StockMarketWire.com - Spread betting group CMC Markets reported a slump in profits as regulations and choppy markets hurt client trading activity.

The company also announced that Euan Marshall, Group Head of Finance, would assume the role of interim Chief Financial Officer.

For the 52 weeks ended 31 March, pre-tax profit slumped by 89% to £6.3m and revenue fell by 30% to £130.8m.

Net operating income fell 30% to $131.8m, in line with downgraded guidance given earlier this year, as CFD and spread bet active clients fell 10% to 53,308, with revenue per active client down 30%.

The fall in client activity followed the implementation of the ESMA intervention measures on 1 August 2018. The new rules required clients to use more of their cash to fund their margin requirements or deposit more funds with CMC to trade at previous levels.

The company proposed final dividend of 0.68p a share, taking the full year ordinary dividend to 2.03 pence, down 77% from last year.

Looking ahead the company said it expected costs to be marginally higher as it looks to take advantage of the opportunities that the regulatory change would present.

'This has been a difficult period of trading for CMC and our sector, but having now weathered the ESMA transition, we exit this year with renewed confidence in the future,' said Peter Cruddas, Chief Executive Officer.

'We have learned as our clients adjusted to the imposition of much lower leverage levels at the same time as experiencing range bound markets. As a result, we have adjusted our business to ensure we capture revenue appropriately and manage the net risk we are exposed to from higher client margins against smaller positions being held for longer periods.'

At 8:04am: [LON:CMCX] CMC Markets Plc share price was -10.35p at 79.05p



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