CMC Markets plc

Good morning, everybody, and welcome to our financial year 25 results presentation. My name is Peter Cruddas, and joining me today is David Feinberg, Lawrence Booth, and Matt Lewis. In terms of the agenda today, I will provide an exciting update on the future state of CMC. David will then cover the financials. Lawrence will provide a strategic update and Matt will speak on our D2C business before handing back to me to wrap up. So let's get started. Over the last 10 years or so, we have built a high performing business around two core verticals, direct to consumer and platform technology as a service or B2B. We have created a world-class multi-asset trading and investing journey for retail clients, delivering seamless 24-5 access across global markets. We have also scaled a powerful institutional-grade platform delivering execution, liquidity and trading infrastructure to fintechs, neobanks and established financial institutions. Together, this two vertical model has allowed us to diversify our revenue, broaden our global client base and enhance operational leverage. It has laid the foundation for sustainable long-term growth and it is the CMC that you see today. However, it is not the CMC you will see tomorrow. The financial world is changing and it is changing quickly. We are seeing profound shifts in how people access markets, how they invest, and what they expect from a trading platform. At the same time, new technologies are emerging that promise to reshape the future of finance entirely. What we built at CMC, our successful two vertical model, gives us a strong foundation. But standing still is not an option. That means rethinking how we operate, how we innovate and how we deliver value to our clients. This is our opportunity to shape what the next generation of financial services looks like. And that is why today we are introducing our third vertical. That third vertical is our DeFi and Web3 capabilities, the detail of which you can see on slide three. This isn't a pivot, it's a progression, a natural evolution of everything we already do. We have built a strong foundation through our two core verticals, but we recognize the financial world is changing, and so are we. This third vertical builds on everything we have already achieved. It's underpinned by the same robust infrastructure, disciplined investment, and client-first thinking. and it ensures we remain relevant and competitive as the markets continue to evolve. It is the future of CMC and financial markets more generally, and I would now like to spend a bit of time looking at what it means in practice for our business. Web3 is not a distant idea. It's already reshaping the financial world. And for CMC, it's a natural extension of what we already do. At its core, Web3 is about building financial infrastructure that is faster, more accessible, and more scalable. It takes everything we have built in traditional finance and enhances it through blockchain technologies. The real opportunity lies in the convergence of traditional finance and decentralized finance or TradFi and DeFi. This convergence blends the trust and reliability of established systems with the efficiency and flexibility of decentralized technology. as these lines between asset classes and ecosystems continue to merge cmc is positioned right at the center we are building the infrastructure to serve clients across both spaces the shift to web 3 isn't optional it's inevitable and at cmc we are getting ready to be at the heart of it The shift to DeFi and Web3 isn't about changing what we do. As I've already said, this is a natural evolution of CMC's core capabilities, only more efficient, more accessible, and more scalable. Our move into this space builds directly on our strengths delivering 24-7 trading, seamless access to global markets, and real-time execution. Through Web3, we're enabling instant on and off ramps for digital currencies, integrated payments, and automated settlement through smart contracts. Tokenization opens new forms of liquidity and fractional ownership. Self-custody gives clients full, secure control over their assets. It's a continuation of our technology journey. In short, we're not reinventing CMC. We're taking what we already do best and preparing it for the next generation of trading and investing. And we believe this evolution will deliver meaningful value for our clients and for our shareholders. So with the introduction of our third vertical, CMC is now positioned at the center of a major industry shift, one that brings together traditional and decentralized execution, clearing, and finance. We already have several initiatives live. For example, in 2025, we launched weekend crypto trading, adding 104 trading days a year, a step towards our vision of 24-7 global market access. Our acquisition of StrikeX is another key milestone, bringing us native blockchain talent and proven capabilities in tokenization, wallet infrastructure and digital asset execution. And Lawrence will share more on that shortly. We've also expanded our payments infrastructure. Clients can now deposit and withdraw in digital currencies, improving access to Web3 markets and enabling real-time settlement. Looking ahead, we're developing tokenized private equity products, fractional fund access, and a multi-asset wallet to seamlessly unify Tradfee and DeFi. Just as we pioneered online trading in the 1990s, we're now leading the next chapter in financial innovation. I'll be back shortly to close things off, but for now, I'd like to hand over to David for the financial update.

