ended 31 March
2025 2024
£'000 £'000
Profit before taxation 84,454 63,333
Profit multiplied by the standard rate of corporation tax in the UK of 25% (FY 21,114 15,833
2024: 25%)
Adjustment in respect of foreign tax rates 897 743
Adjustments in respect of previous years (401) (514)
Income not subject to tax (19) -
Expenses not deductible for tax purposes 372 319
Unrecognised tax losses 63 66
Other differences 241 -
Total tax 22,267 16,447
Years ended 31 March
2025 2024
£'000 £'000
Tax on items recognised directly in equity
Tax charge/(credit) on share-based payments 857 (876)
Deferred tax
Deferred income taxes are calculated on all temporary differences under the
liability method at the tax rate expected to apply when the deferred tax will
crystallise. The gross movement on deferred tax is as follows:
Year ended 31 March
2025 2024
£'000 £'000
At 1 April 2,933 756
Charge to income for the year 610 1,401
Charge to equity for the year (857) 876
Foreign currency translation (123) (100)
At 31 March 2,563 2,933
The following table details the deferred tax assets and liabilities recognised
by the Group and movements thereon during the year:
Tax losses Accelerated Intangible Share based Accruals and Total
£'000 capital fixed assets payments provisions £'000
allowances £'000 £'000 £'000
£'000
1 April 2023 95 (2,082) (2,535) 205 5,073 756
Charge to income for the year 79 (708) 451 119 1,460 1,401
Charge to equity for the year - - - 876 - 876
Foreign currency translation (3) (2) (106) - 11 (100)
31 March 2024 171 (2,792) (2,190) 1,200 6,544 2,933
Charge to income for the year 243 1,918 50 151 (1,752) 610
Charge to equity for the year - - - (857) - (857)
Foreign currency translation (15) (11) 11 (1) (107) (123)
31 March 2025 399 (885) (2,129) 493 4,685 2,563
The recognition of deferred tax assets is based upon whether it is more likely
than not that sufficient and suitable taxable profits will be available in the
future against which the reversal of the temporary differences can be
deducted. The recoverability of the Group's deferred tax asset in respect of
carry forward losses is based on an assessment of the future levels of taxable
profit expected to arise that can be offset against these losses. The Group's
expectations as to the level of future taxable profits take into account the
Group's long-term financial and strategic plans and anticipated future tax
adjusting items. In making this assessment, account is taken of business plans
including the Board-approved Group budget. Key budget assumptions are
discussed in the Directors' viability statement.
The Group has a gross deferred tax assets totalling £5,328,000 (31 March
2024: £6,177,000) and gross deferred tax liabilities of £2,765,000 (31 March
2024: £3,243,000).
Deferred tax assets are recognised for tax losses carried forward to the
extent that the realisation of the related tax benefit through future taxable
profits is probable. As at 31 March 2025, the Group did not recognise deferred
tax assets of £185,000 (31 March 2024: £272,000) in respect of losses
amounting to £784,000 (31 March 2024: £1,416,000). £78,000 (31 March 2024:
£66,000) of the losses relates to the Group's Information Internet Limited
subsidiary, none (31 March 2024: £1,416,000) of the losses relates to CMC
Markets Singapore Invest Pte Ltd subsidiary and £670,000 (31 March 2024:
£nil) Opto Markets LLC. There is no time limit on their utilisation.
The Group has recognised a deferred tax asset of £395,000 (31 March 2024:
£171,000) in respect of losses of £2,114,000 (31 March 2024: £813,000).
£596,000 (31 March 2024: £548,000) of the losses relates to the Group's
Information Internet Limited subsidiary, £1,518,000 (31 March 2024:
£265,000) of losses relates to CMC Markets Singapore Invest Pte Ltd.
Deferred tax balances are reported at the substantively enacted corporation
tax rate of 25%, the substantively enacted tax rate at the balance sheet date.
10. Earnings per share
Basic earnings per share ("EPS") is calculated by dividing the earnings
attributable to the equity owners of the Company by the weighted average
number of Ordinary Shares in issue during each year excluding those held in
employee share trusts. For diluted earnings per share, the weighted average
number of Ordinary Shares in issue, excluding those held in employee share
trusts, is adjusted to assume conversion vesting of all dilutive potential
weighted average Ordinary Shares and that vesting is satisfied by the issue of
new Ordinary Shares.
Earnings attributable to Ordinary Shareholders (£'000) 62,187 46,886
Weighted average number of shares used in the calculation of basic EPS ('000) 275,233 279,962
Dilutive effect of share options ('000) - -
Weighted average number of shares used in the calculation of diluted EPS 275,233 279,962
('000)
Basic EPS 22.6p 16.7p
Diluted EPS 22.6p 16.7p
For FY 2025, there are no (FY 2024: no) potentially dilutive weighted average
Ordinary Shares in respect of share awards and options in issue, included in
the calculation of diluted EPS, as the Group does not expect to issue any new
shares to settle these share awards and options.
11. Dividends
Year ended 31 March
2025 2024
£'000 £'000
Declared and paid in each year
Final dividend for 2024 at 7.30p per share (2023: 3.90p) 20,176 10,893
Interim dividend for 2025 at 3.10p per share (2024: 1.00p) 8,528 2,795
Total dividend paid 28,704 13,688
The final dividend for 2025 of 8.3 pence per share, amounting to £22.6
million, was proposed by the Board on 4 June 2025 and has not been included
as a liability at 31 March 2025. The dividend will be paid on 15 August 2025,
following approval at the Company's Annual General Meeting, to those members
on the register at the close of business on 10 July 2025. The dividends paid
or declared in relation to the financial year are set out below:
Year ended 31 March
2025 2024
Pence Pence
Declared per share
Interim dividend 3.10 1.00
Final dividend 8.30 7.30
Total dividend per share 11.40 8.30
12. Intangible assets
Critical accounting judgements
Customer relationships
A key judgement has been applied in recognising of customer relationship
intangible assets on the Group's statement of financial position. At 31 March
2025 these had a carrying amount of £8.7 million (31 March 2024:
£10.8 million). The Group applied the recognition principles of IAS 38
"Intangible Assets" to account for these assets and continues to measure them
in accordance with this standard. These assets relate to the 2021 transaction
with ANZ Banking Group Limited to transition its Share Investing client
portfolio to CMC for AUD$25 million.
Key sources of estimation uncertainty
Recoverable amount of the UK Invest Cash Generating Unit
Management undertakes a regular review of impairment indicators for its
non-current assets. As of 31 March 2025, indicators were identified relating
to the Group's UK Invest cash-generating unit (CGU). An impairment test was
conducted, assessing the recoverable amount based on the CGU's value in use
(VIU). This resulted in headroom above the carrying amount, confirming that
no impairment was required.
Further details of the assessment undertaken can be found below.
Accounting policy
Computer software (purchased and developed)
Purchased software is recognised as an intangible asset at cost when acquired.
Costs associated with maintaining computer software are recognised as an
expense as incurred. Costs directly attributable to internally developed
software are recognised as an intangible asset only if all of the following
conditions are met:
· it is technically feasible to complete the software so that it
will be available for use;
· management intends to complete the software and use it;
· there is an ability to use the software;
· it can be demonstrated how the software will generate probable
future economic benefits;
· adequate technical, financial and other resources to complete the
development and to use the software are available; and
· the expenditure attributable to the software during its
development can be reliably measured. Where the above conditions are not met,
costs are expensed as incurred.
Costs which have been recognised as an asset are amortised on a straight-line
basis over the asset's estimated useful life from the point at which the asset
is ready to use.
Trademarks and trading licences
Trademarks and trading licences that are separately acquired are capitalised
at cost and those acquired from a business combination are capitalised at the
fair value at the date of acquisition.
Client relationships
The fair value attributable to client relationships acquired through a
business combination is included as an intangible asset and amortised over the
estimated useful life on a straight-line basis. The fair value of client
relationships is calculated at the date of acquisition on the basis of the
expected future cash flows to be generated from that asset. Separate values
are not attributed to internally generated client relationships.
Intangible assets are amortised on a straight-line basis within the income
statement using the following useful economic lives:
Item
Amortisation policy
Computer software (purchased and developed)
3-10 years or life of licence
Trademarks and trading licences
10-20
years
Client
relationships
10-14 years
Useful lives are also examined on an annual basis and adjustments, where
applicable, are made on a prospective basis. Assets under development are
transferred to the relevant intangible asset class and amortised over their
useful life from the point at which the asset is ready to use. At each
reporting date, all intangible assets are reviewed for indicators of
impairment. Assets under development are tested for impairment annually.
Cryptocurrency assets held as intangible assets
The Group holds cryptocurrency assets that are not held for sale in the
ordinary course of business and therefore are measured in accordance with IAS
38 "Intangible Assets". The assets are originally recognised at cost and are
subsequently remeasured at cost under the cost method. These cryptocurrency
assets, subject to periodic review, are considered to have indefinite lives
and as such are not subject to amortisation. The assets are tested for
impairment on a periodic basis with any impairment being recognised in the
Consolidated Income Statement.
