(Adds details from statement, analyst comment, shares)
Sept 3 (Reuters) - CMC Markets on Thursday reiterated that it expects 2021 profit to top the upper end of market consensus, although the online trading platform warned of higher costs as it brought on more clients during the COVID-19 pandemic.
Shares of the company, whose online trading platforms allow individuals to make leveraged bets on financial markets, rose 8.3% to 338 pence in early trading.
“Client income retention has remained particularly strong and well in excess of the guidance of above 80%,” the British company said in a statement, adding that trading performance in July and August was strong.
CMC and rivals Plus500 and IG Group, have benefited from the coronavirus-induced market volatility. Markets had tumbled earlier in the year, but have recovered in recent weeks.
Analysts at RBC said they expect the incremental cost as signalled by CMC to be much lower than the increase in income.
CMC said it would continue to focus on its investment in technology which was paying off in attracting and retaining clients.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.