The business said it had seen “subdued market conditions” this month, with August revenue set to be down 20% on last year. Retail trading in particular has fallen off, leading to a greater reliance on lower-margin institutional investors.
“Whilst underlying market activity has the potential to recover, should year-to-date market conditions continue for the remainder of FY24 then it is expected that net operating income will be between £250 and £280 million,” CMC said.
“Core KPIs including client money, assets under administration, and active clients across both the trading and investing businesses remain robust with no material change seen through recent weeks.”
Shares were already down almost 50% this year even before today’s profit warning, with much of the fall coming after it warned of a “challenging environment” in March. The shares are down 77% since peaking in 2021. Today, they lost another 18.6% to 99.3p.
Cruddas owns 59% of shares, meaning his stake is worth around £166 million, down from £200 million before markets opened. In 2021, his holding was worth nearly £1 billion.
Analysts at Peel Hunt put their 285p target price for CMC under review, saying “The share price has been weak of late and whilst a range of strategic initiatives should deliver longer-term growth, as things stand the group clearly continues to face significant market headwinds.”
Cruddas has been CEO of CMC Markets since its creation in 1989. Boris Johnson made him a life peer in 2021, against the advice of the House of Lords Appointments Commission.
Cruddas is the president of the Conservative Democratic Organisation, a pro-Boris Johnson movement within the Tory party.