CMC Markets (LSE:CMCX) shares rocketed in Wednesday's trade, rising 29% to 592p, after it upgraded full-year net operating income guidance by nearly 20% on accelerating B2B platform momentum.
The London-listed retail and institutional financial trading group now expects full-year NOI of at least £550 million, materially ahead of prior guidance of £460 million to £480 million, with EBITDA guided at £250 million.
Operating expenses, excluding variable remuneration, remain guided at approximately £280 million, unchanged from previous guidance.
The upgrade reflects what CMC described as operational gearing in its B2B division, where income growth is being delivered against a largely fixed cost base, expanding profit margins.
CMC said its B2B platform business has "several important milestones" expected over the next 12 months alongside a continuing pipeline of new opportunities, suggesting the current trajectory has room to extend.
The group's next scheduled update is the half-year results on 19 November.
A genuine step-change
Panmure Liberum analyst Barun Singh described it as a genuine step change, rather than incremental guidance creep.
In a note, the analyst commented that with operating expenses unchanged (at approximately £280m), so every incremental pound of revenue above the prior guidance range is falling through at exceptional margins.
Singh also highlighted management's description of B2B growth as "exponential and exceptional", and its reference to a "continuous pipeline of new B2B opportunities" beyond the already-announced Westpac, ASB Bank and neobank milestones suggests the 1 July guidance upgrade may not be the last, with the group's half-year results on 19 November the next scheduled checkpoint.
Despite the apparent bullishness, the broker's price target is pitched at 380p, and repeated a 'hold' rating.
