A sharp rise in the number of people seizing upon market turmoil as an opportunity to place bets has more than doubled London Capital Group’s annual profit.

Account openings at the spread betting group also more than doubled in the year to December 31 to 19,125, and helped drive revenue to nearly £19m (£8.65m). Pretax profit increased from £3.37m to £8.57m.

Peter Read, analyst at Cenkos, the company broker, said: “The high level of market volatility continues to be good news for the group. The more volatile the market is, the more people will be attracted to spread betting.”

Frank Chapman, chief executive, said the strong growth in its client base suggest that spread betting – in which punters bet on how far stocks, indexes, commodities or exchange rates will deviate from a specified range – is becoming increasingly popular with small retail investors.

Like its peers, London Capital is planning to press ahead with plans to recruit more customers from abroad following the relaxation of financial markets under the European Union’s Markets in Financial Instruments Directive.

Mifid has lifted marketing restrictions on some types of gambling, giving spread betting companies such as London Capital access to millions of new customers.

“The potential is huge,” said Mr Chapman.

Earnings per share were 15.69p (6.3p) and a final dividend of 5.25p gives a total pay-out for the year of 6.5p (1.7p).

Shares in London Capital, which more than doubled last year, fell 6p to 363p.

FT Comment

* Spread betting companies have emerged as one of the few winning sectors from this summer’s credit turmoil. Although the entire sector has benefited, London Capital continues to outperform expectations. The group has seen the amount of its clients’ cash on deposit increase, suggesting that customers tend to continue betting even when they lose. The tightness of its spreads and its risk controls, such as auto stop trade, are two reasons investors continue to flock to the group. Trading at 15.6 times 2008 earnings, London Capital’s valuation is in line with its peers. However, given the strong momentum behind the rate at which it is increasing its client base, there could be room for upside.