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

Lord Cruddas has taken another hit after CMC Markets warned of a slowdown in client trading.

The spread betting business, which the Tory colleague founded in 1989, said “quiet market conditions” had led to a drop in trading activity of between 15 and 20 percent since April.

As a result, the financial services company said this should have a “negative impact” on earnings for the three months to June 30.

The gloomy outlook came even as CMC said revenue was up 2 per cent in the year to the end of March to £288.4 million.

But profits fell 43 per cent to £52.2 million due to technology investment costs, while the number of active trading clients fell 9 per cent to 58,737.

CMC shares, which floated at 240p in February 2016, fell 2.5 percent, 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 174 million CMC shares, nearly 63 percent of the company.

Shore Capital analyst Vivek Raja said: “CMC’s share price has underperformed in recent years due to increased post-pandemic trading, while the company has issued a series of profit warnings over the past year largely related to new strategic initiatives. .’

The FTSE 100 rose 0.3 percent, or 24.09 points, to 7594.78 and the FTSE 250 fell 0.01 percent, or 2.31 points, to 19188.5.

Official data showed that employment has reached an all-time high and wages are rising sharply, fueling inflation fears.

Mining stocks rose after China cut the cost of seven-day loans for the first time in a decade to boost demand.

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

Stock watch – Pennant International

Shares in Pennant International rose 5.1 percent, or 1.8 pence, to 37 pence after it secured the first sale of its new software in a string of contracts won.

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

This includes using the GenS software, which helps track when products need maintenance and is expected to launch in early 2024.

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

Victoria Scholar, head of investment at Interactive Investor, said: “This is in a bid to boost China’s economy, which has struggled with a bumpy recovery since the lifting of anti-Covid lockdown measures late last year.”

There was also a rebound in oil prices as Brent crude rose nearly 2 percent to more than $74 a barrel.

BP was up 0.5 percent, or 2.25p, to 464.85p, Shell added 0.8 percent, or 18p, to 2296p, Harbor Energy was up 2.4 percent, or 5.9p, to 251.3p and Energean gained 2.7 percent, or 29p, to 1103p.

Admiral Group fell 5.1 percent, or 119p, to 2209p after Citigroup downgraded its rating from “neutral” to “sell” and lowered its price target from 2162p to 2097p.

It led to a sell-off in the insurance sector, with Direct Line falling 2.7 percent, or 4.5 pence, to 160.7 pence, Hiscox falling 1.6 percent, or 18 pence, to 1,106 pence, and Beazley falling 1.1 percent, or 6 pence. .5 pence lost at 568p.

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

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

William Hill’s owner has sold his Latvian company to a Scandinavian gaming company for £24.6 million.

Betting group 888 said the sale to Paf Consulting Abp will raise money from a non-core market. Shares gained 4.5 percent, or 4.8p, ​​to 111.5p.

Ashtead posted record sales and profits as it cashed in on customers who chose to rent rather than own equipment. Sales rose 24 per cent to £7.66 billion in the year to the end of April.

Profits rose 30 percent to £1.71 billion. But the equipment rental company was dragged down by a weaker performance in its UK arm. Shares fell 0.04 percent, or 2 pence, to 5,412 pence.