15th Jul 2015 06:34
LONDON (Alliance News) - ICAP PLC Wednesday said it is well positioned to benefit from increased trading activity when macroeconomic conditions allow, as the company reported that revenue increased in the opening quarter of its new financial year, when excluding businesses it has closed under a restructuring programme.
Revenue, excluding the discontinued businesses, was up 2% in the quarter ended June 30, when compared with the corresponding quarter of the prior year. It was down 1% at constant currency.
Growth in the interdealer broker's electronic markets operations, where first quarter revenue grew by 14% on a reported basis, and stability in its post trade risk and information division more than offset a 1% fall in global broking revenue.
ICAP said that overall market conditions have been mixed, with foreign exchange volumes showing a "significant" year-on-year recovery. However, the company said that uncertainties about the future of the eurozone as a result of the Greek crisis have tended to cut risk appetite and trading volumes. In addition, ICAP said there is "still no clear picture" about the "future direction and timing of any interest rate moves" as set by central banks.
Chief Executive Michael Spencer said he is confident that ICAP can benefit from increased trading activity as macroeconomic conditions change.
"Against a backdrop of mixed market conditions we have started the year a leaner business, set for long-term growth and increased profitability. We've continued to focus on expanding our addressable market by developing new products and services which will cater for a wider customer base," Spencer said.
ICAP, which matches buyers and sellers in the wholesale markets for interest rates, credit, commodities, foreign exchange, emerging markets and equity derivatives, has been focusing on its electronic markets and post trade and risk information operations as it cuts its reliance on voice broking operations, once the earnings driver of the business.
"Our post trade businesses are supported by accelerating demand for risk reduction services," Spencer said.
Speaking after ICAP made a further investment in AcadiaSoft Inc, which provides electronic margining for over-the-counter derivatives, Spencer said the move shows the company's willingness to invest in "high growth technology firms" with potential to create value in financial markets.
"We will combine TriOptima's expertise through its triResolve portfolio matching service with AcadiaSoft's margin messaging platform, which will facilitate regulatory compliance and a reduction in operational costs and risks for industry participants," Spencer said.
By Samuel Agini; [email protected]; @samuelagini
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