CMC 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.
As a result, operating income could now fall to £250 million, having previously been expected to be £280 million. It added that other core figures such as the number of clients “remain robust”.
Shares were down by 13.5% to 105p today. They 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. Since peaking in April 2021, they have lost more than 80% of their value.
Cruddas owns 59% of shares, meaning he lost more than £25 million this morning with his stake now worth £175 million. In 2021, it was worth nearly £1 billion.
The Hackney-born peer has been one of Boris Johnson’s most vocal backers and is president of the Conservative Democratic Organisation, a pro-Johnson movement within the Tory party. Cruddas did not issue a statement alongside today’s profit warning. On social media site X - formerly known as Twitter - this morning, he posted a news story about Nigel Farage and reposted two messages in support of Donald Trump’s recent interview with Tucker Carlson, as well as a video of a man falling into a swimming pool.
The drop means CMC now appears all but certain to be relegated from the FTSE 250, having already been in line to fall out even before shares fell today. The next set of changes to the index will come at the start of September, based on share prices as of market close on 29 August.
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.”