(Alliance News) - CMC Markets provided a buoyant trading update on Thursday, with the contract-for-difference trading platform saying it expects to beat market expectations for annual income amid a high number of active customers.
CMC said it expects net operating income in the financial year that ends on March 31 to be slightly above the upper end of the current range of market consensus, which it put at GBP387.5 million to GBP399.61 million. It also raised its guidance for net operating income in financial 2022 to in excess of GBP330 million.
CMC said that in the period from January 1 to Wednesday this week, client income retention remained above 80%, though below levels reported for the first half of the financial year, as previously guided. Active client numbers for the full year will be more than 75,000, the company said.
"Over the last 12 months, market volatility has driven up client activity across the industry," commented Chief Executive Officer Peter Cruddas. "I am particularly pleased that our new clients are demonstrating similar behaviours to existing long-term, high value clients, which supports our longstanding strategy. Our client acquisition rates are very encouraging and reflect the advancements we have made in our technology, pricing and execution of trades."
CMC said it will release its annual results on June 10. It will no longer provide a previously scheduled trading update on April 8.
CMC shares were up 4.1% at 462.50 pence early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.5% at 6,677.16
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Hang Seng: down 0.1% at 27,900.64
Nikkei 225: closed up 1.1% at 28,729.88
DJIA: closed down 3.09 points at 32,420.06
S&P 500: closed down 0.6% at 3,889.14
Nasdaq Composite: closed down 2.0% at 12,961.89
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EUR: down at USD1.1812 (USD1.1834)
GBP: down at USD1.3675 (USD1.3728)
USD: up at JPY108.99 (JPY108.77)
Gold: down at USD1,733.25 per ounce (USD1,736.33)
Oil (Brent): down at USD63.64 a barrel (USD63.98)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
EU virtual summit
1100 GMT UK CBI distributive trades survey
1000 CET EU monetary developments in euro area (M3)
0830 EDT US 3rd estimate GDP
0830 EDT US jobless claims
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A vote on extending coronavirus laws in Britain for a further six months will come to the Commons amid talks between the UK and EU aiming to resolve a dispute over vaccine supplies. On Thursday, members of Parliament will be asked to approve the regulations for the route out of lockdown and keep some of the emergency powers in the Coronavirus Act in place until September. It comes as UK Health Secretary Matt Hancock said he could see an "end" to the pandemic that would involve managing coronavirus "more like flu" with repeated and updated vaccinations. EU leaders are set to discuss proposals aimed at tightening restrictions on vaccine exports at a virtual European Council summit, after London and Brussels moved to calm tensions following weeks of ramped up rhetoric. A joint statement said the two sides were seeking a "win-win" deal to increase supplies across the UK and EU as the bloc's dispute with AstraZeneca continued. Meanwhile, UK Prime Minister Boris Johnson suggested to the Commons Liaison Committee that it could be up to landlords to decide if coronavirus certificates are required for pubgoers. Trade body UKHospitality criticised the prospect of pubs and restaurants being subject to vaccine certificates as "simply unworkable" and said it could cause conflict between staff and customers.
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Ireland's economy could recover "quite strongly" from pandemic-related curbs in 2021, but employment is unlikely to bounce back for at least two years, according to the state-funded Economic & Social Research Institute. In a report, the ESRI cut its earlier 2021 gross domestic product growth forecast from 5.2% to 4.4%, citing the likely impact of Ireland's ongoing third lockdown, which was imposed in late December. The ESRI said the revised projection assumes "a gradual easing of restrictions" from next month and that Covid-19 jabs "will facilitate the broad relaxation of public health restrictions in the second half of 2021". Ireland's economy grew by 3.4% in 2020 on the back of record exports in multinational-heavy sectors that have thrived during the pandemic.
