CMC Markets said on Thursday that trading remained strong throughout the final quarter of the year, with net operating income for the second half expected to be "moderately" higher than the first half and up "significantly" on the previous year.
In a brief trading update ahead of its full-year results in June, the company said it had seen an increase in the proportion of high value clients, which has driven a "significant" improvement in revenue per client compared to the previous year. Overall, active client numbers are slightly below the previous year, although the final quarter saw an increase on the year.

CMC said its partnership with ANZ Bank remains on track for delivery in September 2018, with the first significant milestone successfully delivered in the period. In addition, it said costs will be higher in the second half reflecting higher marketing, discretionary remuneration and the ANZ integration spend, as expected.

In reference to the company's net operating income expectations, Shore Capital said its expected "moderately" to be somewhere between modest and margin, so around 5% to 10%.

"This would imply H2 net operating income of between £94m and £98.5m compared to our current forecast of £90.3m. The mid-point of £96.3m would take our full year NOI to £185.9m (from £179.9m). With cost guidance unchanged, including ANZ integration spend, all of this £6m revenue upside potentially drops through to the bottom line, implying a profit before tax upgrade of circa 10% to our broadly consensual £53.8m."

RBC Capital Markets, which rates the stock at 'outperform', said the continued shift towards high value clients should mean that CMC is well positioned for the upcoming ESMA measures that apply to retail clients that were announced on 27 March 2018.

These rule changes include a prohibition on binary options to retail clients - which is only £2.1m of revenue for CMC in 1H18 - and leverage limits for retail clients between 30:1 and 2:1 depending on the underlying asset.

"Although the ESMA measures could lead to some change in client behaviour in the near term, we see CMC as well positioned to be a medium to long term winner in retail trading due to its proprietary technology and approach to fair client outcomes."

At 1100 GMT, the shares were up 9.6% to 170.14p.

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