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British spread betting firm CMC Markets is looking toward a public listing with a potentially stratospheric value of £1 billion within a matter of months after it yesterday reported that it is back in the black following extremely high losses last year, a dynamic which is quite the reverse of many of its peers.
Peter Cruddas, who returned to the company as chief executive in January 2013 after a period as Chairman, has indicated that the firm’s strengthening performance means that it could be ready for a float on the stock market within “months” if the market is right.
The company announced on Friday that it had made pre-tax profits of £32.8 million during the full year ending March 31. The tables have turned compared to its results during the previous year in which the company made a dramatic £4 million loss CMC Markets, which is now half way through its twenty-fifth year of operations, will also pay a dividend to investors of 8.7p per share, totalling £12 million.
10% of the company was bought by Goldman Sachs in November 2007, but Mr. Cruddas has been reported to have stated that he is “not under any pressure” from the bank to float CMC.
“I’ve spent the last two years cleaning up the balance sheet, so there are no legacies to be carried forward,” Mr Cruddas, who owns 90pc of the company, told the Telegraph. “We’ve got lots of cash, the regulatory environment is so tough and we have a great capital ratio.”
“We’ll probably wait for another year’s results, but if the market is strong we will float sooner” concluded Mr. Cruddas.
Should this come to fruition, CMC Markets would join firms such as Plus500 and payment processing company SafeCharge within the realms of companies which rose to extremely high financial value in a relatively short time, however this is not the first time that CMC Markets has considered going public. “We’re in such a strong position now, compared to when we tried to float in 2006,” the former Conservative Party co-treasurer told The Telegraph.
“The FTSE 250 dropped 10% on that day – it was a bit of a disaster. The markets didn’t have an appetite for any company.” Mr Cruddas added: “Being back at the helm gives me more control about the destiny of the company, and we will float – it’s a way of rewarding the staff.” Mr. Cruddas is clearly in for the long term, with no plans to seek pastures new should the IPO proceed, wishing to remain at the helm of the company for a further ten years.
Mr Cruddas, who is a high profile figure among Britain’s political and banking classes, won a libel case against The Sunday Times after it alleged that he had offered access to David Cameron in return for major financial donations. This did irreprable damage to his position within the Conservative Party, and subsequent to the publication by the Sunday Times, Mr. Cruddas was removed from his political position. Under the steerage of astute Mr. Cruddas, CMC Markets’ net operating income increased by 14% to £122 million during the financial year.