Thank you, Peter, and good morning, everyone. I'd like to begin by turning to slide eight, which looks at our group financial metrics and performance. Net operating income was a robust £340 million for the full year, which represents an increase of 2%. This was driven by continued growth across our PTAS and B2B segment, as well as a strong performance from our Invest Australia business and Treasury Management and Capital Markets division. We've maintained a disciplined approach to cost control, with operating expenses down 2% on the prior year. That operational discipline, combined with top-line performance, has delivered a 12% increase in EBITDA. Our profit before tax was £84.5 million, with a profit before tax margin of around 25%, reflecting our net operating income performance and strategic cost management, as well as the impact of lower one-off charges. The board is proposing a dividend per share for the full year of 11.4 pence, up 37% from 8.3 pence per share last year. This remains consistent with our dividend policy to return 50% of post-tax profits to shareholders. Turning now to look at the income statement in a bit more detail. Our robust net operating income performance was driven by a combination of factors. A record year in Australia's stockbroking drove a 31% increase in investing net revenue, with our Treasury Management Division performing strongly to deliver 18% increase in interest, treasury and other income. Trading net revenue was impacted by more subdued market conditions through 2025, though we have seen these conditions reverse somewhat as we enter into the new financial year. Operating costs, excluding variable REM, were £230 million, down 3% as we maintain a sharp focus on costs and disciplined approach to investment. Variable REM was up on last year, which is in line with the improved level of profitability. The result of the above is a profit before tax of £84.5 million and an improving PBT margin of 25%. both of which I spoke to on an earlier slide. Looking now at our cost base in a bit more detail. Our focus on cost discipline remains a key strength with total operating expenses down 2% year on year to 250 million pounds. This reduction was supported by tight control across fixed REM, premise costs and marketing. Net staff costs, which remain our largest cost item, fell by 4% with a 7% decline in fixed REM. IT costs rose 17% as we invested in automation, platform resilience, and infrastructure to support scalability and innovation across all verticals. FY 2025 includes a one-off charge of 4.3 million pounds relating to a customer remediation in Australia. This was part of an industry-wide regulatory review and is expected to be fully utilised in FY2026. As a group, we remain focused on delivering further efficiencies while continuing to invest in capabilities to support our long-term growth and I would now like to cover this on the next slide. In FY 2025, our operating expenses total 250 million pounds. Over the next two years, we expect total operating expenses to remain broadly stable or rise moderately as we reinvest in strategic growth initiatives. This reinvestment is tightly aligned with our strategic priorities, including the development of the third vertical, Web 3.0 and DeFi. At the same time, we are actively driving operational efficiencies across the business. That includes improving engagement and retention in our core hubs, expanding delivery capacity in lower cost strategic locations, and streamlining legacy systems. These efforts will help us deliver scalable growth without disproportionately increasing our cost base. This balanced approach ensures we're investing in the future while continue to strengthen profitability. Our capital allocation strategy continues to strike the right balance between investing for the long-term growth and delivering consistent shareholder returns. We remain committed to paying dividends in line with the 50% of after-tax profits while also considering share buybacks when appropriate. At the same time, we are deploying surplus capital in focused and disciplined way to support the evolution of our three vertical model, including selective M&A, which strengthens our platform or opens up new markets, such as the recent investment in StrikeX to take us to a controlling stake. Alongside this, we continue to maintain a strong balance sheet with robust regulatory capital and liquidity to support resilience and flexibility. That is all from me now, and I'd like to hand over to Lawrence, who's going to cover our strategic and operational progress.