Goodwill Computer Trademarks and Customer Cryptocurrency Assets under Total
£'000 software trading licences relationships assets development £'000
£'000 £'000 £'000 £'000 £'000
Cost
1 April 2023 11,500 143,991 1,046 16,495 - 7,707 180,739
Additions - 338 - - 200 11,706 12,244
Transfers - 9,671 - - - (9,671) -
Disposals - (1,730) - - - - (1,730)
Foreign currency translation - (1,222) (27) (790) - (235) (2,274)
31 March 2024 11,500 151,048 1,019 15,705 200 9,507 188,979
Additions - 131 - - - 5,942 6,073
Transfers - 6,170 - - - (6,170) -
Disposals (11,500) (89,007) (12) - - - (100,519)
Foreign currency translation - (1,628) (35) (987) - (298) (2,948)
31 March 2025 - 66,714 972 14,718 200 8,981 91,585
Accumulated amortisation and impairment
1 April 2023 (11,500) (129,304) (914) (3,679) - - (145,397)
Charge for the year - (3,953) (34) (1,456) - - (5,443)
Impairment - (9,161) - - - (3,161) (12,322)
Disposals - 1,730 - - - - 1,730
Foreign currency translation - 1,137 25 197 - - 1,359
31 March 2024 (11,500) (139,551) (923) (4,938) - (3,161) (160,073)
Charge for the year - (2,794) (34) (1,422) - - (4,250)
Impairment - - - - (23) (459) (482)
Disposals 11,500 88,916 12 - - - 100,428
Foreign currency translation - 1,414 33 387 - - 1,834
31 March 2025 - (52,015) (912) (5,973) (23) (3,620) (62,543)
Carrying amount
31 March 2024 - 11,497 96 10,767 200 6,346 28,906
31 March 2025 - 14,699 60 8,745 177 5,361 29,042
Disposals
The disposals during in the year consisted primarily of historic software and
other intangible assets that have fully amortised, are no longer being used
and are no longer providing any further economic benefits to the Group.
Research and development costs
Research and development expenses for the year totalled £695,000 (31 March
2024: £887,000).
Client relationships
Client relationships include the AUD$25 million transaction with ANZ to
transition its portfolio of Share Investing clients to CMC. As at 31 March
2025 the carrying amount of this asset was £8.7 million, with 6.5 years
remaining in its amortisation period.
Impairment of intangible assets
At 31 March 2025, impairment indicators were identified in relation to the
Group's UK Invest CGU, and an impairment assessment was performed. No
impairment loss was recognised as the recoverable amount of the CGU exceeded
it's carrying value. The recoverable amount for the UK Invest CGU was
determined using a VIU calculation.
During the year, management reviewed and updated the Group's CGUs to ensure
they remained aligned with how cash flows are generated. Previously, UK Invest
was included within a broader Cash Equities CGU, which also comprised cash
equities operated elsewhere in the business on the Next Generation platform
(the core platform that underpins the Group's offering with the exception of
stockbroking in Australia and Singapore). As the Group continues to progress
towards a One Account, One Platform model, management determined that the cash
flows from non-UK Invest operations were no longer sufficiently independent to
support a combined CGU structure. As a result, UK Invest was assessed as a
standalone CGU, reflecting its distinct user interface, brand and operating
model.
The VIU calculation is based on the Group's Board-approved budget and forecast
covering the period from 1 April 2025 to 31 March 2028, allocated to the UK
Invest CGU. This forecasts reflect Management's best estimates of future
business performance and incorporate assumptions related to the execution of
the Group's strategic priorities, including the successful delivery of key B2B
partnerships.
Forecast profitability for the CGU has been adjusted for non-cash items (such
as depreciation and amortisation) and expected capital expenditure. Cash
flows beyond the three-year forecast period have been increased over years
four to ten, reflecting a gradual progression to maturity. A terminal growth
rate of 2% has been applied thereafter, consistent with long-term economic
growth expectations in the UK - the sole market in which the CGU operates.
A pre-tax discount rate of 11.5% was applied in the VIU model.
The VIU calculation is most sensitive to assumptions around forecast
profitability and the discount rate. For the recoverable amount to fall below
the carrying amount of either CGU, forecast profitability in the terminal year
(which is grown into perpetuity) would need to reduce by 32%, or the discount
rate would need to increase to 13.4%, when considered in isolation.
13. Property, plant and equipment
Accounting policy
Property, plant and equipment ("PPE") is stated at cost less accumulated
depreciation and any recognised impairment loss. Cost includes the original
purchase price of the asset and the costs attributable to bringing the asset
to its working condition for its intended use. Depreciation is provided on all
PPE at rates calculated to write off the cost, less estimated residual value
based on prices prevailing at the balance sheet date, of each asset on
a straight-line basis over its expected useful life as follows:
Item
Depreciation policy
Furniture, fixtures and equipment
5 years
Computer
hardware
5 years
Leasehold improvements
Life of lease
The useful lives and residual values of the assets are assessed annually and
may be adjusted depending on a number of factors. In reassessing asset lives,
factors such as technological innovation, product lifecycles and maintenance
programmes are taken into account. Residual value assessments consider issues
such as future market conditions, the remaining life of the asset and
projected disposal values. Consideration is also given to the extent of
current profits and losses on the disposal of similar assets.
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the income statement.
Right-of-use assets
Upon recognition of a lease liability (see note 22 for further details), the
Group recognises a corresponding right-of-use asset. The asset is initially
measured at the amount of the lease liability, adjusted for any initial direct
costs incurred, lease incentives received or paid, and estimated restoration
costs where applicable.
Right-of-use assets are depreciated on a straight-line basis over the lease
term.
At each reporting date, all items of PPE, including right-of-use assets are
reviewed for indicators of impairment.
Leasehold Furniture, Computer Right-of-use Construction Total
Improvements £'000 fixtures and hardware asset in progress £'000
equipment £'000 £'000 £'000
£'000
Cost
1 April 2023 16,565 9,321 42,420 22,634 152 91,092
Additions 3,006 647 3,779 9,587 - 17,019
Transfers - 89 61 - (150) -
Disposals (2,769) (117) (514) (1,306) - (4,706)
Foreign currency translation (260) (111) (244) (595) (2) (1,212)
31 March 2024 16,542 9,829 45,502 30,320 - 102,193
Additions 521 477 2,041 2,381 - 5,420
Disposals (645) (6,659) (25,180) (1,812) - (34,296)
Foreign currency translation (316) (129) (306) (691) - (1,442)
31 March 2025 16,102 3,518 22,057 30,198 - 71,875
Accumulated depreciation
1 April 2023
Charge for the year (14,092) (8,606) (31,661) (13,962) - (68,321)
Impairment (1,136) (293) (4,163) (4,066) - (9,658)
Disposals 2,549 116 256 601 - 3,522
Foreign currency translation 208 83 174 345 - 810
31 March 2024 (12,471) (8,700) (35,394) (17,082) - (73,647)
Charge for the year (1,307) (389) (3,838) (3,747) - (9,281)
Disposals 645 6,631 25,090 1,810 - 34,176
Foreign currency translation 237 93 234 482 - 1,046
31 March 2025 (12,896) (2,365) (13,908) (18,537) - (47,706)
Carrying amount
31 March 2024 4,071 1,129 10,108 13,238 - 28,546
31 March 2025 3,206 1,153 8,149 11,661 - 24,169
Disposals
The disposals during in the year consisted primarily of historic items that
have fully depreciated, are no longer being used and are no longer providing
any further economic benefits to the Group.
14. Investments in associate
Accounting policy
An associate is an undertaking in which the Group has a long-term equity
interest and over which it has the power to exercise significant influence.
The Group's interest in the net assets of associates is reported in
investments in the statement of financial position and its interest in their
results is included in the income statement. Investments in associates are
initially recorded at cost. Investments in associates are reviewed for
impairment whenever events or circumstances indicate that the carrying amount
may not be recoverable.
As at 31 March 2025 the Group held a 33% stake in Strike X Technologies
("Strike X"), a customer-centric blockchain solutions business operating
globally, through class A shares. Strike X is incorporated in the United
Kingdom and domiciled in England and Wales under the Companies Act 2006 with
its registered office at 2 Kingdom Street, London, W2 6BD. The investments
were acquired in June 2023 for a cost of £2.8 million.
Year ended 31 March
2025 2024
£'000 £'000
At 1 April 2,517 -
Additions - 2,800
Losses for the year (189) (283)
Impairment charge (2,328) -
At 31 March - 2,517
Due to its poor financial position and ongoing losses, an indicator of
impairment was identified. Following an impairment assessment, the Group
concluded that the investments' recoverable amount was £nil, and the full
carrying value was written down as at 31 March 2025.
The Group remains supportive of Strike X and has confidence in its technology.
In May 2025, the Group increased its holding in Strike X to 51% at no cost as
part of an agreement with Strike X's shareholders. This transaction resulted
in the Group taking control of Strike X, enabling greater integration within
the Group and enhancing the ability to leverage Strike X's blockchain
technology to build out the Group's crypto and tokenisation solutions. Further
details can be found in note 33.
15. Financial investments
Accounting policy
Classification and Measurement
The Group classifies financial instruments as either financial assets or
financial liabilities, measured at amortised cost, fair value through other
comprehensive income ("FVOCI"), or fair value through profit or loss
("FVTPL").
