In a largely numbers-free update for the three months to the end of December, the contracts-for-difference (CFD) broker, which also operates a stock-broking business and white label partnerships with banks, said net operating income “continued to outperform expectations”.
Stronger client retention than the 82% achieved in the first half led to higher revenue per active client to offset lower client income because of the softer market conditions throughout much of the quarter.
The fully listed group said the final quarter of its financial year to end-March had “started well”, which meant that management was confident of net operating income for the full year being “ahead of the upper end of the current range of analyst forecasts”, which range from £184.1mln to £189.3mln.
“We continue to have confidence in our ability to deliver further growth through platform partnerships and our strategy of attracting higher valued experienced clients,” said chief executive Peter Cruddas.
“With the recent and forthcoming regulatory changes, we continue to believe this is the right strategy for the business going forwards, especially as our platform technology means we are an attractive proposition to a wide array of experienced clients and institutional partners around the world.”
Broker Shore Capital said it expects to put through another double-digit upgrade to current-year earnings per share, even though its forecasts were already at the top of the range.
“The retention ratio commentary is most impressive,” the ShoreCap analysts said, adding that it was “a reassuring update and endorses the recent change in business model”.