MARKET REPORT: Spread betting woe wipes £12m off Cruddas riches

Lord Cruddas has suffered a fresh blow after CMC Markets warned of a slowdown in trading by clients.

The spread betting business, which the Tory peer set up in 1989, said ‘quiet market conditions’ since April have resulted in trading activity falling between 15 per cent and 20 per cent.

As a result, the financial services group said this should ‘negatively impact’ its revenue for the three months to June 30.

The bleak outlook came even as CMC said revenues rose 2 per cent to £288.4million in the year to the end of March. 

But profit slumped 43 per cent to £52.2million due to the cost of investing in technology while the number of active trading clients fell 9 per cent to 58,737.

Profits hit: Lord Cruddas’s spread betting business CMC Markets said ‘quiet market conditions’ since April have resulted in trading activity falling between 15% and 20%

CMC shares, which floated at 240p in February 2016, fell 2.5 per cent, or 4.2p, to 165.4p.

The stock remains well below its peak of 538p in April 2021.

Cruddas – the rags-to-riches businessman who is a staunch ally of former prime minister Boris Johnson – and his wife Fiona own 174m CMC shares, almost 63 per cent of the company.

Vivek Raja, analyst at Shore Capital, said: ‘CMC’s share price has performed poorly over the past couple of years, coming off elevated trading post pandemic, whilst, over the past year, the company has issued a series of profit warnings largely relating to new strategic initiatives.’

The FTSE 100 rose 0.3 per cent, or 24.09 points, to 7594.78 and the FTSE 250 edged down 0.01 per cent, or 2.31 points, to 19188.5.

Official data showed employment levels have reached a record high and wages are rising sharply, fuelling fears over inflation.

Mining stocks rallied after China cut seven-day borrowing costs for the first time in ten months to bolster demand.

Glencore surged 5.3 per cent, or 23.05p, to 460p, Rio Tinto rose 2.7 per cent, or 135p, to 5203p, Anglo American added 2.8 per cent, or 66.5p, to 2483p and Antofagasta gained 3.5 per cent, or 51.5p, to 1507.5p.

Stock Watch – Pennant International

Shares in Pennant International rose 5.1 per cent, or 1.8p, to 37p after it secured the first sale of its new software among a series of contract wins.

The AIM-listed helicopter maintenance group will work on an Australian defence programme for £2.8million over five years.

This will involve using its GenS software, which helps track when products require servicing and is expected to launch in early 2024.

Pennant also won a £250,000 contract with a European defence department.

Victoria Scholar, head of investment at Interactive Investor, said: ‘This is in a bid to stimulate the Chinese economy which has struggled with a bumpy recovery since unwinding its anti-covid lockdown measures late last year.’

There was also a rebound in oil prices as Brent crude rose almost 2 per cent to over $74 a barrel.

BP rose 0.5 per cent, or 2.25p, to 464.85p, Shell added 0.8 per cent, or 18p, to 2296p, Harbour Energy increased by 2.4 per cent, or 5.9p, to 251.3p and Energean gained 2.7 per cent, or 29p, to 1103p.

Admiral Group sank by 5.1 per cent, or 119p, to 2209p after Citigroup lowered its rating to ‘sell’ from ‘neutral’ and cut the target price to 2097p from 2162p.

It sparked a sell-off among the insurance sector, with Direct Line dropping 2.7 per cent, or 4.5p, to 160.7p, Hiscox sliding 1.6 per cent, or 18p, to 1106p and Beazley shedding 1.1 per cent, or 6.5p, to 568p.

There was good news for Capita after it won a five-year contract worth £50million with the City of London Police. 

The outsourcing giant, which collects the BBC licence fee, will help run the force’s new fraud reporting service from 2024. Shares remained flat at 32.96p.

The owner of William Hill has sold its Latvian business to a Nordic gaming company for £24.6million. 

Betting group 888 said selling to Paf Consulting Abp will bring in cash from a non-core market. Shares gained 4.5 per cent, or 4.8p, to 111.5p.

Ashtead posted record revenues and profits as it cashed in on customers choosing to rent rather than own equipment. Revenue soared 24 per cent to £7.66billion in the year to the end of April.

Profit rose 30 per cent to £1.71billion. But the equipment rental firm was dragged down by a weaker performance across its UK arm. Shares fell 0.04 per cent, or 2p, to 5412p.

This post first appeared on Dailymail.co.uk