At initial recognition, financial instruments are measured at fair value. For
assets measured at amortised cost or FVOCI, transaction costs directly
attributable to acquisition are included. Regular way purchases and sales are
recognised on the trade date.
Subsequently, cash and cash equivalents, amounts due from brokers, and trade
and other receivables are measured at amortised cost. Financial liabilities,
including repurchase agreements, are also measured at amortised cost.
Expected Credit Losses
Trade receivables are short term and do not contain a significant financing
element. The Group applies the simplified approach under IFRS 9, recognising
lifetime expected credit losses from initial recognition.
A receivable is considered in default when more than 90 days past due or where
there is evidence of unlikelihood to pay without enforcement action. Amounts
are written off when there is no reasonable expectation of recovery. Any
subsequent recoveries are recognised in profit or loss.
Financial Investments
Debt instruments that meet the 'solely payments of principal and interest'
("SPPI") criteria and are held within a business model to collect and sell
cash flows are measured at FVOCI. These include UK government securities and
corporate bonds. Interest income is recognised in profit or loss using the
effective interest method. Gains and losses are recognised in OCI and
reclassified to the income statement on derecognition.
Credit-linked notes do not meet the SPPI requirements and are measured at
FVTPL, with changes in fair value recognised in the income statement.
Equity investments are measured at FVTPL, with changes recognised in the
income statement.
Expected credit losses on financial investments are recognised in the income
statement. For instruments measured at FVOCI, related impacts are also
recognised in OCI.
Derecognition
Financial assets and liabilities are derecognised when the underlying
contractual rights or obligations are settled, sold, cancelled or expire.
Year ended 31 March
2025 2024
£'000 £'000
Investment in debt instruments classified at FVOCI
UK government securities 17,394 16,162
Corporate bonds 41,234 34,349
Sukuk bonds 3,824 -
Financial assets mandatory measured at FVPL
Credit-linked notes 19,170 -
Unlisted equity securities 957 32
Listed equity securities 28,375 378
Total 110,954 50,921
Year ended 31 March
2025 2024
£'000 £'000
Analysis of financial investments
Non-current 30,399 32
Current 80,555 50,889
Total 110,954 50,921
UK government securities
UK government securities are held for liquidity management and regulatory
purposes. The effective interest rates of UK government securities held at
the year-end was 2.34% (31 March 2024: range from 2.43% to 2.61%).
The expected credit losses are immaterial as at 31 March 2025 (31 March 2024:
immaterial).
Corporate and sukuk bonds
The Group's corporate bond holdings form part of its treasury management
strategy. The bonds primarily consist of high-grade, short-term traded debt
instruments. The effective interest rates of Corporate bonds held at the
year-end range from 3.46% to 8.36% (31 March 2024: 0.76% to 5.37%). The
expected credit losses are immaterial as at 31 March 2025 (31 March 2024:
immaterial).
Credit-linked notes
The Group holds a portfolio of credit-linked notes. These are structured fixed
income instruments that provide exposure to the credit risk of a specific
entity and from part of the Group's treasury management strategy.
Unlisted equity securities
The Group also holds a limited number of unlisted equity investments as part
of its brokerage business, primarily consisting of shares in a structured
vehicle that provides indirect exposure to common stock in Space Exploration
Technologies Corp. (SpaceX) which was acquired to support a business
initiative.
Listed equity securities
The equity securities held as at 31 March 2025 consisted of shares acquired to
hedge client positions. This included an investment of £21.2 million in De La
Rue plc, representing 9.2% of its market capitalisation. The holding was used
to fully hedge a derivative position provided to an institutional client as
part of the Group's liquidity services and, as such, did not result in direct
market exposure for the Group. The holding was fully sold post year-end.
16. Trade and other receivables
Accounting policy
Trade and other receivables are measured at amortised cost less loss
allowances.
The Group recognises a loss allowance for trade receivables based on lifetime
expected credit losses, estimated using a provision matrix that considers the
customer's country and days past due. A 100 per cent loss allowance is applied
to balances over 90 days past due, reflecting historical non-recovery.
Year ended 31 March
2025 2024
£'000 £'000
Current
Gross trade receivables 12,381 9,936
Less: loss allowance (3,136) (3,964)
Trade receivables 9,245 5,972
Prepayments 16,801 13,552
Accrued income 4,081 3,778
Stockbroking debtors 108,175 126,339
Other debtors and advances 7,540 12,415
145,842 162,056
Non-current
Other debtors 1,823 2,753
Total 147,665 164,809
Stockbroking debtors represent the amount receivable in respect of equity
security transactions executed on behalf of clients with a corresponding
balance included within trade and other payables (note 20).
At 31 March 2025 the Group has lease receivables amounting to £716,000 (31
March 2024: £548,000). The Group is an intermediate lessor on these leases
and has recognised finance income of £40,000 during FY 2025 (FY 2024:
£29,000).
17. Derivative financial instruments
Accounting policy
Derivative financial instruments, including index, commodity and foreign
exchange contracts, are classified as fair value through profit or loss under
IFRS 9 'Financial Instruments', unless designated as accounting hedges.
Derivatives are initially recognised at fair value, with subsequent changes in
fair value and settlement gains or losses recognised in the income statement
unless hedge accounting is applied.
For accounting hedges, the Group documents the relationship between hedging
instruments and hedged items at inception, along with the risk management
objectives and strategy. Effectiveness is assessed both at inception and on an
ongoing basis to ensure the hedge remains highly effective.
Derivatives are categorised as follows:
Held for trading: Used to economically hedge client positions. These are
measured at fair value with gains or losses recognised in revenue.
Held for hedging: Used to manage foreign exchange risk on monetary assets,
liabilities, financial commitments or forecast transactions. Where hedge
accounting is not applied, fair value changes are recognised in operating
costs.
Assets
31 March 2025 31 March 2024
Notional Carrying Notional Carrying
amount amount amount amount
£m £'000 £m £'000
Held for trading
Client trading positions 291.8 24,418 394.0 31,627
Held for hedging
Foreign exchange contracts 5.8 38 - -
Total 297.6 24,456 394.0 31,627
Liabilities
31 March 2025 31 March 2024
Notional Carrying Notional Carrying
amount amount amount amount
£m £'000 £m £'000
Held for trading
Client trading positions 285.8 (11,061) 181.4 (7,074)
Equity trading positions¹ 44.6 (5,099) - -
Total 330.4 (16,160) 181.4 (7,074)
1 - Positions used to hedge client equity CFD exposures, which remained open
at year end as part of the Group's risk management strategy.
18. Other assets
Critical accounting judgements
Accounting for cryptocurrencies (FY 2024 only)
As at 31 March 2024, the Group held £12,258,000 of cryptocurrency assets and
rights to cryptocurrency assets on its statement of financial position. These
were used for hedging purposes and held for sale in the ordinary course of
business. Management exercised judgement in applying the measurement
principles of IFRS 13 Fair Value Measurement in accounting for these assets.
They were presented as 'Other assets' on the Condensed statement of financial
position. By 31 March 2025, the Group's holdings of these assets had reduced
to £10,000.
Separately, the Group recognised £177,000 of cryptocurrency assets at 31
March 2025 (31 March 2024: £200,000) which were not held for sale in the
ordinary course of business. A judgement was made to apply the measurement
principles of IAS 38 'Intangible Assets' in accounting for these holdings.
These assets are presented within 'Intangible assets' on the statement of
financial position.
Given the immaterial balance at 31 March 2025, this is considered a critical
accounting judgement for the prior year comparative period only.
Year ended 31 March
2025 2024
£'000 £'000
Exchange 10 10,382
Vaults - 1,876
Total 10 12,258
Other assets are cryptocurrencies, which are owned and controlled by the Group
for the purpose of hedging the Group's exposure to clients' cryptocurrency
trading positions.
As presented above, the Group holds cryptocurrencies on exchange and in vault.
Cryptocurrencies held on vaults are held in a wallet that has additional
security features. Other assets are measured at fair value less costs to sell,
which cryptocurrencies is based on the market price of these instruments as at
the balance sheet date. During the year the Group disposed of the majority of
its cryptocurrencies as part of its revised hedging approach.
19. Cash and cash equivalents
Accounting policy
Cash and cash equivalents include cash at bank, short-term deposits and highly
liquid investments such as money market funds with original maturities of
three months or less and are subject to an insignificant risk of changes in
value and are held to meet short-term cash commitments.
Year ended 31 March
2025 2024
£'000 £'000
Cash at bank and within money market funds 247,665 160,300
Total 247,665 160,300
The expected credit loss held against cash and cash equivalents as at 31 March
2025 was immaterial (31 March 2024: immaterial).
Movements in net assets
Lease liabilities (11,818) 5,531 (10,960) 332 (16,915)
Total liabilities from financing activities (11,818) 5,531 (10,960) 332 (16,915)
Cash and cash equivalents 146,218 17,506 - (3,424) 160,300
Net cash 134,400 23,037 (10,960) (3,092) 143,385
1 April 2024 Cash flow New and modified lease Foreign 31 March 2025
£'000 £'000 £'000 exchange and other adjustments £'000
£'000
Lease liabilities (16,915) 5,058 (2,721) 236 (14,342)
Obligations under repurchase agreements - (7,453) - (4) (7,457)
Total liabilities from financing activities (16,915) (2,395) (2,721) 232 (21,799)
Cash and cash equivalents 160,300 92,688 - (5,323) 247,665
Net cash 143,385 90,293 (2,721) (5,091) 225,866
All cash and cash equivalent balances recognised on the balance sheet as at 31
March 2025 are available for use by the Group. The Group held £694.9 million
of segregated client money balances as at 31 March 2025 (31 March 2024:
£542.0 million), which are off balance sheet. The Group segregates all money
and assets held on behalf of clients, in accordance with applicable client
money regulations in the jurisdictions in which it operates, with the
exception of a small number of clients who have entered into Title Transfer
Collateral Arrangements (TTCAs) with the firm.
