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End of share trading boom hits dividend to top Tory donor Lord Cruddas

·2-min read
Conservative Party donor Peter Cruddas was sworn in to the House of Lords in February 2021 following a row over his appointment (House of Lords/PA) (PA Archive)
Conservative Party donor Peter Cruddas was sworn in to the House of Lords in February 2021 following a row over his appointment (House of Lords/PA) (PA Archive)

LORD Peter Cruddas, a top Tory party donor and Boris backer, today felt the pain from the end of the lockdown inspired investment boom that saw new customers flock to share trading.

His CMC Markets firm saw profits for the year to March sink 59% to £92 million, on income down 31% to £282 million.

That in turn hits the dividend, which is down 60%. Last year Cruddas bagged a £55 million payout on his stake in CMC. He had just donated £500,000 to the Tory party at that time.

The half-year dividend of 8.8p announced today is worth a more modest £15 million to Cruddas, who left school at 16 and was once dubbed the richest man in the City.

He is a former Tory party treasurer but left under a cloud over offering access to then PM David Cameron in return for donations.

Unusually, he was not around today to take questions about either his own full-year results or whether he still backs the Prime Minister.

Under lockdown a new breed of investor opened equity accounts for the first time, spending money they had saved during the pandemic. That saw all City brokers boom.

CMC is moving to grow its “non-leveraged” arm with plans to target Hargreaves Lansdown customers who prefer simple equities rather than riskier, more complicated spread bets.

The number of “non-leveraged” customers is up 6% to more than 246,000 suggesting the diversification strategy is working, though that business at the moment is focussed on Australia. A formal UK launch will come later, when Cruddas is happy the technology is right.

He said in the statement to the City: "I am delighted to report another year of impressive performance from both a strategic and financial standpoint. Excluding the exceptional COVID-19 impacted prior year, which due to market volatility saw unusually significant trading volumes, this is a record net operating income result for the Group.

Over the last year we have taken steps to define the strategic direction and diversification of the Group, building on our existing technology to launch a new investment platform that will unlock significant shareholder value and challenge the existing client transaction fee cost structures.”

Last September CMC issued a profit warning that saw the shares crash. The stock lost 34p, 11%, today to 268p. That leaves the business valued at £770 million and the Cruddas stake at about £470 million.

He was delighted to join the House of Lords, saying at the time. “I love politics. I want to do my bit for Queen and country.”

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