CMC Markets is cutting 17% of its workforce due to cost savings
- The London-listed company said it plans to cut 200 jobs as part of cost savings
- The company will continue to look for opportunities to increase efficiency and control costs
Trading platform CMC Markets is cutting its global workforce in attempts to reduce costs, following a strategic review.
The London-listed company told investors on Monday it will cut 200 positions, representing 17 percent of its global workforce.
The group said the move will save £21 million a year by 2025, with around £2.5 million expected to be cut this year as the company continues to “look for opportunities to increase efficiency and control costs hold’.
The London-listed company said it plans to cut 200 jobs, representing 17 percent of its total workforce.
CMC Markets has already achieved cost savings by “merging support functions across multiple business lines, streamlining reporting lines and automating processes,” it added.
The group also confirmed that trading remains in line with expectations and is on track to deliver a net operating profit of £290 million to £310 million this year.
CMC markets rose 12.35 percent to 149.20p in Monday morning trading.
Founded by former Conservative Party co-treasurer Lord Peter Cruddas, CMC benefited from a wave of amateur investors during the early part of the Covid-19 pandemic who took advantage of increased market volatility to make some extra money.
But online trading platforms are struggling to maintain activity levels seen during Russia’s invasion of Ukraine in February 2022 and during the pandemic.
Nevertheless, CMC last month raised its 2024 net operating profit expectations to £280 million from its previous forecast of £250 million.
The company attributed the strong quarterly performance to resilient demand from business-to-business and institutional investors.
Analysts at Peel Hunt said the cost savings should result in a ‘significant increase in profitability’.
The broker added: ‘Following the recent increase in profits due to stronger trading performance, management is taking decisive action to return the cost base to a more appropriate level after several years of investments.
‘The stock is trading on just over 8x earnings growth, while yielding almost 6 percent. We are raising our target price from 140p to 200p based on our higher earnings expectations, and maintain our ‘buy’ rating.
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