Peter Cruddas tells David Hellier why it was just about time for a change
SEVERAL very noticeable things have changed since Peter Cruddas, the founder of CMC Markets, returned as full-time chief executive of the spread-betting group earlier this year.
For a start, CMC’s employees no longer get free fresh fruit and cornflakes when they come into work.
‘I may seem old fashioned but I believe hard work should be rewarded by big bonuses rather than fluffy HR perks like fresh fruit and cream teas. Coming to work is not a lifestyle, it’s the opportunity to create a career and a future,” says the 60 year-old Hackney-born man who founded the company with £10,000 in 1989.
The straight-talking Cruddas proclaims that he’s not being mean, as some of his detractors say he can be, but that he’d rather his employees focus on making large profits, so they can earn themselves bigger bonuses.
Shortly after returning to the group as its chief executive (since 2001, apart from a brief period, he had become a more hands-off chairman), Cruddas made other highly visible changes.
‘On returning as CEO I couldn’t help making some small, but to me, obvious changes to improve the work culture of the company,” he says.
“For example, I noticed some of the employees’ work attire had slipped a little. I wasn’t being critical of anybody’s personal dress sense but I’m a firm believer that you can’t be truly focused on work when you come in wearing flip flops and jeans. Personally, I shave and wear a suit and tie every day because it puts you in the right mindset to be sharp and professional at work, which is what you’re there for.
“I said to my new management team, if you’re with me, we are going to be successful. I’ve been successful in everything I’ve done,”
Despite the diktats, Cruddas protests he is no dictator. “The office is buzzing right now,” he says, pointing out that a number of people who had left the firm when he took a back-seat to focus more on his political links with the Conservative party, have returned.
Cruddas owns 90 per cent of CMC Markets, having sold a 10 per cent shareholding to the investment bank Goldman Sachs for more than £100m. That amount of money made him a very rich man but also gave him the opportunity to become slightly detached from the firm he had hitherto been responsible for guiding.
In January he used the full force of his majority shareholding to ease out Doug Richards, the chief executive and former finance director, bringing himself back into a full-time role.
One of the first things he did was to streamline the group’s management structure to give it a more focused look. There were inevitably casualties, with many executives forced to find new ways of making a living.
Then he moved the trading room in Singapore back to Australia, where there were synergies and cost cuts to be made.
The biggest focus has been on introducing the company’s flagship Next Generation trading platform, the introduction of which has been “harder than anticipated”. “I’ve brought a lot of leadership to the business. There were too many distractions before and now we’ve gone to the heart of the matter and now the company is focused. Our first six months’ results prove this.”
CMC Markets has had a relatively poor few years but now Cruddas says it is truly on the way back. Interim results announced in October point in the right direction, with revenues up 34 per cent at £66.2m and earnings before interest and depreciation at £26.6m.
Cruddas says a lot of former clients, as well as the handful of employees, are making their way back to the firm, and now the company is focused.
“I don’t think we handled going from the old software to the new software well before, but now we’re giving clients a good option. We’ve focused on contacting thousands of clients – the thing is that you can have the best platform and spreads in the industry but unless you pick up the phone to talk to clients there is no point in having a competitive advantage”
He says that one third of the clients the firm is gaining are new, and two-thirds are old. In the past few days confidence has been boosted further by the firm winning a number of awards from a trade publisher.
Cruddas shrugs off questions about the company’s current worth. When Goldman Sachs bought its stake the group was valued at more than £1bn. But most think it is worth significantly less now. Cruddas will only say that the firm will become more valuable over the next few months. “I’ve no interest in doing anything for at least six to 12 months. It would be stupid to think about it. We’re not talking to anybody but we will have more options in 12 months time.”
Cruddas has pledged he will devote himself fully to the firm for the next 10 years. And he expects it to be a period when he’s less distracted by politics, although who knows what would happen if the Conservative Party offered him a return to the fold after the scandal that cost him his job as co-treasurer.
He recently defeated the Sunday Times in a libel action after the newspaper wrongly accused him of promising access to David Cameron and George Osborne in return for donations.
The newspaper has applied for permission to appeal the decision but in the meantime Cruddas feels vindicated beyond question.
He is not happy with the lack of support he feels he has so far received from the Conservative Party and Cameron in particular. “If they had given me some support I would have dealt with it more easily.”
One gets the feeling he is back where he is happiest and most comfortable; building a business he started back up again, while being a strict fatherly figure to employees looking for a role model.
CV PETER CRUDDAS
Family: Wife, two children
Lives: London, Hertfordshire
School: Shoreditch Secondary
First Job: Telex operator, Western Union
Current Job: Founder & chief executive officer, CMC Markets
■ Is a keen supporter of Arsenal Football Club
■ When not hard at work, he enjoys playing golf, boasting a handicap of three
■ He is a strong supporter and donor to both the Duke of Edinburgh’s Award and the Prince’s Trust charity
■ He is particularly interested in helping disadvantaged and disengaged young children develop their potential and in 2006 set up The Peter Cruddas Foundation, which has so far partnered with and supported over 40 charities
■ His yacht, The Leopard 3, currently holds five world speed sailing records and five course records