20. Trade and other payables
Current
Client payables 117,740 119,591
Tax and social security 502 759
Stockbroking creditors 99,629 116,029
Accruals and other creditors 35,710 36,432
253,581 272,811
Non-current
Other creditors 4 -
Total 253,585 272,811
Stockbroking creditors represent the amount payable in respect of equity and
securities transactions executed on behalf of clients with a corresponding
balance included within trade and other receivables (note 16).
Bank loans
In March 2025, the syndicated revolving credit facility was renewed at a level
of £55.0 million (31 March 2024: £55.0 million) where £27.5 million had a
maturity date of March 2026 and £27.5 million had a maturity date of
March 2028. This facility can only be used to meet broker margin requirements
of the Group. The rate of interest payable on any loans is the aggregate of
the applicable margin and SONIA. Other fees such as commitment fees, legal
fees and arrangement fees are also payable on this facility.
No amount was outstanding on this facility at 31 March 2025 (31 March 2024:
£nil).
21. Obligations under repurchase agreements
Accounting policy
Obligations under repurchase agreements are treated as collateralised
borrowings and measured at amortised cost. The securities sold remain on the
balance sheet, with a corresponding liability recognised for the cash
received. The difference between the sale and repurchase price is recognised
as interest expense over the term of the agreement using the effective
interest method.
The fair values of repurchase agreements approximate their carrying amounts,
as the balances are either short-dated or subject to variable rates that align
with current market rates. The Group pledges assets for repurchase agreements
which are generally conducted under terms that are usual and customary for
standard securitised borrowing contracts. The fair value of the collateral
provided under these agreements at 31 March 2025 was £8.7 million (31 March
2024: n/a).
22. Lease liabilities
Accounting policy
At the inception of a contract, the Group assesses whether the contract
contains a lease.
At the commencement of a lease, the Group recognises a lease liability and a
corresponding right-of-use asset (see note 13 for further details). The lease
liability is initially measured at the present value of the remaining lease
payments, discounted using the Group's incremental borrowing rate if the rate
implicit in the lease is not readily available. The right-of-use asset is
initially measured at the amount of the lease liability, adjusted for any
upfront payments, direct costs and restoration obligations, less any lease
incentives received.
The lease liability is subsequently remeasured when there are changes to
future lease payments or to the assessment of extension, termination or
purchase options. When such a remeasurement occurs, a corresponding adjustment
is made to the right-of-use asset.
Where the Group is reasonably certain to exercise a break option, only the
lease payments up to the break date are included in the lease liability.
The Group has elected not to recognise lease liabilities and right-of-use
assets for leases with a term of 12 months or less, or for leases of low-value
assets (defined as items with a value of less than £5,000). For these leases,
payments are recognised as an expense in the income statement on a
straight-line basis over the lease term.
As an intermediate lessor, the Group accounts for head leases and sub-leases
separately. Sub-leases of vehicles are classified as finance leases, with
lease receivables recognised at the net investment value. Finance income is
recognised to produce a constant rate of return over the lease term.
The Group leases several assets including leasehold properties and computer
hardware to meet its operational business requirements. The average lease term
is 2.3 years (31 March 2024: 2.8 years).
The movements in lease liabilities during the year were as follows:
At 1 April 16,915 11,818
Additions/modifications of new leases during the year 2,721 10,960
Interest expense 1,102 966
Lease payments made during the year (6,160) (6,497)
Foreign currency translation (236) (322)
At 31 March 14,342 16,915
31 March 31 March
2025 2024
£'000 £'000
Analysis of lease liabilities
Non-current 11,233 12,000
Current 3,109 4,915
Total 14,342 16,915
The lease payments for FY 2025 relating to short-term leases amounted to
£607,000(FY 2024: £732,000).
Refer to note 28 for maturity analysis of lease liabilities.
23. Provisions
Key sources of estimation uncertainty
Measurement of customer remediation provision
The Group has recognised a provision of AUD 8.8 million (£4.3 million) in
relation to a proposed remediation programme arising from historic margin
discounting practices in one of the Group's operating entities in Australia,
following engagement with the Australian Securities and Investments Commission
(ASIC). The provision covers direct client remediation (including holding
costs, spreads and commissions on impacted trading activity), as well as
forgone interest.
There is estimation uncertainty associated with both the amount and timing of
the final remediation payments, given the engagement with ASIC is ongoing.
While the remediation methodology has been finalised and an updated
remediation proposal was submitted to ASIC in May 2025, the outcome remains
subject to further ASIC feedback. The provision represents the Group's best
estimate of the total expected outflow based on information available at the
reporting date.
Restructuring Property Other Total
costs related £'000 £'000
£'000 £'000
At 1 April 2023 - 2,346 556 2,902
Additional provision 2,186 16 1,646 3,848
Utilisation of provision - - (407) (407)
Unutilised provisions reversed - (1,955) (157) (2,112)
Currency translation - (21) (16) (37)
At 31 March 2024 2,186 386 1,622 4,194
Additional provision 1,025 108 4,434 5,567
Utilisation of provision (2,186) (56) (47) (2,289)
Unutilised provisions reversed - (73) (1,566) (1,639)
Currency translation - (16) (186) (202)
At 31 March 2025 1,025 349 4,257 5,631
Restructuring provision
The restructuring provision relates to redundancies and exits announced in FY
2025 and is expected to be fully utilised in FY 2026. The provision in place
as at 31 March 2024 was fully utilised during the year following the departure
of the affected colleagues.
Property related provisions
The property-related provisions include dilapidation provisions. Dilapidation
provisions have been capitalised as part of cost of ROU assets and are
amortised over the term of the lease. These dilapidation provisions are
utilised as and when the Group vacates a property and expenditure is incurred
to restore the property to its original condition.
Other provisions
Other provisions include an amount in respect of customer remediation in
Australia, following an industry-wide regulatory review into margin netting.
This provision is expected to be fully utilised in FY 2026, with affected
customer accounts credited accordingly.
31 March 31 March
2025 2024
£'000 £'000
Analysis of provisions
Non-current 241 257
Current 5,390 3,937
Total 5,631 4,194
24. Share capital
31 March 31 March
2025 2024
Authorised
Ordinary Shares of 25p 400,000,000 400,000,000
Allotted, issued and fully paid
Ordinary Shares of 25p 279,815,463 279,815,463
Deferred Shares of 25p 2,478,086 2,478,086
Total 282,293,549 282,293,549
31 March 31 March
2025 2024
£'000 £'000
Authorised
Ordinary Shares of 25p 100,000 100,000
Allotted, issued and fully paid
Ordinary Shares of 25p 69,953 69,953
Deferred Shares of 25p 620 620
Total 70,573 70,573
Share class rights
The Company has two classes of shares, Ordinary and Deferred, neither of which
carries a right to fixed income. Deferred Shares have no voting or dividend
rights. In the event of a winding-up, Ordinary Shares shall be repaid at
nominal value plus £500,000 each in priority to Deferred Shares.
25. Own shares held in trust
Number £'000
Ordinary Shares of 25p
At 1 April 2023 705,767 1,509
Acquisition 1,046,565 1,788
Utilisation (328,336) (708)
At 31 March 2024 1,423,996 2,589
Acquisition 6,156,211 15,001
Utilisation (252,550) (543)
At 31 March 2025 7,327,657 17,047
At the AGM held on 25 July 2024, the shareholders authorised the Company to
purchase its own shares up to a maximum number of 27,981,546. The authority is
due to expire at the end of the next annual general meeting of the Company or
at the close of business on 24 September 2025, whichever is the earlier.
The shares are held by various EBTs for the purpose of encouraging or
facilitating the holding of shares in the Company for the benefit of employees
and the trustees will apply the whole or part of the trust's funds to
facilitate dealing in shares by such beneficiaries. The maximum number of own
shares held at any time by the Group was 7,327,657 (FY 2024: 1,423,996). At 31
March 2025, Ordinary Shares held in trust represent 2.62% (31 March
2024:0.51%) of the called up share capital of the Company.
26. Other reserves
At 1 April 2023 6,304 (8,748) (291) (47,800) (50,535)
Currency translation differences (5,285) - - - (5,285)
Gains recycled from equity to income statement 237 - - - 237
Losses on financial investments at FVOCI - - 144 - 144
At 31 March 2024 1,256 (8,748) (147) (47,800) (55,439)
Currency translation differences (6,772) - - - (6,772)
Losses on financial investments at FVOCI - - 35 - 35
At 31 March 2025 (5,516) (8,748) (112) (47,800) (62,176)
Translation reserve
The translation reserve is comprised of translation differences on foreign
currency net investments held.
