Full Year Results 2015

Press Release

Full-year results for the year ended 31 March 2015

Encouraging end to a challenging year

London - 19 May 2015 - ICAP plc (IAP.L), a leading markets operator and provider of post trade risk and information services, announces today its audited results for the year ended 31 March 2015.

2013/14 results were restated to reflect the adoption of new accounting standards on joint ventures. See the basis of preparation statement.

Trading results are stated before acquisition and disposal costs and exceptional items.

Highlights:

· Double digit Post Trade Risk and Information revenue growth, on a constant currency basis, driven by TriOptima and Traiana

· Significant new business momentum at EBS

· Group full year trading PBT down 15% to £229 million; second half PBT up 8% on the prior year second half to £143 million

· Global Broking restructuring substantially completed; Group annualised cost saving target exceeded £70 million achieved with £41 million realised in the year

· Targeted investment in growth areas - £43 million investment in new initiatives (2013/14 - £42 million)

· Strong cash conversion - 106% (2013/14 - 75%)

· Proposed final dividend maintained at 15.4p; full year dividend 22.0p

Michael Spencer, Group Chief Executive Officer, said: "The past year has been one marked by both challenges and opportunities across many of our businesses. Our bank customers have re-prioritised their sales and trading franchises and continued to reduce balance sheet risk. Our regulators continued their important work for market efficiency, embracing greater transparency and tighter, more risk averse financial systems.

"Against this backdrop of a transformed market environment, we have re-balanced our portfolio of assets with our Electronic Markets and Post Trade Risk and Information divisions now contributing three quarters of the Group's profitability. We have materially re-engineered ICAP, with a significant reshaping of our Global Broking division and the merging of EBS and BrokerTec. We have had some excellent successes with EBS Direct, the new emerging currencies on EBS, and in our Post Trade Risk and Information division with risk reduction services from TriOptima. These factors, combined with our ongoing investment in technology-based innovative solutions, have set us on the path to growth.

"As a result of the changes we've made, ICAP is better placed to capitalise on the opportunities available and better able to serve a broader range of customers. ICAP is profitable and cash generative. We will continue to invest in people, training, technology and systems to ensure we have the right skills, remain innovative and agile, and grow our business."

There will be a briefing for analysts and investors at 09:30am (BST) on Tuesday 19 May 2015 at2 Broadgate, London EC2M 7UR.

Contacts:

Notes to the editor

About ICAP

ICAP is a leading markets operator and provider of post trade risk mitigation and information services. Group companies provide services that match buyers and sellers in the wholesale markets in interest rates, credit, commodities, FX and money markets, emerging markets and equity derivatives through voice and electronic networks. Our post trade risk and information services help our customers manage and mitigate risks in their portfolios.

For more information go to www.icap.com.

Financial performance

For the year ended 31 March 2015, the Group reported revenue of £1,276 million, 7% below the prior year. On a constant currency basis, revenue from Post Trade Risk and Information was up 10% which was offset by decreases of 1% in Electronic Markets and 11% in Global Broking.

During the course of the year, the Group's trading performance was impacted by a combination of structural and cyclical factors. Bank deleveraging, in response to stricter regulatory capital requirements, negatively impacted the trading activity of ICAP's customers, particularly in the Global Broking division. This was partly offset in the second half of the year by the European quantitative easing announcements and the speculation on the timing of a US interest rate rise which resulted in increased volatility. Some of the revenue loss within Global Broking was as a result of closed businesses as the Group successfully completed its restructuring programme.

In response to the challenging trading conditions experienced towards the end of 2013/14 and into the first half of 2014/15, the Group embarked on a comprehensive review and restructuring of the Global Broking division. As a result of this action, coupled with improved market volumes and new product initiatives, in the second half of 2014/15 the Group delivered a trading profit before tax of £143 million, an increase of 8% on the prior year.

