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CMC Markets has announced it will cut almost a fifth of its workforce as part of a cost savings plan, sending its shares up more than 13 per cent in morning trading on Monday.
The spread betting platform founded by Conservative party donor Peter Cruddas said on Monday that its global headcount would be reduced by about 200 positions — equivalent to approximately 17 per cent of its existing staff.
The company, which has more than 250,000 clients worldwide, expects the job cuts to cost about £2.5mn this year, but said it would achieve estimated annualised savings of £21mn in its 2025 financial year.
It said the cuts would be achieved primarily by “merging support functions across multiple business lines, streamlining reporting lines and automating processes”.
CMC’s share price remains down about three-quarters since its all-time high in April 2021 when traders, many of them stuck at home, seized on increased market volatility triggered by the Covid-19 pandemic.
CMC announced the cost review last year, when it reported a loss before tax of £2mn for the six months to the end of September, compared with a £36.6mn profit before tax the previous year.
CMC said on Monday it still expected to meet an upgraded forecast for net annual operating income of between £290mn and £310mn. The company raised its outlook in January on the back of an increase in volatility that spurred traders to return to equities and indices as well as gold.
In its 2023 annual report, the company reported pre-tax profits of £52mn, down from £92mn in 2022 and £223mn in 2021.
CMC offers spread betting services for traders to make leveraged bets on financial markets including equities and commodities. It is also growing its non-leveraged investment and stockbroking services.
Analysts at Peel Hunt said the update suggested a “significant increase to profitability”.
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