CMC Markets shares jump over 6% on Westpac platform deal

Investing.com -- CMC Markets Plc (LON:CMCX) shares rose more than 6% on Monday after the financial services company announced it will become the preferred platform supplier for Westpac’s online share trading services, expanding access to CMCX trading technology on mobile and desktop platforms.

The integration is expected to take roughly 12 months, with costs largely capitalized and ongoing expenses described as incremental. 

The UK-based company said post-integration, it expects to service about 40% more customers in its Australian stockbroking business, with domestic trading volumes rising by around 45%.

The transaction does not require regulatory or shareholder approval, according to the company. 

CMC Markets flagged in its announcement that the move could provide a “meaningful” revenue benefit to its Australian CMC Invest business.

RBC Capital Markets estimated that roughly 15% of CMCX’s net operating income came from Australian stockbroking in FY2025.

The company noted that integration will rely on deploying existing technology and scale. While integration costs are largely capitalized, CMCX said ongoing expenses will be incremental.

CMCX is the second-largest stockbroking firm in Australia, a position gained largely through the transition of clients from ANZ.

RBC Capital Markets said that with investment having peaked, FY25 results may offer a better indicator of the group’s future profitability potential.

The brokerage added that CMCX is trading on a CY26E price-to-earnings ratio of 10x, compared with the European diversified financials sector average of 15x.

RBC noted that “the group clearly is continually advancing its propositions to respond to industry developments,” while flagging the high-margin, debt-free, capital-generative nature of the business.

The company’s announcement emphasized that the expanded Westpac relationship is designed to increase service capacity and trading volumes. 

CMCX said the platform deal will allow it to handle “circa 40% more customers with increased domestic volumes of approximately 45%.”