CMC Markets founder Peter Cruddas added another £14 million to his fortune after the spread-betting business toasted a huge 61% rise in profits and confirmed plans for a £1 billion float.
The firm is talks with investment banks over the long-awaited move and is expected to appoint advisers in the next fortnight for the initial public offering, revealed by the Standard last week.
CMC laid the ground for the launch with a 61% rise in pre-tax profits to £51.9 million for the year to March 31.
As a result the firm upped its dividend from £12 million to £16 million, meaning a payout of £14.4 million for 90% shareholder Cruddas.
The Hackney-born entrepreneur founded the company with £10,000 in 1989. It now has around 75,000 regular traders a year. Client numbers rose 11% and revenues were up 18% to £143.7 million over the year.
Cruddas will retain a majority stake in the business, which he last tried to float in 2007 before the financial crisis struck. He said: “The bottom line is that it just feels like we need to be a public company now.”
The float is likely to generate hundreds of millions of pounds in cash, “a lot” of which will go to Cruddas’s charitable foundation, he added.
He resumed day-to-day control two years ago after a period in the background. The firm has invested heavily in its technology, generating a surge in mobile trading.
CMC largely shrugged off the bombshell lobbed into currency markets by the Swiss National Bank in January, which suddenly scrapped its €1.20 peg for the Swiss franc and sent the value of the “Swissie” soaring.
The firm took a £4 million hit, in contrast to the much bigger £30 million blow taken by larger rival IG Group.
Cruddas added: “Our strong risk management meant that we saw minimal impact from the SNB decision, and our strong balance sheet and capital ratio are increasingly attracting clients from competitors, as they ‘fly to safety’.”
IG said trading was “solid” in the three months to May, leaving it on track to hit full-year hopes.
The firm has extended its stockbroking offering into the Netherlands and is set to open a new office in Dubai in the weeks ahead after regulatory approvals.
