Financial services CMC Markets reported disappointing results, despite its lockdown success and confident talk of a company split.
Its half-year revenues almost halved to £128m. Profit dropped from £141m last results to £36m, which forced CMC to hack the dividend from 9.2p to just 3.5p.
This is a massive blow to Lord Cruddas, chief executive, who owns more than 60 per cent of the stock.
However, Lord Cruddas said he was “very pleased” to see the business is operating above pre-pandemic levels.
The former Conservative party co-treasurer is working on a plan to split the business in two: one for the leveraged spread bets and another for the stockbroking business.
He believes this will “unlock the significant value within the current Group structure” and the Board is expected to start this review before year end and complete it by June 2022.
CMC sells derivatives called spread bets and contracts for difference to punters who place leveraged wagers on the direction of markets.
This type of betting is high risk because most derivatives customers lose money. Regulators around the world have cracked down on derivatives trading to limit amateur losses.
Some in the City believe that CMC’s broking business and wealth management plans are under-appreciated by the stock market.