The 10% increase in Post Trade Risk and Information revenue was driven through increased participation in triReduce portfolio compression cycles and the uptake of the portfolio reconciliation service, triResolve. Subscription based revenue increased in products such as CreditLink and cross-asset regulatory reporting in Traiana. Electronic Markets' revenue decreased 1% on a constant currency basis, with EBS revenue increasing by 2%, offset by a 2% revenue decrease in BrokerTec.

Group net trading operating expenses of £1,024 million were 6% lower than the previous year, mostly driven by an 11% decrease in Global Broking as the cost saving programme initiated over the past three financial years has taken £175 million of cumulative annualised costs out of the business. £41 million of net cost savings were achieved from the successful completion of the Group's 2014/15 restructuring programme. A further £12 million of incremental net annualised savings attributable to the prior year cost reduction initiatives was also achieved. Additionally, the flexibility of the cost base continued to be enhanced through the restructuring of broker compensation as contracts became due for renewal. The total broker and support headcount in Global Broking reduced by 740 in the year to 2,336 employees, and the broker compensation ratio was reduced by four percentage points to 53%.

Consistent with the Group's growth strategy, ICAP continues to make significant investment in the Electronic Markets and Post Trade Risk and Information divisions. During the year the Group invested £43 million in new business lines including EBS Direct, the ICAP SEF, triCalculate and Traiana Limithub, an increase of £1 million compared with the same period last year. The total headcount of Electronic Markets and Post Trade Risk and Information businesses expanded by 119 during the year to 1,226 employees.

The Group reported a trading operating profit of £252 million, 13% down on the prior year. The Group's trading operating profit margin reduced to 20% (2013/14 - 21%). The proportion of the Group's trading operating profit generated from the Electronic Markets and Post Trade Risk and Information divisions increased to 75%, reflecting a seven percentage point increase on the prior year.

Group trading profit before tax of £229 million and trading EPS (basic) of 28.7p were 15% and 14% down on the prior year respectively. Profit before tax was £95 million (2013/14 - £121 million), reflecting a £15 million decrease in acquisition and disposal costs partially offsetting the £42 million decrease in trading profit before tax. Basic EPS declined 17% to 13.0p.

Expanding our addressable market

An important development this year has been the combination of the BrokerTec and EBS businesses. Our aim is to build a truly world leading electronic OTC transaction platform with a multi-product offering. Our BrokerTec and EBS businesses are both flagship electronic platforms that provide trading solutions across FX and fixed income products. Bringing BrokerTec and EBS together will allow us to scale our technology assets and leverage our sales capability. This will deliver new products and we will reach new client segments. We demonstrated that we are able to deliver successful new trading solutions with the launch of EBS Direct in November 2013, which has experienced exceptional volume growth. We plan to continue to expand our addressable market with the launch of innovative products into other asset classes.

Seize the strategic and business opportunities created by regulatory change

The Post Trade Risk and Information division benefited from increased demand for its variety of pre trade, post trade and information products and services. The performance of TriOptima was particularly notable, reflecting its position as a provider of product and technological solutions that address customer needs in the new regulatory environment. Our triReduce service reduces risk and provides OTC derivatives trade compression. It has capitalised on and benefited significantly from the requirements of new capital rules and leverage ratios. The introduction of new regulatory requirements such as portfolio reconciliation, cross asset reporting and certainty of clearing has increased demand for TriOptima's triResolve and Traiana's products including CCP Connect and CreditLInk.

Reshaping Global Broking

Coming into 2014/15 the Global Broking division was experiencing an extremely challenging trading environment. Volumes in the first half continued to decline amid bank deleveraging, low volatility and new regulatory requirements that make it more onerous for our core bank clients to trade at the levels we had seen historically. We took some difficult but necessary decisions to take into account this new reality, proceeding on the basis that some of these changes are permanent.

