CMC Markets’ founder, Peter Cruddas, has added another £14m to his fortune after the spread-betting business announced a huge increase in its profits and confirmed plans for a £1bn flotation.
The company is talks with investment banks over the long-awaited move and is expected to appoint advisers in the next fortnight for the initial public offering.
CMC laid the groundwork for the expected launch with a 61 per cent rise in pre-tax profits to £51.9m for the year to 31 March.
As a result it upped its dividend from £12m to £16m, meaning a payout of £14.4m for Mr Cruddas, who holds a 90 per cent stake in CMC. The balance is owned by the US bank Goldman Sachs.
The Hackney-born entrepreneur founded the company with £10,000 in 1989. It now has around 75,000 regular traders a year. Client numbers rose 11 per cent and revenues were up 18 per cent to £143.7m over the year.
Mr Cruddas, who last tried to list on the stock market in 2007, before the financial crisis struck, said: “The bottom line is that it just feels like we need to be a public company now.”
The flotation is likely to generate hundreds of millions of pounds in cash – “a lot” of which will go to Mr Cruddas’s charitable foundation, he added.
He resumed day-to-day control two years ago after a period in the background. The company has invested heavily in its technology, generating a surge in mobile trading.CMC largely shrugged off the bombshell lobbed into currency markets by the Swiss National Bank in January, when it suddenly scrapped its €1.20 peg for the Swiss franc and sent the value of the “Swissie” soaring. The company took a £4m hit, in contrast to the much bigger £30m blow to its larger competitor, IG Group.
Mr Cruddas added: “Our strong risk management meant that we saw only a minimal impact from the Swiss National Bank decision, and our strong balance sheet and capital ratio are increasingly attracting clients from a number of our competitors, as they ‘fly to safety’.”
IG reported that its trading was “solid” in the three months to May, leaving it well on track to hit its full-year hopes.
The company has extended its stockbroking service into the Netherlands and is set to open a new office in Dubai in the weeks ahead after securing regulatory approvals.Reuse content