6th Nov 2015 07:53
LONDON (Alliance News) - Tullett Prebon PLC on Friday said it will take a charge in its 2015 accounts to cut front-office interdealer brokers by 5% in the "traditional" product areas, with the cost-saving initiative following a further reduction in market volumes since the end of June.
Tullett said the reduction in market volumes, which was particularly pronounced in Europe, has forced it into action to cut staff numbers and fixed costs.
The FTSE 250 company said that a further decline in revenue in the second half of 2015 has put further pressure on operating margins.
Revenue in the four months from July to October amounted to GBP255.0 million, up 9% on the same period the prior year. When excluding PVM Oil Associates Ltd, the oil broker it acquired for USD112.0 million in shares in November 2014, revenue in that period was 5% lower at constant exchange rates than in the same months the prior year.
Tullett now expects the underlying operating profit margin for 2015 to be about 1.5 percentage points lower than in the prior year.
Tullett said its decision to enter the energy and commodities markets, in a move to diversify from the traditional product areas targeted by interdealer brokers, remains a positive step for the company.
PVM has had a "strong" performance, Tullett said. The oil broker has been boosted by plunging oil prices since the second half of 2014, helped by the level of activity in the oil and related products markets.
By Samuel Agini; [email protected]; @samuelagini
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