June 11, 2020 / 7:12 AM / a month ago

REFILE-UPDATE 2-CMC Markets profit soars amid March trading surge

(Corrects spelling of executes in fifth paragraph)

* FY profit before tax 98.7 mln pounds vs 6.3 mln pounds

* Proposes final dividend of 12.18p/shr

* Shares hit highest level since Sept 2016

By Aby Jose Koilparambil

June 11 (Reuters) - CMC Markets reported a surge in pre-tax profit to 98.7 million pounds ($125 million) on Thursday, up from just 6.3 million a year ago as trading firms benefit from the sharp increase in transactions due to the global equities sell-off.

Shares in the firm, founded by Peter Cruddas, former co-treasurer of Britain’s Conservative Party, shot up 17.7% to 234.5 pence, their highest since September 2016 and on track to register their best daily performance.

Financial trading platforms have emerged as one of the winners from the COVID-19-related lockdowns as market volatility drove a surge in trading volumes.

“We saw a large amount of interest in markets in general and that translated into a big increase in client acquisitions during the period,” Deputy CEO David Fineberg told Reuters, without disclosing customer numbers.

Unlike rival Plus500, which reported a surge in revenue but also a $150 million loss because it was exposed to customers’ unusually successful bets, CMC executes trades for customers but is little exposed to whether they win or lose.

“Even looking through the current elevated levels of activity, CMC has a strong, well invested trading platform, and has shown its resilience through the current period,” said analysts at Peel Hunt, which rates the stock a “buy”.

CMC proposed a final dividend of 12.18 pence per share, bringing the full-year payment to 15.03 pence versus the 2.03 pence a share it paid out last year. ($1 = 0.7883 pounds) (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Shailesh Kuber and Elaine Hardcastle)

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