We therefore implemented a restructuring programme. We reviewed all of the geographies and asset classes in which we operate and exited those that are not core to our strategy. This delivered net annualised savings of £70 million in 2014/15, exceeding the target of £60 million. The savings were derived from headcount reduction in the broking population and related infrastructure roles and the reduction of broker compensation as a percentage of revenue. These savings are in addition to the £125 million of annualised cost savings delivered in the three years to 2013/14. The benefit of these savings is a Global Broking business with stronger profitability which has adapted successfully to the market environment and is fit for purpose for the future. While the restructuring is essentially complete, we continue to focus on the cost base of Global Broking.

Global Broking is now well positioned to look to the future to invest in technology and in its electronic capability in areas such as Fusion and its SEF. We will push forward with the development of hybrid and electronic trading offerings such as i-Swap and other matching platforms. Another area of focus will be those businesses where we have market leading franchises and which have benefited from rising volatility, such as in OTC European Interest Rate Derivatives. This is how we will continue to differentiate ourselves from our traditional broking competitors.

Looking forward

We aim to be at the forefront of product and technological innovation. We remain focused on driving the future growth of the business through the development of new products and services and expansion into new markets. We continue to invest in all aspects of our business especially the ongoing development of electronic trading platforms and post trade services.

We can use our scale and breadth to master the complexity of the new landscape. We are investing in people, training, technology and systems to ensure we have the right skills, maintain our innovative market edge, share expertise and best practice around the world and grow our business.

Dividend

The directors recommend a final dividend of 15.4p per share which will result in a full-year dividend of 22.0p (2013/14 - 22.0p). This reflects the Group's strong cash generation and the board's confidence in the medium term prospects for the business. If approved, the final dividend will be paid on 24 July 2015 to the shareholders on the register at the close of business on 3 July 2015. The shares will be quoted ex-dividend from 2 July 2015.

Outlook

Since the start of the financial year the external environment has been mixed and we continue to expect near term headwinds as the pick up in market activity remain episodic. The restructuring programme has delivered on its target, the benefits of which will contribute to funding our continued investments in new initiatives.

Ultimately, we are and will continue to build a stronger, leaner, organisation, thereby enhancing our profitability and providing a solid base for future business growth with all the benefits which that entails for us, our employees and customers alike.

Review of operations

Electronic Markets

ICAP operates BrokerTec and EBS, which are electronic trading platforms in fixed income and FX. These platforms offer efficient and effective trading solutions to customers in more than 50 countries across a range of instruments including spot FX, US Treasuries, European government bonds and EU and US repo. These electronic platforms are built on ICAP's bespoke networks connecting participants in financial markets.

In December 2014, ICAP announced plans to combine its electronic businesses to create EBS-BrokerTec. The combined business allows ICAP to leverage BrokerTec's market leading platform, client relationships and strong team, as well as EBS's technology and innovation pipeline, to deliver unique products and services to the industry and expand the addressable market of both platforms.

For the year ended 31 March 2015, Electronic Markets' revenue decreased by 2% to £259 million (2013/14 - £265 million). The overall trading operating profit margin declined by four percentage points to 36% mainly as a result of increased investment in EBS Direct.

BrokerTec

BrokerTec is the global electronic platform for the trading of US Treasuries, European government bonds and EU and US repo. BrokerTec facilitates trading for institutions, banks and non-bank professional trading firms.

For the year ended 31 March 2015, revenue decreased by 4% to £128 million (2013/14 - £133 million) reflecting a 3% increase in US Treasury average daily volumes to $163 billion, a 1% increase in US repo to $220 billion and a 7% decrease in European repo to $233 billion.

During the year, BrokerTec marginally improved its leading market share in the interdealer US Treasury on-the-run market, reflecting the continued technology and infrastructure improvements to the platform. Volumes on BrokerTec benefited from the Federal Reserve's tapering programme and the end of quantitative easing in the US. Geopolitical events and economic unrest during the course of the year also drove investors to buy US Treasuries in a 'flight to quality' trade and to take advantage of the widespread between EU and US yields.

