CMC diversification grew, but trading produced 78% of the year’s income increase

CMC Markets reported record net operating income of £392.6 million for the year to March 2026 and emphasised expansion in stockbroking, institutional partnerships, digital assets and a planned multi-asset “Super App”. The accounts support genuine diversification: net investing income grew 30%, faster than net trading income. But reconstructing the increase shows the established trading business still produced £40.758 million, or 77.7%, of the £52.463 million rise in net operating income.[1][2][3]

The finding does not contradict the strategy. A smaller business can grow faster while contributing fewer pounds to the group result. It changes the claim that can be made from the year: diversification advanced, but the incremental earnings engine remained predominantly trading. Evaluating the transition requires both percentages and absolute contributions.[1][2][3]

The fastest-growing line was not the largest contributor

Net trading income rose from £248.927 million to £289.685 million, an increase of 16.4%. Net investing income rose from £44.449 million to £57.795 million, an increase of 30.0%. The investing line therefore had the higher growth rate, but it began at less than one-fifth of trading income. Its £13.346 million increase represented 25.4% of the total net-operating-income gain.[1][2][3]

Net interest income declined by £1.069 million and other operating income declined by £0.572 million. Those reductions offset about 3.1% of the positive contributions. Because contribution percentages are calculated against the net £52.463 million increase, the positive trading and investing shares add to more than 100% before the negative lines are included.[1][2][3]

This is a denominator issue with strategic consequences. Quoting 30% investing growth can imply that the group's centre of gravity has already shifted. Quoting the 74% share of current net operating income generated by trading can understate the speed at which investing is expanding. The more complete statement is that trading supplied 73.8% of FY2026 NOI and 77.7% of its annual increase, while investing supplied 14.7% of NOI and about a quarter of the increase.[1][2][3]

CMC's Australian stockbroking operation reported A$140.3 million of net operating income, up 32%, and the group described progress with Westpac and ASB Bank partnerships. That is substantial evidence of a second engine. Yet the partnerships were still moving toward launch, so their prospective customer bases and assets should not be treated as fully contributing FY2026 operations.[1][2][3]

Gross partnership reach is not the same as retained income

CMC defines net operating income as total revenue after introducing-partner commissions and betting levies. Total revenue was £418.667 million, while the deductions were £25.595 million, before the remaining reconciliation to £392.580 million. Introducing-partner commissions and levies grew 28.1%, faster than total revenue.[1][2][3]

That faster growth is not automatically a deterioration. Paying more partner commission can be rational when it brings profitable volume without a proportionate fixed-cost burden. It does mean that gross account numbers or gross revenue sourced through partners are incomplete measures. The group retains the amount after contractual distribution costs, and operating profit must then absorb technology, staff, marketing, regulatory and remediation expenditure.[1][2][3]

The deductions equalled about 6.1% of total revenue in FY2026, compared with roughly 5.5% in FY2025. The shift is modest, and the public accounts do not assign it solely to any one partnership. It is nevertheless a useful unit-economics indicator as CMC expands through banks, retailers and application-programming-interface relationships. A scalable distribution story should ultimately be visible in net income and profit, not only in accessible accounts.[1][2][3]

CMC's Westpac arrangement was described as covering approximately A$39 billion of assets under administration across about half a million share-trading accounts. Those are the partner's existing assets and accounts, not FY2026 CMC client assets already migrated and monetised. The distinction between announced scope and delivered operation is essential. Launch timing, migration success, trading behaviour, service costs and revenue sharing will determine the realised economics.[1][2][3]

Trading income contains more than client dealing spreads

The annual result also requires care in interpreting “trading”. CMC disclosed approximately £2.4 million of net trading income from unrealised gains on CapX private-market investments and about £5.5 million of treasury-related trading income. These are company-disclosed contributors within a broader trading outcome; they are not equivalent to ordinary retail or institutional client activity.[1][2][3]

Even removing both disclosed amounts as an analytical exercise would leave more than £281 million of net trading income, so they do not overturn the finding that trading dominated. The exercise should not be treated as a restated audited measure because the categories may not map cleanly to one alternative segment definition. It simply shows that the word “trading” spans client-facing and treasury or investment effects.[1][2][3]

Market conditions also matter. Trading income can expand when volatility, customer activity and product demand rise, but it can fall when conditions normalise. Investing income may be linked more closely to assets, accounts and transaction volumes in stockbroking. The commercial value of diversification is therefore partly a reduction in dependence on one market regime, even before the smaller line overtakes the larger one.[1][2][3]

Profit growth did not arise from income alone

CMC reported profit before tax of £101.3 million, up 20%, and EBITDA of £117.8 million, up 14%. Profit before tax grew faster than net operating income despite an Australian remediation charge, showing that cost and below-EBITDA movements also affected the result. The public release does not support assigning the entire profit increase to the trading-income bridge.[1][2][3]

The distinction matters for forward estimates. New platforms and partnerships can require expenditure before revenue arrives. A launch may increase depreciation, support costs or partner commissions while still being strategically attractive. Conversely, a year of strong client trading can produce operating leverage on existing infrastructure. Comparing only revenue growth rates would miss those timing effects.[1][2][3]

CMC's preliminary results were unaudited at announcement, while the later annual report provides the fuller statutory record. This pack uses the annual figures for the line-by-line reconstruction and the preliminary release for management's description of initiatives. Where rounded press-release figures differ slightly from precise annual-report values, the precise values govern the calculations.[1][2][3]

What would demonstrate a completed diversification shift

A stronger diversification conclusion would require the investing and partnership businesses to contribute a growing share of net operating income across several market conditions, with transparent retention after partner commissions and evidence of operating leverage. Successful migration of the Westpac and ASB arrangements would be a major test because the announced scale is much larger than a pilot.[1][2][3]

The conclusion would weaken if headline account access expanded while net income, margins or profit failed to follow, or if the investing contribution depended on one unusually active period. It would strengthen if investing revenue remained resilient during a weaker trading year and if distribution deductions grew more slowly than the income they enabled.[1][2][3]

Concentration should also be measured against the level, not only the change. Trading supplied £289.7 million of the £392.6 million net-operating-income total, while investing supplied £57.8 million. The remaining interest and other lines contributed about £45.1 million. Even if investing repeated 30% growth while trading stopped growing, several periods would be required before the mix became balanced. That simple scale effect is why a successful diversification programme can be strategically important well before it becomes the largest reported income source.[1][2][3]

The concentration ratio should be repeated on a consistent basis in later periods. A diversification strategy becomes more convincing when non-trading activities supply a growing share of both absolute income and incremental profit across more than one market regime. A single strong trading year can otherwise make smaller new businesses appear less consequential than their strategic role.[1][2][3]

CMC's FY2026 record supports both parts of the story. The group built a larger investing business and opened credible routes into embedded distribution. At the same time, trading remained responsible for nearly four-fifths of the year's net-operating-income increase. That is not a criticism of diversification; it is the accurate measurement of how far the transition had progressed by 31 March 2026.[1][2][3]

Report an error or submit an update