Tory donor Lord Cruddas to collect £22m payout
CONSERVATIVE PARTY donor Lord Cruddas will receive £22m in dividend payments despite profits slumping at his spread-betting company.
CMC Markets’ share price fell by 21pc after it said profits had dropped by 59pc from £224m to £92.1m. None the less, Lord Cruddas said he was “delighted” by the performance of the group.
CMC Markets’ profits had spiked in the previous year as market volatility during the pandemic sparked an uptick in trading volumes.
Boris Johnson was accused of “cronyism” by opposition leaders when he awarded a peerage to Lord Cruddas in 2020. Lord Cruddas, who has a 58pc stake in CMC Markets, donated £500,000 to the Conservative Party days after joining the House of Lords.
CMC Markets’ operating income fell by 31pc to £281m in the year ended March 31. The spread-betting company was reportedly considering a break-up last year after issuing a profit warning that triggered a share price decline of 25pc. The slump wiped almost £200m off Lord Cruddas’s fortune.
James Richards, the company’s chairman, led a review into whether the £755m business could be split into two separate entities.
Mr Richards was looking at whether the company could be carved up into a spread-betting division and a separate business comprising CMC Markets’ tech and new investment products.
Lord Cruddas said the company would continue to use technology to drive down costs for retail investors looking to run their own investment portfolios online. He said ordinary investors still faced fees that were “too high and too expensive”.
He said: “We will utilise our platform technology, including pricing and execution, to drive down the transaction costs of investments for retail clients, just like we did in Australia, where we are the number two investment platform for retail investors.
“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.”