6th Aug 2019 09:20
(Alliance News) - TP ICAP PLC on Tuesday reported profit and revenue growth despite its Global Broking business suffering a slip in revenue on weak demand from investment bank clients.
TP ICAP said its integration of Tullett Prebon and ICAP is expected to be completed by the end of 2019, and expects to achieve cost synergies of GBP75 million.
In the six months to June 30, the interdealer broker saw pretax profit more than double to GBP83 million from GBP34 million the year before. Excluding acquisition, disposal and integration costs, TP ICAP's operating profit edged 1.9% higher to GBP158 million.
Revenue was up 1.3% to GBP922 million from GBP910 million the year before.
"We have delivered a resilient performance and maintained our operating margins despite a decline in trading amongst the investment banks, and additional costs driven by increasing regulation and Brexit. At the same time we have stepped up investment in a range of new initiatives to improve client service and to promote greater hybrid and electronic trading," said Chief Executive Nicolas Breteau.
TP ICAP's Global Broking revenue slipped 6%, with revenue generated from the company's largest investment banking customers declining by double digits. The company said the market conditions were "challenging" for the unit.
TP ICAP's Energy & Commodities revenue was up 8% year-on-year on acquisitions and "more favourable" market conditions in power and gas.
The company's Institutional Services revenue saw a sharp jump of 28% on "structural market changes" and new hires within the unit.
TP ICAP's Data & Analytics saw 12% growth on new product launches attracting new clients.
Breteau added: "During my first year as CEO, I have focused the business in those areas where we provide the greatest value to our clients and have the greatest competitive advantage. We have also made considerable organisational changes, made good progress on integration, are implementing an improved risk management framework and simplifying our legal entity structure.
"We have made considerable progress on our strategic planning for growth from 2020 onwards in. Our budgeting and plans for this are underway and we will update the market in the New Year."
TP ICAP said it is "confident" in its new strategy despite the "challenges" presented by the current political and economic environment.
The company said it is preparing for Brexit and stressed 90% of it broking revenue will be "largely unaffected". In an effort to combat the UK leaving the EU without a trade agreement, TP ICAP has opened an office in Paris to service its EU clients.
The company is also in the process of moving its multilateral trading facility to Amsterdam.
"I am pleased with the progress we have made in the first six months of 2019. While there is still more to do to complete the transformation of TP ICAP, I am heartened by what we have achieved and am confident we are on track," added Breteau.
TP ICAP left its interim dividend unchanged at 5.6 pence per share.
Shares in TP ICAP were down 1.2% in London on Tuesday morning at 278.90 pence each.
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