Net investment hedging reserve
The net investment hedging reserve is used to recognise the gains and losses
on instruments employed to hedge the Group's overseas net investments against
translation risk, which arises from changes in reserves due to fluctuations in
currency exchange rates. Although the net investment hedge programme was
closed at the end of April 2022, the Group continues to monitor balance sheet
translation risk and, where necessary, may mitigate potential volatility in
its financial position through either a new net investment hedge or an
alternative strategy.
FVOCI reserve
The Group holds certain UK government securities, corporate and sukuk bonds at
FVOCI. Unrealised gains and losses arising from changes in the fair value of
these financial assets are recognised in the FVOCI reserve.
Merger reserve
The merger reserve arose following a corporate restructure in 2006 when a new
holding company, CMC Markets plc, was created to bring all CMC companies into
the same corporate structure. The merger reserve represents the difference
between the nominal value of the holding company's share capital and that of
the acquired companies.
27. Cash generated from operations
Year ended 31 March
2025 2024
£'000 £'000
Cash flows from operating activities
Profit before taxation 84,454 63,333
Adjustments for:
Interest income (18,531) (11,246)
Income on client funds (23,957) (23,797)
Finance costs 2,590 1,951
Depreciation 9,281 9,658
Amortisation and impairment of intangible assets 4,732 17,765
Impairment of investments in associate 2,328 -
Research and development tax credit (566) (497)
Share of results of associate 189 283
Loss on disposal of property, plant and equipment 202 479
Other non-cash movements including exchange rate movements (4) (187)
Share-based payment 3,583 2,092
Fair value losses on financial investments at FVTPL 53 -
Changes in working capital
Decrease/(Increase) in trade and other receivables 18,092 (31,181)
Decrease/(Increase) in amounts due from/due to brokers 94,129 (42,673)
Decrease/(Increase) in other assets 12,248 (10,274)
Increase in financial investments held for trading (28,952) -
(Increase)/decrease in trade and other payables (19,226) 90,520
Decrease/(Increase) in net derivative financial instruments 16,257 (12,355)
Increase in provisions 1,531 3,268
Cash generated from operations 158,433 57,139
28. Financial instruments
31 March 2025 31 March 2024
FVOCI FVPL Amortised cost Total FVOCI FVPL Amortised cost Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Financial assets
Cash and cash equivalents - - 247,665 247,665 - - 160,300 160,300
Financial investments 62,452 48,502 - 110,954 50,511 410 - 50,921
Amounts due from brokers - - 140,010 140,010 - - 228,882 228,882
Derivative financial instruments - 24,456 - 24,456 - 31,627 - 31,627
Trade and other receivables excluding non-financial assets - - 130,148 130,148 - - 150,709 150,709
Total 62,452 72,958 517,823 653,233 50,511 32,037 539,891 622,439
Financial liabilities
Obligations under repurchase agreements - - (7,457) (7,457) - - - -
Trade and other payables excluding non-financial liabilities - - (253,083) (253,083) - - (272,052) (272,052)
Amounts due to brokers - - (12,239) (12,239) - - (6,982) (6,982)
Derivative financial instruments - (16,160) - (16,160) - (7,074) - (7,074)
Lease liabilities - - (14,342) (14,342) - - (16,915) (16,915)
Total - (16,160) (287,121) (303,281) - (7,074) (295,949) (303,023)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, short-term deposits, and
money market funds. These are highly liquid investments that are readily
convertible to known amounts of cash with an insignificant risk of value
changes. Further details can be found in note 19.
Financial investments
Financial investments comprise holdings in government and corporate bonds,
listed and unlisted equity securities and credit-linked notes. These are held
for liquidity, strategic or yield purposes. Further details can be found in
note 15.
Amounts due from/to brokers
These balances include funds placed with hedging counterparties, including
collateral posted to meet margin requirements. Profits or losses on open
positions are recognised as derivative financial instruments where IAS 32
offsetting criteria are not met.
Derivative financial instruments
Consists of the fair value of open client positions and related hedging
instruments, including CFDs, spread bets and other derivative contracts.
Further details can be found in note 17.
Trade and other receivables
Trade receivables include amounts due from clients and stockbroking settlement
balances. Further details can be found in note 16.
Obligations under repurchase agreements
Represents cash received under repurchase agreements secured against financial
instruments that remain on the Group's balance sheet.
Trade and other payables
Includes amounts payable to clients, unsettled stockbroking trades, accrued
expenses and other liabilities arising in the ordinary course of business.
Further details can be found in note 20.
Lease liabilities
Represents the Group's obligations under lease contracts for office premises
and other leased assets, including any extension or renewal options that are
reasonably certain to be exercised. Further details can be found in note 22.
Offsetting financial instruments
The Group enters into various collateral arrangements with its counterparties.
These agreements provide the Group with the right, in the ordinary course of
business and/or in the event of a counterparty default (such as bankruptcy or
a counterparty's failure to pay or perform), to net a counterparty's rights
and obligations under such agreement and, in the event of counterparty
default, set off collateral held by the Group against the net amount owed by
the counterparty.
The following financial assets and liabilities have been offset and are
subject to enforceable netting agreements:
31 March 2025 31 March 2024
Amounts reported Collateral (received)/paid Net exposure Amounts reported Collateral (received)/paid Net exposure
£'000 £'000 £'000 £'000 £'000 £'000
Financial assets
Derivative financial instruments 24,456 (24,456) - 31,627 (31,627) -
Total financial assets 24,456 (24,456) - 31,627 (31,627) -
Financial liabilities
Obligations under repurchase agreements (7,457) 7,457 - - - -
Derivative financial instruments (16,160) 5,099 (11,061) (7,074) - (7,074)
Total financial liabilities (23,617) 12,556 (11,061) (7,074) - (7,074)
Fair value estimation
IFRS 13 "Fair Value Measurement" requires the Group to classify its financial
assets and liabilities according to a hierarchy that reflects the
observability of significant market inputs. The three levels of the fair value
hierarchy are:
· Level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities;
· Level 2 - inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices); or
· Level 3 - inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs).
Financial assets
Financial investments 110,954 45,768 64,228 958 110,954 50,921 50,889 - 32 50,921
Derivative financial instruments 24,456 - 24,456 - 24,456 31,627 - 31,627 - 31,627
Total financial assets 135,410 45,768 88,684 958 135,410 82,548 50,889 31,627 32 82,548
Financial liabilities
Derivative financial instruments (16,160) - (16,160) - (16,160) (7,074) - (7,074) - (7,074)
Total financial liabilities (16,160) - (16,160) - (16,160) (7,074) - (7,074) - (7,074)
Valuation techniques
There have been no changes to the fair value hierarchy or valuation techniques
for any of the Group's financial instruments held at fair value in the year.
During the year, there were no transfers between levels (FY 2024: none).
Specific valuation techniques used to value Level 2 and Level 3 financial
instruments include:
Corporate bonds
Corporate bonds held by the Group are valued using market prices sourced from
independent pricing services. These prices reflect recent trading activity but
are classified as Level 2 due to the lower volume and frequency of observable
market transactions.
Credit-linked notes
Credit-linked notes are valued based on market prices obtained from
independent pricing services. As these prices are not from actively traded
markets but rely on observable inputs, they are also classified as Level 2
instruments.
Unlisted equity investments
The financial investments categorised as Level 3 mostly consist of an unlisted
equity investment the Group holds in a structured vehicle that provides
indirect exposure to common stock in Space Exploration Technologies Corp.
(SpaceX). The investment is classified as a Level 3 instrument within the IFRS
13 fair value hierarchy due to the absence of quoted market prices and the use
of significant unobservable inputs in the valuation. A discount for lack of
marketability of 20% has been applied to reflect the illiquidity of the
underlying shares.
As at 31 December 2024, SpaceX completed a secondary share sale at $185 per
share, implying a post-money valuation of approximately $350 billion. The
vehicle's underlying holding comprises common stock that is pari passu with
those transacted in the secondary round, and the transaction has been used as
the primary input for the fair value assessment at year end.
The fair value of the Group's investment at the reporting date was £1.0
million. A 10% change in the underlying valuation of SpaceX would result in a
corresponding change in fair value of approximately £0.9 million.
Derivative financial instruments
The fair value of derivative financial assets and liabilities is determined
using quoted market prices or dealer quotes for similar instruments. The fair
value of forward foreign exchange contracts is calculated using quoted forward
exchange rates at the balance sheet date, with the resulting amount discounted
back to present value. These instruments are classified within Level 2 of the
fair value hierarchy, as inputs other than quoted prices are observable for
the asset or liability, either directly or indirectly.
Reconciliation of Level 3 Fair Value Measurements
The following table provides a reconciliation of movements in fair value
measurements categorised within Level 3 of the fair value hierarchy for each
class of assets:
Unlisted equity investments
Year ended 31 March
2025 2024
£'000 £'000
At 1 April 32 34
Purchases 795 -
Gains recognised in profit or loss 131 -
Foreign currency translation - (2)
At 31 March 958 32
29. Financial risk management
The Group's business activities expose it to various financial risks,
primarily market risk, credit risk and liquidity risk, arising from the
financial instruments it holds.
