(Sharecast News) - Online trading platform CMC Markets reported a drop in full-year pre-tax profit on Thursday - although this was broadly in line with expectations - and slashed its dividend, as it said it was targeting 30% growth in net operating income over the next three years.
In the year to the end of March, pre-tax profit fell 59% to £92.1m. Meanwhile, net operating income declined 31% to £281.9m, which was at the top end of guidance and a record performance outside of Covid restrictions.
CMC pointed out that 2021 had benefited from significant market volatility, which resulted in exceptionally high client trading activity. However, 2022 trading returned to more normalised levels.
Leveraged net trading revenue fell 34% to £229.6m and the board recommended a final dividend of 8.88p a share, down from 21.43p a year earlier and taking the total dividend for the year to 12.38p a share, down from 30.63p.
CMC said investment in growth initiatives is expected to result in a 30% jump in net operating income over the next three years.
Chief executive officer Peter Cruddas said: "I am delighted to report another year of impressive performance from both a strategic and financial standpoint. Excluding the exceptional Covid-19 impacted prior year, which due to market volatility saw unusually significant trading volumes, this is a record net operating income result for the group.
"Over the last year we have taken steps to define the strategic direction and diversification of the Group, building on our existing technology to launch a new investment platform that will unlock significant shareholder value and challenge the existing client transaction fee cost structures.
"There is significant opportunity and growth potential in the self‑directing investment platform space, especially in the UK, not just for improved technology but also transaction costs and fees. We believe commissions, execution spreads and custodial fees are too high and too expensive for retail investors. We will utilise our platform technology, including pricing and execution, to drive down the transaction costs of investments for retail clients, just like we did in Australia, where we are the number two investment platform for retail investors."
At 0840 BST, the shares were down 11.4% at 268p.
CMC Markets (CMCX)