Thank you, Dave, and good morning, everyone. I'd now like to build on some of the points Peter touched on and take a closer look at some of the key strategic initiatives and forward-looking plans we have underway across the business in relation to our third vertical. One of the most exciting developments within our third vertical is tokenization. Access to traditional equity markets remains slow, costly, and in many cases, heavily restricted. Tokenization offers a way to remove those barriers, giving investors digital representations of real-world shares that can be traded more freely, efficiently, and globally. Importantly, it also enables fractional ownership, which opens up high value assets like Tesla or Apple to a broader market. For investors, this means more flexibility. For CMC, it means broader participation and deeper liquidity. And this aligns directly with our Web3 vision, which is 24-7 borderless access to the world's most iconic companies. We're not waiting for this shift to happen. We're actively pursuing it and it will play a key role in shaping the future of how our clients trade, invest and build wealth. The CMC multi-asset wallet will be a key piece of infrastructure that will unlock the future of trading. The wallet is being built as a unified experience, one place where clients can hold and trade both traditional and tokenized assets. It's a true convergence of TradFi and DeFi, delivering seamless access to multiple asset classes through a single interface. As financial markets evolve, clients expect to move easily between equities, crypto, tokenized funds, and more. And our wallet is designed to meet that demand. Importantly, this is not a DeFi solution built on unregulated foundations. It's underpinned by CMC's existing regulatory infrastructure and institutional-grade security and tech, giving clients the confidence they need to engage. The multi-asset wallet is our gateway to tokenization and a major step in building a next generation investment platform. And we look forward to sharing more on our progress into the future. Turning now to slide 16, which looks at our investment in StrikeX. Our majority stake in StrikeX is a key strategic milestone as we build out our third vertical focused on DeFi and Web3. This acquisition gives us scalable access to digital asset infrastructure and embeds native crypto capability directly within the group. StrikeX brings deep blockchain expertise and accelerates our innovation roadmap with a wallet and tokenization stack that enhances flexibility to support future blockchain formats. This infrastructure strengthens our ability to deliver a seamless multi-asset experience across both traditional and tokenized products. Beyond the technical capability, StrikeX also helps us position for the future. As tokenized assets continue to gain traction globally, we are ensuring CMC is not just ready to participate, but it is positioned to lead in this space. In short, this move significantly enhances our long-term relevance and positions us to capture meaningful share in what is a multi-trillion dollar digital asset opportunity. And this slide really captures what we're building at CMC, a unified multi-asset platform that bridges traditional finance and Web3. We're not choosing one over the other, we're bringing them together. Our ambition is to be the go-to partner for clients navigating both ecosystems, whether they're investing in traditional assets or engaging with tokenized markets or DeFi. By combining the trust and infrastructure of Tradfire with the innovation and flexibility of Web3, CMC is positioned to power the next era of investing and it is something we are actively building today. I'd now like to spend a few minutes looking at our PTAS or B2B business. Our B2B segment continues to perform well. Over the past year, we've secured several strategic partnerships with major names in both fintech and banking, a clear sign that CMC is becoming the partner of choice for scalable white-labelled infrastructure. From a pipeline perspective, we're excited by the trend. We have strong near-term visibility and our longer-term pipeline is healthy, spanning multiple regions and verticals. Overall, we feel confident about the outlook and continue to believe this vertical will be a key driver of the future growth of the group. Our B2B strategy through our CMC Connect brand continues to build momentum. This is underpinned by a proven track record of delivering high-quality, white-labelled solutions to major global institutions. Over the last 12 months, we have secured several strategic mandates with prominent names in banking and fintech. These include partnerships with Revolut and ASB Bank that have significantly enhanced our credibility and brand visibility across the industry. This growing reputation is now translating into meaningful commercial traction with increased inbound interest from prospective partners. What we're seeing is the flywheel effect of credibility leading to scale. And as we deliver for these institutions, the strength of our platform and technology becomes more widely recognized. And the more we build, the more attractive we become as a partner. As I mentioned on the previous slide, our pipeline is healthy and well-developed, with strategic opportunities in new regions across multiple asset classes. CMC Connect is a foundational part of our three vertical model, and we remain confident in its role as a long-term growth driver, helping us deliver sustained multi-year value for the business and our shareholders. And with that, I'd now like to hand over to Matt, who is going to cover our DTC business in more detail.