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BROKER RATING CHANGES
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BERENBERG RAISES AVIVA TO 'BUY' ('HOLD') - TARGET 478 (453) PENCE
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BERENBERG RAISES KEYWORDS STUDIOS TO 'BUY' ('HOLD') - TARGET 3110 (2890) PENCE
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BARCLAYS CUTS KEYWORDS STUDIOS PRICE TARGET TO 2900 (3150) PENCE - 'OVERWEIGHT'
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COMPANIES - FTSE 100
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AstraZeneca clarified that the Covid-19 vaccine doses at its Anagni plant in Italy are not a stockpile, but instead are awaiting quality-control clearance. The Anglo-Swedish drugmaker also noted there are no exports currently planned other than to Covax countries from the plant. "There are 13 million doses of vaccine waiting for quality control release to be dispatched to Covax as part of the company's commitment to supply millions of doses to low-income countries. The vaccine was made outside the EU and brought to the Anagni plant to be filled into vials. The EU fully supports supplying low-and middle-income countries through the COVAX facility," AstraZeneca said. Covax is the Covid-19 Vaccines Global Access initiative, aimed at equitable access to Covid-19 vaccines and led by international bodies such as the World Health Organization. AstraZeneca said there are another 16 million doses waiting for quality control release to be dispatched to Europe. About 10 million doses will be delivered to EU countries during the last week of March, and the balance to be delivered in April as the doses are approved for release after quality control.
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Compass Group said it expects organic revenue to be almost a third lower as coronavirus restrictions hindered the caterer's operations. Compass said it expects organic revenue for the three months to March 31 to be down 28% and organic revenue for the 6 months to March 31 to be down 31%. The Chertsey-based firm said it has been operating at 71% of 2019 revenue in the interim period. Its operating margin is expected to increase by around 130 basis points to 4.0% in the second quarter from 2.7% in the first quarter. Looking ahead, Compass said although Covid-19 vaccination efforts around the globe are advancing, the pace of volume recovery remains uncertain. However, it noted that the pipeline of new business and client retention continue to be strong. "We are controlling the controllable by managing our costs, adapting our operations and resizing our business. We remain confident in our ability to rebuild our group underlying margin above 7%, before we return to pre-COVID volumes," the company said. "Looking further ahead, we are excited about the significant structural market opportunity globally, organic revenue growth, continued margin improvement and returns to shareholders over time," Compass added.
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Water works United Utilities said it has continued to perform strongly during the Covid-19 pandemic and expects to deliver an "excellent operational performance" ahead of its annual results in May. United Utilities said current trading is in line with the group's expectations for the year to March 31. It said revenue is expected to be lower than last year, mainly reflecting the reduction in allowed regulatory revenue, with lower consumption from businesses as a result of Covid-19 largely offset by higher consumption from households. Overall, the net reduction in revenue is expected to be around 3.0%, the company said. In addition, United Utilities said underlying operating profit for financial 2021 is expected to be lower than the previous year, largely reflecting lower revenue and higher infrastructure renewals expenditure.
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COMPANIES - FTSE 250
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Cineworld said the global pandemic has severely hurt the industry and its annual results, with all sites across the company being temporarily closed from mid-March last year. For 2020, Cineworld swung to a pretax loss of USD3.01 billion from a USD212.3 million profit in 2019 on revenue of USD852.3 million, down 81% from USD4.37 billion. Cineworld said it looks forward to reopening cinemas worldwide, with the anticipated cinema re-opening from April 2 in the US, May 17 in the UK and also in May in the rest of the world where the company has operations, such as Ireland and Central Europe. It highlighted its prospects remain supported by a strong pipeline of new movies and the current indication that government restrictions will be lifted. Cineworld shares are 11% lower this week amid concerns movie studios would continue to release films simultaneously to cinemas and online streaming platforms, as has been happening during the pandemic. "There can be no certainty as to the future impact of Covid-19 on the group. Governments strengthening of restrictions on social gathering may lead to closure of cinemas or studios delaying movie releases. This would have a negative impact on the group's financial performance and likely require the need to raise additional liquidity. The material uncertainties, as well as some one-off cash flow impacts on the group are highlighted within the going concern statement in these results," Cineworld said.
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Thursday's Shareholder Meetings
Emmerson PLC - GM re move to AIM from main market
Micro Focus International PLC - AGM
SSP Group PLC - AGM
Xeros Technology PLC - GM re shareholders approval for AIM trading
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
Aviva (AV.)
Keywords Studios Plc (KWS)
CMC Markets (CMCX)