Risk management approach
The Board recognises that it cannot eliminate all risks but is committed to
ensuring they are managed to an acceptable level through effective risk
management. The Board is responsible for defining and communicating the
Group's risk appetite, implementing an appropriate risk strategy, establishing
and maintaining effective systems and controls, and monitoring adherence to
Group policies.
The Group follows a structured five-step risk management process: risk
identification, risk assessment, risk management, risk reporting, and risk
monitoring. This approach is governed by the Board-approved Risk Appetite
Statement and Risk Management Framework.
The Board sets the overall strategy and policies for managing risk and
delegates oversight to various committees, including the Executive Risk
Committee, which reports to the Group Risk Committee.
As part of its regulatory obligations, the Group conducts an annual Internal
Capital and Risk Assessment (ICARA) process in line with FCA requirements.
This process determines the minimum level of capital and liquid resources that
must be maintained at all times. It also encompasses the identification,
monitoring, and mitigation of potential harms, business model planning and
forecasting, recovery and wind-down planning, and the assessment of financial
resource adequacy.
Further details on how these risks are managed, including the Group's risk
appetites are provided in the Risk Management section on pages 20 to 24 of the
2025 Annual Report and Accounts.
Market risk
Market risk is defined as the risk that the value of our residual portfolio
will decrease due to the change in market risk factors. The three standard
market risk factors are price moves, interest rates and foreign exchange
rates.
Mitigation of market risk
The Group employs several mechanisms to reduce revenue volatility and protect
against market shocks:
Natural aggregation
The Group acts as a market maker in over 10,000 cross-asset class instruments,
including equities, equity indices, commodities, treasuries, foreign exchange
and cryptocurrencies. Due to the high level of notional turnover, there is
significant internal risk crossing and natural aggregation across instruments
and asset classes. This reduces the concentration risk associated with any
single instrument within the portfolio, leading to a significant reduction in
the Group's net market risk exposure.
Hedging
The Group primarily acts as a market maker in linear, highly liquid financial
instruments, allowing it to neutralise market risk efficiently through prime
broker arrangements. To avoid over-reliance, the Group targets at least two
prime brokers per asset class. During the year, a revised market risk appetite
was implemented, increasing overall risk tolerance following a detailed
review. Under this updated framework, the Group continues to benefit from
natural hedging, with external hedging applied more selectively to specific
asset classes or exposures outside defined limits.
Customer limits
For instruments where there is no equivalent underlying market (e.g.
Countdowns) the Group controls its risk through setting prudent
position/exposure limits. This is further augmented by dealer monitoring and
intervention, which can take the form of restricting the size offered or, if
deemed necessary, restricting the clients' ability to take a position in an
instrument.
Market risk limits
Market risk exposures are managed in line with the Group's Risk Appetite
Statement and Risk Management Framework. The Group ensures that capital
resources are sufficient to meet market risk capital requirements while
remaining within defined risk appetite levels. This is achieved through
notional position limits set at the instrument and asset class levels,
alongside overarching capital-based limits.
Client exposures can fluctuate significantly over short periods, influenced by
market conditions. The Group's Own Funds Requirement ("OFR") is calculated
under the Investment Firms Prudential Regime ("IFPR"), with market risk OFR
increasing year-on-year while remaining within Board-approved risk appetite.
The following table summarises the market risk OFR by asset class:
31 March 31 March
2025 2024
£'000 £'000
Asset class
Consolidated equities 45,338 41,367
Commodities 19,664 10,545
Fixed income 6,175 2,613
Foreign exchange 39,703 26,182
Cryptocurrencies 5,112 699
Total 115,991 81,406
Market price risk - stress testing
The Group conducts daily market price risk stress testing to quantify
potential losses from adverse market moves on residual exposure. This exposure
accounts for all client products, factoring in hedging undertaken as part of
the Group's risk management strategy.
Risk measurement techniques include Value at Risk ("VaR"), Expected Shortfall
("ES"), and Stress Testing models. The models assess likely and probable
scenarios alongside extreme stress tests simulating low-probability,
high-severity events.
The VaR model, performed at the end of each trading day, applies a one-day
holding period with a 99% confidence interval and a 12-month lookback period.
An additional severe stress scenario is conducted based on the maximum
observed daily price movements within the lookback period.
For asset classes with high intraday turnover, stress testing is also
performed on the largest positions held during the trading session. The VaR
model does not assume any risk mitigation actions, such as intraday hedging,
and stress factors are regularly reviewed to ensure recent volatility trends
are captured.
The table below presents the end-of-day VaR model results:
31 March 31 March
2025 2024
£'000 £'000
Market risk (22,470) (10,778)
Foreign exchange risk is the risk that the Group's results are impacted by
movements in foreign exchange rates. CMC is exposed to foreign exchange risk
in the form of transaction and translation exposure.
Transaction exposure is from holdings of cash and other current assets and
liabilities in a currency other than the base currency of the entity. This
risk is hedged each month by the treasury team according to a policy based on
a cap and floor model, with gains/losses recognised in the income statement.
Any foreign exchange transaction exposures are hedged in accordance with the
Group Foreign Exchange Hedging Policy. Given the effectiveness of the hedging
programme (income statement impact in year ended 31 March 2025: gain of
£92,000 (FY 2024: loss of £1,033,000), no sensitivity analysis has been
performed. The instruments used for economically hedging foreign exchange risk
are derivative financial instruments and are reported as described in note 17.
Translation exposure occurs when the net assets of an entity are denominated
in a foreign currency other than GBP, when the statement of financial position
is prepared.
Non-trading book interest rate risk
Interest rate risk arises when changes in floating rates impact interest
income on segregated client and own funds or increase the cost of liabilities.
The Group's exposure includes income from segregated client funds, charges on
client balances exceeding predefined thresholds, credit market exposure
through fixed income investments and liquidity money market funds, and
valuation changes in fixed-rate UK government securities.
The Group optimises its cash position to manage exposure to interest rates
effectively. Sensitivity analysis assesses potential impacts from a 1.00%
movement in floating rates.
31 March 2025 31 March 2024
Absolute Absolute Absolute Absolute
increase decrease increase decrease
£'000 £'000 £'000 £'000
Impact of 1.00% change
Profit after tax 5,571 (6,956) 4,232 (5,287)
Equity 5,571 (6,956) 4,232 (5,287)
Credit risk
Credit risk arises from counterparty failure to meet obligations, divided into
financial institution credit risk and client counterparty risk.
Financial institution credit risk
The Group maintains relationships with multiple counterparties that provide
prime brokerage and banking services, including cash accounts, foreign
exchange trading, credit facilities, and custodian services. Financial
institution (FI) credit risk arises when a counterparty fails to meet its
obligations, potentially leading to financial losses.
This risk can materialise in several ways. If an FI acting as a bank or broker
fails, the Group may be unable to access funds held in its accounts. In the
case of a prime broker default, the Group risks losing any unrealised profits
and may need to re-hedge at a different broker, potentially at a less
favourable price. For cryptocurrency counterparties, a default could result in
the loss of physical assets.
Mitigation of financial institution credit risk
To minimise potential losses, the Group actively manages its exposure to
counterparties. Where possible, it maintains a diverse range of relationships
to avoid over-reliance on any single FI, as outlined in the Group Counterparty
Concentration Risk Policy. Counterparty creditworthiness is continuously
monitored, with formal reviews conducted at least annually in accordance with
the Group Hedge Counterparty Selection Policy.
The Group has implemented an internal stress-testing model, based on
regulatory methodologies, to measure exposure to credit risk. This model
incorporates credit ratings to estimate the probability of default for each
counterparty. Contractual protections, such as the "close-out netting"
provisions in International Swaps and Derivatives Association and broker
agreements, further mitigate potential losses by allowing transactions to be
terminated and netted in the event of a default.
Credit and counterparty risk limits are set within the Group's policies. These
limits determine the maximum balances that can be held with rated and unrated
FIs, as well as cryptocurrency counterparties. Liquidity Risk Management
continuously monitors credit quality using multiple indicators, including
ratings from Standard & Poor's, Moody's and Fitch, credit default swap
(CDS) spreads, share price movements, and performance against relevant
indices.
The Group transacts exclusively with investment-grade rated FIs, with one
exception where exposure is limited. No specific minimum credit rating
threshold is imposed, as the number of suitable counterparties is limited,
and strict rating criteria could unnecessarily constrain the Group's ability
to operate. Instead, negative rating actions and significant widening in CDS
spreads are assessed on a case-by-case basis. If a counterparty's rating falls
below investment grade, the Executive Risk Committee evaluates the situation
and considers actions such as reducing exposure, withdrawing cash balances
daily, reallocating hedge trading to another broker, or ceasing commercial
activity with the counterparty.
The following table presents the Group's exposure to credit institutions based
on their long-term credit ratings:
AA+ to AA- 97,580 505 - - 38 98,123
A+ to A- 6,875 89,158 - 5,774 - 101,807
BBB+ to BBB- 120,660 39,088 - 26,260 (5,099) 180,909
Unrated 22,549 11,260 10 78,920 13,356 126,096
Total 247,665 140,010 10 110,954 8,296 506,935
AA+ to AA- 32,841 3 - 16,162 - 49,006
A+ to A- 30,535 131,631 - - - 162,166
BBB+ to BBB- 60,897 84,042 - 29,305 - 174,245
Unrated 36,027 13,206 12,258 5,453 24,553 91,497
Total 160,300 228,882 12,258 50,921 24,553 476,914
Prior year comparative information has been represented to conform to the
current year presentation.
