6th May 2015 06:44
LONDON (Alliance News) - Tullett Prebon PLC Wednesday said the performance of PVM Oil Associated Ltd has been ahead of its expectations since completing the acquisition of the oil futures broker in November.
In a statement, the interdealer broker said its total revenue for the first four months of 2015 increased to GBP284 million from GBP248 million in the corresponding period of the prior year, with the increase being a result of acquiring PVM. Excluding PVM, revenue was "unchanged" and 2% lower at constant exchange rates, according to Tullett.
Tullett said that PVM is continuing to benefit from higher activity levels in oil markets due to "significant changes" in the price of oil since the start of the second half of 2014.
"Action was taken during 2014 to reduce headcount and other fixed costs in order to preserve the variable nature of broker compensation and to reduce it as a percentage of broking revenue, and to generally reduce fixed costs throughout the business to better align the cost base with the lower level of revenue. The benefits of this action have been reflected in an improvement in the business's contribution margin in the first part of 2015 compared with the same period a year ago," Tullett said in a statement.
"We are continuing to invest in the development of the business, and in the implementation of our cultural framework to deliver on our commitment to instil the highest standards of conduct in the business by embedding our values, principles and behaviours in all our systems and processes," Tullett said.
Overall, Tullett said that the wholesale over-the-counter financial markets have been "subdued" but more stable.
"There has been higher volatility in some financial markets in 2015 compared with a year ago, particularly currencies, but volatility in most product areas has continued to be sporadic," Tullett said.
"The level of activity in Asia Pacific and in some product areas in the Americas has picked up compared with a year ago. The level of activity in Europe and the Middle East has reflected the effect of further flattening and lowering of yield curves which continues to dampen trading activity in the region," Tullett said.
By Samuel Agini; [email protected]; @samuelagini
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