(Reuters) - CMC Markets said on Friday that it expects a drop in full-year profits as subdued trading activity weighed on investing net revenue in August, sending shares of the online trading platform down 20% in early trade.
Trading platforms are struggling with a slowdown in client activity as market volatility eased from highs seen during Russia's invasion of Ukraine last year and the COVID-19 pandemic.
The company said it expects full-year net operating income of 250 million pounds to 280 million pounds ($314.2 million to $351.9 million). That is lower than the 288.4 million pounds it posted in fiscal 2023.
Shares were down 18% at 102.8p as of 0714 GMT.
"This is clearly disappointing, and is another reminder that CMC can suffer from periods of subdued trading activity," Peel Hunt (LON:PEEL) analysts said in a note.
London-listed CMC Markets warned in July that subdued trading at the start of fiscal 2024 would hit first-quarter net operating income.
That continued in August, with lower monetisation of client trading activity leading to trading and investing net revenues trending 20% lower than last year, the company said on Friday.
However, CMC Markets, which has also been battling higher costs due to a weaker pound, kept its annual operating costs outlook unchanged at 240 million pounds. ($1 = 0.7958 pounds)