2nd Nov 2018 08:30
LONDON (Alliance News) - TP ICAP PLC said Friday its revenue growth in the four months to the end of October reflected "mixed market conditions", as the intermediary broker acquired American energy & commodities brokerage firm Axiom Commodity Group LLC for USD15 million.
TP ICAP's revenue in the period was up 1.1% to GBP568 million from GBP562 million in the same period a year prior.
For the year-to-date - January to October - the FTSE 250-listed interdealer broker's revenue was marginally lower at GBP1.48 billion.
In the four month period to October, TP ICAP said its revenue growth reflects "mixed market conditions".
"Today's trading update demonstrates that TP ICAP is well placed to grow in mixed market conditions, characterised by periodic volatility that we saw in October following the US Federal Reserve's rates decision," said Nicolas Breteau, chief executive officer.
The company's Global Broking revenue in the period was in line with the comparative period a year prior but the division's Rates and Equities performed well on a constant currency basis.
The company's Data & Analytics division saw "strong" revenue growth of 11%, benefiting from "strategic changes" implemented by new management.
Breteau continued: "This underlines our firmly-held belief that investing in growth areas such as Data & Analytics will benefit TP ICAP over the longer-term as we develop solid and scalable revenues across our global businesses."
The Institutional Services division experienced 12% revenue growth in the period, with financial services firm COEX Partners seeing significant growth.
The Energy & Commodities division's revenue was in line with the previous year, with TP ICAP lamenting the "challenging" markets across the division's products.
Separately, TP ICAP said it has acquired Axiom Refined Products LLC, Atlas Commodity Markets LLC, Atlas Petroleum Markets LLC, and Atlas Physical Grains LLC - collectively known as Axiom.
The initial consideration for the acquisition is USD15.1 million in cash. A deferred non-contingent consideration of USD3.1 million will be paid over three years with a further USD10.9 million of deferred contingent consideration may be payable dependent upon the performance of the business.
For 2017, Axoim recorded pretax profit of USD5.3 million. At the end of 2017, it had gross assets of USD7.4 million.
In the same period, TP ICAP's Energy & Commodities division - of which Axiom will become part - recorded revenue of GBP343 million.
Axiom is headquartered in Houston, Texas with 22 brokers who specialise in crude oil, refined oil products, ethanol and physical grains.
TP ICAP said the acquisition will "reinforce" the company's presence in Houston.
Looking ahead, the company said it expects the outcome for its full-year ending December to be in line with guidance.
For 2017, TP ICAP reported pretax profit of GBP233 million on revenue of GBP1.76 billion.
The company will report its preliminary results for 2018 on March 19 next year.
Shares in TP ICAP were up 0.9% Friday morning at 291.00 pence each.
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