Client counterparty risk
The Group's CFD, spread betting and OTC options business operate on a
real-time mark-to-market basis, requiring clients to maintain collateral
against open positions. Profits and losses are credited and debited to client
accounts automatically. Given the nature of leveraged products, clients may
incur losses exceeding their deposited funds.
Client counterparty risk arises when a client defaults on obligations to the
Group, typically occurring in cases of extreme market movements where losses
exceed available collateral. Since the Group does not generally extend credit
to retail clients and has a robust liquidation process, counterparty risk is
largely limited to situations where instruments experience sudden price gaps.
For clients with "negative balance protection" accounts, counterparty risk is
eliminated as losses are capped at the account balance. The Group also
provides stockbroking services in the UK, Singapore, and Australia, where it
acts as a designated clearing broker. In stockbroking, counterparty risk
primarily arises from settlement processes. If a client or counterparty fails
to fulfil its obligations, such as delivering the underlying stock or contract
value, the Group is exposed to settlement risk. However, the majority of
client orders are vetted at the point of execution, minimising exposure.
Mitigation of client counterparty risk
To manage this risk, the Group employs a liquidation process that
automatically closes a client's open positions if their total equity falls
below a predefined percentage of required margin. Additional pre-emptive
measures are in place to restrict trading when a client's free equity turns
negative, triggering a notification for the client to review their account.
The tiered margin system, requires higher margin rates for riskier positions,
considering factors such as size relative to underlying turnover, market
volatility, and the Group's risk appetite. Position limits are also imposed at
the instrument and client level, controlling the total exposure to a single
instrument, asset class, or underlying market. For foreign exchange trading,
client limits are based on Net Open Position, capping overall currency
exposure.
The Group conducts daily client counterparty risk stress testing using an
internally developed model to assess exposure under different severity
scenarios. These include extreme market events to evaluate potential losses in
low-probability, high-impact situations.
Client receivables history
Expected credit losses for amounts due from clients are determined based on
historical data and forward-looking factors. The total loss allowance reversed
for the year was £422,000(FY 2024: provided £190,000) primarily driven by
the full recovery of a previously impaired balance relating to a single
customer. Trade receivables of £406,000 (FY 2024: £473,000), were written
off during the year, equivalent to 0.1% of revenue (FY 2024: 0.1%).
The following table summarises movements in the Group's expected credit loss
allowance:
Year ended 31 March
2025 2024
£'000 £'000
At 1 April 3,964 4,247
Loss allowance on trade receivables (reversed)/provided (422) 190
Trade receivables written off (406) (473)
At 31 March 3,136 3,964
Debt ageing analysis
Client debts are managed early in their life-cycle to prevent ageing. The
table below details outstanding debts and corresponding provisions:
31 March 2025 31 March 2024
Debt Provision Debt Provision
£'000 £'000 £'000 £'000
Less than one month 8,841 6 5,596 1
One to three months 275 55 42 15
Three to twelve months 608 435 270 203
Over twelve months 2,656 2,640 4,028 3,745
Total 12,381 3,136 9,936 3,964
Expected credit losses on amounts due from brokers, accrued income and trade
receivables as at 31 March 2025 are immaterial (31 March 2024: immateiral).
Further details on expected credit loss assessments for financial instruments
can be found in note 15.
Liquidity risk
Liquidity risk is the risk that there is insufficient available liquidity to
meet the obligations of the Group as they fall due.
Management of liquidity risk
Liquidity is managed centrally for the Group by the treasury team, with
oversight from a second line provided by the liquidity risk team. The Group
utilises a combination of liquidity forecasting and stress testing (formally
in the ICARA) to ensure that it retains access to sufficient liquid resources
under both normal and stressed conditions to meet its liabilities as they fall
due. Liquidity forecasting incorporates the impact of liquidity regulations in
force in each jurisdiction that the Group is active in and other impediments
to the free movement of liquidity around the Group, including its own
protocols on minimum liquidity to be retained by overseas entities. The Group
has introduced a revised Liquid Asset Threshold Requirement ("LATR") model in
line with the IFPR regulatory requirements, to better estimate the maximum
amount of liquid assets required over the course of the next 12 months under
business-as-usual and periods of plausible stress. The new model is based on
forward-looking estimates and is updated on a daily basis, providing a
dynamic management of requirements.
Liquidity stress testing is performed quarterly using a range of firm-specific
and market-wide scenarios that represent severe but plausible stress events
that the Group could be exposed to over the short and medium term. The firm
takes a holistic stress testing approach, using a scenario comprised of
multiple stress events occurring simultaneously. The Group ensures that the
tests are commensurate to its current and future liquidity risk profile.
Output from the quarterly stress testing process is used to calibrate a series
of limits and metrics which are monitored and reported to senior management
daily. This process seeks to ensure that the Group has appropriate sources of
liquidity in place to meet its liabilities as they fall due under both
"business as usual" and stressed conditions. Due to the risk management
strategy adopted and the changeable scale of the client trading book, the
largest and most variable consumer of liquidity is prime broker margin
requirements. The collateral calls are met from the Group's own cash resources
from and cash received from non-segregated clients who have signed a TTCA
agreement but to ensure liquidity is available for extreme spikes, the Group
has a committed bank facility of £55.0 million, syndicated by two different
banks, to meet short-term liquidity obligations to prime brokers in the event
that it does not have sufficient access to own cash and to leave a sufficient
liquidity buffer to cope with a stress event.
Total Unencumbered Liquid Assets
TULA is a key measure the Group uses to monitor the overall level of liquidity
available to the Group. TULA includes investments in UK government securities,
corporate bonds, credit-linked notes and cash equities the majority of which
are held to meet the Group's regulatory threshold requirements under IFPR. The
derivation of TULA is shown in the table below:
31 March 31 March
2025 2024
£'000 £'000
Cash and cash equivalents (net of bank overdraft) 247,665 160,300
Amount due from brokers 140,010 228,882
Financial investments 109,997 50,889
Undrawn facility 55,000 55,000
Total Available Liquidity 552,672 495,071
Less: blocked cash (73,990) (68,500)
Less: initial margin (92,236) (184,700)
Less: Haircut on financial investments (29,130) (4,574)
Less: Other encumbered financial investments (8,725) -
Less: undrawn facility (55,000) (55,000)
Total unencumbered liquid assets 293,591 182,297
Maturity analysis
The Group does not actively engage in maturity transformation as part of its
underlying business model and therefore maturity mismatch of assets and
liabilities does not represent a material liquidity risk.
31 March 2025 31 March 2024
On demand Less than Three months After one year Total On demand Less than Three months After one year Total
£'000 three months to one year £'000 £'000 £'000 three months to one year £'000 £'000
£'000 £'000 £'000 £'000
Financial assets
Cash and cash equivalents 247,665 - - - 247,665 160,300 - - - 160,300
Financial investments 28,375 23,597 30,945 40,147 123,064 410 18,633 32,966 - 52,009
Amounts due from brokers 140,010 - - - 140,010 228,882 - - - 228,882
Derivative financial instruments 24,456 - - - 24,456 31,627 - - - 31,627
Trade and other receivables excluding non‑financial assets 128,226 866 551 505 130,148 140,785 2,466 456 1,508 145,214
Total 568,732 24,463 31,496 40,652 665,343 562,004 21,099 33,422 1,508 618,032
Financial liabilities
Obligations under repurchase agreements - (7,457) - - (7,457) - - - - -
Trade and other payables excluding non‑financial liabilities (253,083) - - - (253,083) (272,052) - - - (272,052)
Amounts due to brokers (12,239) - - - (12,239) (6,982) - - - (6,982)
Derivative financial instruments (16,160) - - - (16,160) (7,074) - - - (7,074)
Lease liabilities - (1,227) (2,724) (13,909) (17,860) - (1,612) (4,162) (14,776) (20,550)
Total (281,482) (8,684) (2,724) (13,909) (306,799) (286,108) (1,612) (4,162) (14,776) (306,658)
Net liquidity gap 287,250 15,779 28,772 26,743 358,544 275,896 19,487 29,260 (13,268) 311,374
Capital management
The Group's objectives for managing capital are as follows:
The Group and its regulated subsidiaries will comply with regulatory capital,
liquid-capital and equivalent requirements at all times;
· to ensure that all Group entities are able to operate as going
concerns; and
· to ensure that the Group maintains a strong capital base to
support the development of its business.
· The capital resources of the Group consist of equity, being share
capital reduced by own shares held in trust, share premium, other reserves and
retained earnings, which at 31 March 2025 totalled £417,186,000 (31 March
2024: £403,493,000). The Group has been compliant with all applicable
prudential regulatory requirements to which it is subject throughout the year.
· The Group's ICARA review document, prepared in accordance with
FCA requirements, is an ongoing assessment of CMC Markets plc's risks and risk
mitigation strategies, to ensure that adequate financial resources are
maintained against risks that the Group wishes to take to achieve its business
objectives.
· The outcome of the ICARA is presented as an Internal Capital and
Liquidity Assessment document covering the Group. It is reviewed and approved
by the Board at least on an annual basis.
· Disclosure documents have been prepared that contain relevant
information regarding the Group's FCA regulated entities' capital adequacy,
risk management objectives and policies, governance and remuneration policies
and practices. These are available on the CMC Markets plc website
(www.cmcmarkets.com/group). The Group's country-by-country reporting
disclosure is also available in the same location on the website.
30. Share-based payment
Accounting policy
The Group issues equity settled and cash settled share-based payments to
certain employees.
Equity settled share-based payments are measured at fair value (excluding the
effect of non-market-based vesting conditions) at date of grant. The fair
value determined at the grant date of the equity settled share-based payment
is expensed on a straight-line basis over the vesting period based on the
Group's estimate of shares that will eventually vest. At each balance sheet
date, the Group revises its estimate of the number of equity instruments
expected to vest as a result of the effect of non-market-based vesting
conditions. The impact of the revision of the original estimates, if any, is
recognised in the income statement such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to the retained
earnings.
The expected life used in the model has been adjusted, based on management's
best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations.
Cash settled share-based payments are measured at expected value at vesting
date at least once per year, along with the likelihood of meeting
non-market-based vesting conditions and the number of shares that are expected
to vest. The cost is recognised in the income statement with a corresponding
liability recorded.
The Group operates both equity and cash settled share-based payment schemes
for certain employees including Directors.
Current awards have been granted under the terms of the Management Equity Plan
2015 ("2015 MEP"), the Combined Incentive Plan ("2018 CIP"), the UK Share
Incentive Plan ("UK SIP") and the International Share Incentive Plan
("Australian SIP"). Equity settled schemes are offered to certain employees,
including Executive Directors in the UK and Australia, and automatically vest
on the vesting date subject to conditions described below for each scheme.
Cash settled schemes are offered to certain employees outside of the UK and
Australia. During the year ended 31 March 2024 equity schemes for UK
employees were settled net of employee taxes due. The rights of participants
in the various employee share schemes are governed by detailed terms,
including in relation to arrangements which would apply in the event of a
takeover.
Consolidated Income Statement charge for share-based payments
The total costs relating to these schemes for FY 2025 was £4,008,000 (FY
2024: £2,757,000). For FY 2025 the charge relating to equity settled
share-based payments was £3,584,000 (FY 2024: £2,364,000) and the charge
relating to cash settled share-based payments was £424,000 (FY 2024:
£393,000). No shares were gifted to employees during the year (FY 2024: nil).
Current schemes
2018 CIP
Share awards granted to the Executive Directors under the 2018 CIP have been
in the form of conditional awards and are equity settled. The Remuneration
Committee approves any awards made under the 2018 CIP. Shares awarded are
deferred over a period of at least three years subject to a performance
underpin. The Committee will review Group performance over the relevant
period, taking into account factors such as: a) the Company's TSR performance;
b) aggregate profit levels; and c) any regulatory breaches during the period.
2015 MEP
Share awards granted under the 2015 MEP are predominantly equity settled, with
the exception of certain participants that are cash settled. The Remuneration
Committee approves any awards made under the 2015 MEP. Current schemes are:
Long Term Incentive Plan: awards to senior management and critical staff,
excluding Executive Directors. These are awarded in the form of share awards
and Options. The share awards have dividend equivalence where additional
shares will be awarded in place of dividends on vesting. The only vesting
conditions of the 2020 and 2021 equity settled awards is that employees remain
employed by the Group, with the 2022 equity awards having a non-market
performance condition of cumulative PBT over a three-year period in addition
to remaining employed by the Group. This was revised in May 2023, with the
performance condition now being aligned to net operating income over the same
period. The vesting conditions of the 2023 Option awards are that employees
remain employed by the Group and the price of the CMC Markets plc's shares
must be greater than the relevant exercise price at the vesting date.
The fair value of share awards were calculated using the average of the share
price three days prior to the grant date. The fair value of the Options
granted during the year was calculated using the Black-Scholes model that
takes into account the exercise price, the term of the option, the impact of
dilution (where material), the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield, the risk-free
interest rate for the term of the option, and the correlations and
volatilities of the peer group companies.
Movement in share options
Year ended 31 March 2025 Year ended 31 March 2024
Share options Weighted average exercise price Share options Weighted average exercise price
Number Number
At beginning of year 10,495,016 247.6p - -
Granted - - 12,891,806 247.6p
Forfeited (804,952) 251.0p (2,396,790) 247.6p
Outstanding at end of year 9,690,064 247.3p 10,495,016 247.6p
Exercisable at end of year - - - -
The average share price during FY 2025 was 276.2p (FY 2024: 137.8p). No share
options were exercised during the financial year(FY 2024: Nil).
Share options outstanding
The number of options outstanding at year end was as follows:
Year ended 31 March 2025 Year ended 31 March 2024
Exercise price Vesting date Share awards Weighted average life (In years) Share awards Weighted average life (In years)
Number Number
152.8p 21 July 2025 1,572,616 0.3 1,684,590 1.3
229.2p 21 July 2026 4,251,147 1.3 4,602,324 2.3
305.6p 21 July 2027 3,866,301 2.3 4,208,102 3.3
Total 9,690,064 1.5 10,495,016 2.5
Movement in share awards
Year ended 31 March 2025 Year ended 31 March 2024
Share awards Weighted average exercise price Share awards Weighted average exercise price
Number Number
At beginning of year 2,582,859 - 2,899,300 -
Granted (including dividend equivalents) 1,785,083 - 699,065 -
Forfeited (99,460) - (461,882) -
Exercised* (253,112) - (553,624) -
Outstanding at end of year 4,015,370 - 2,582,859 -
*The share awards are automatically exercised on vesting, as such none of the
share awards are exercisable at the end of the year.
31. Related party transactions
Related Persons
The Group's key management personnel, along with persons connected to them,
are classified as related parties. Key management personnel are defined as
individuals with authority and responsibility for planning, directing, and
controlling the activities of the Group. For disclosure purposes, the
Directors and members of the Executive Committee are regarded as the key
management personnel.
Ultimate Controlling Party
The ultimate controlling party of the Group is Lord Cruddas, by virtue of his
majority shareholding in CMC Markets plc. As the Group's CEO, Lord Cruddas is
already considered a related person, being a member of the Group's key
management personnel.
Compensation of key management personnel
Total compensation cost for key management personnel for the year by category
of benefit was as follows:
Year ended 31 March
2025 2024
£'000 £'000
Short-term employee benefits 3,477 3,280
Post-employment benefits 90 88
Share-based payments 1,013 632
Total 4,580 4,000
Other related party transactions
During the year, the Group provided one member of key management personnel a
short-term loan of £400,000 (FY 2024: n/a). The loan has been provided on
commercial terms. The full balance of the loan was outstanding as at 31
March 2025 (31 March 2024: n/a).
There were no other transactions with related persons during FY 2025 and FY
2024.
32. Contingent liabilities
Critical accounting judgements
Assessment of legal and regulatory matters
A key judgement applied in preparing these financial statements is the
evaluation of the accounting treatment of the contingent liabilities described
below. This includes the assessment of whether a present obligation exists and
where it does, estimating the likelihood, timing, and amount of any associated
outflows. In evaluating whether a provision is required and can be reliably
estimated, the Group consults relevant experts, where necessary and
continuously reassess its decisions. In the initial stages of legal, tax and
regulatory matters, it is often not possible to reliably estimate the outcome,
and in such cases, no provision is made.
The Group's geographical reach exposes it to a high degree of uncertainty
regarding the interpretation of local regulatory, tax and legal matters in
each territory in which it has operations. In addition, the Group is party to
various contractual relationships that could result in non-performance claims
and other contractual breaches and from time to time is involved in disputes
as part of the ordinary course of business.
In certain instances, legal disputes can pose a have a significant financial
exposure, however the Group's manages these risks proactively to resolve
disputes and claims are usually resolved without any material loss. The Group
makes provision for claims where costs are likely to be incurred.
Where there are uncertainties regarding regulatory, tax and legal matters and
a provision has not been made, there are no contingent liabilities where the
Group considers any material adverse financial impact to be probable.
Notice of class action lawsuit
One of the Group's operating entities in Australia is the subject of class
action proceedings in the Federal Court of Australia, filed in May 2022. The
lawsuit relates to the acquisition of interests in CFDs and binary products
between November 2011 and April 2021 by retail clients who suffered a loss. At
this time, the scope and prospects of the claim is still being determined,
with further discovery from CMC underway until August 2025. It is not
practicable to disclose any estimate of the financial effect, if any, or the
possibility of any financial outflow or timing thereof.
Open tax enquiries
The Group has open tax enquiries in relation to its European operations
arising from historical product launches and more routine enquires in its
North American entities. The potential outcome of these enquiries is unclear
and there is no certainty whether there may be a financial cost to the Group.
33. Events after the reporting period
Increased shareholding in Strike X
On 7 May 2025, the Group agreed to increase its stake in Strike X to 51%
through the acquisition of additional shares at their nominal value. As a
result, the Group is deemed to have obtained control and will consolidate
Strike X's results into its financial statements.
Related party loan
On 4 June 2025, the short-term loan to a member of key management personnel,
as set out in note 31, was replaced with a new agreement on amended terms.
There were no other significant events after the reporting period.
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