The repo market is pivotal to the effective functioning of almost all financial markets, and provides an efficient source of collateralised money market funding. During the year, the main headwind of both the US and European repo markets was regulatory change, as firms deal with the new capital and liquidity requirements that emerged from Basel III.

European government bond volumes on BrokerTec improved as a number of new market-making initiatives resulted in higher volumes. Increased client footprint, most notably in Italy, with more domestic regional banks using BrokerTec, complemented ongoing efforts to improve market share in the Italian sovereign bond market.

EBS

EBS, ICAP's electronic FX business, is a reliable and trusted source of orderly, executable and genuine liquidity across major and emerging market currencies. It has responded to changing market dynamics by transitioning from a business with a single offering to one that can support multiple execution methods and multiple ways of trading through a common distribution network.

Overall activity levels in the major currency pairs during the first five months of the year remained subdued, as FX volatility remained at historically low levels. A number of central bank interventions, for example by the ECB in September, the Bank of Japan in October and the Swiss National Bank in January, drove an increase in FX volatility resulting in an increase in volume on EBS. In addition, quantitative easing in Europe was a major driver of activity levels in euro/dollar. As a result, average daily volume on EBS was 42% higher in the second half compared to the first half of the year. Average daily volume for the year was 6% higher than in 2013/14. Revenue for the year ended 31 March 2015 increased 1% to £124 million (2013/14 - £122 million).

EBS Market, the exchange-like flagship platform, is a central limit order book that allows customers to match interest anonymously with other participants in the market. It has maintained its position as a primary interbank venue for the trading of the world's most actively traded currency pairs, including euro/dollar and dollar/yen. The unpegging of the Swiss franc in January resulted in significantly increased trading volumes in euro/Swiss franc and dollar/Swiss franc, demonstrating the pivotal position EBS has in the FX markets during times of high volatility.

Consistent with the strategy to expand into growth markets, volume traded in emerging market currency pairs saw a significant growth of 101% on 2013/14. The dollar/offshore Chinese renminbi remains one of the most actively traded currency pairs on EBS Market and volumes have grown by more than 400% during 2014/15. NDFs also experienced both positive growth and broader customer interest, with a 102% increase in volume on the previous year.

EBS Direct, which launched in November 2013, is a fully disclosed and relationship-based platform that allows liquidity providers to stream tailored prices directly to liquidity consumers. It has continued to grow steadily following a hiatus to allow for a technology upgrade at the end of 2014. Average daily volume increased from $5 billion in April 2014 to $17 billion in March 2015. The platform now has 20 liquidity providers and over 350 liquidity consumers using the service. Interest in EBS Direct continues to grow, with an additional 200 new customers in the pipeline, in addition to 20 new liquidity providers.

EBS Direct is expected to remain in an investment phase in 2015/16 as new functionality, services and products are added to the platform, including the launch of FX swaps and outright forwards, and the integration of MyTreasury, a service for corporate customers. During the year £23 million has been invested in EBS Direct, of which £7 million has been capitalised.

In March 2015, a new global liquidity platform, EBS Select, went live with a beta launch to complement the existing multi-product offerings. EBS Select will provide customers with the option of trading in a non-disclosed environment using a multi-prime broker model. 30 liquidity consumers and six liquidity providers are participating in the beta roll-out.

EBS Hedge, a new innovative product, was designed for systematically driven risk management, allowing e-FX trading desks to match with other e-FX desks when interests cross. Having launched the beta phase in December 2014, it has experienced exceptional support from the EBS community, with seven customers currently live and another six customers connecting to the test lab environment and a further 20 customers having expressed a strong interest to participate in the product in the coming year.

i-Swap

i-Swap, ICAP's global electronic trading platform for IRS, has continued to build on its market position and has brought increased transparency, greater efficiency and lower transaction costs to the world's largest OTC derivative market. i-Swap is central to ICAP's SEF strategy and is the trading platform utilised for required and permitted interest rate derivative transactions. Electronic momentum in dollar interest rate swaps is building on the i-Swap platform as banks transition liquidity from voice to electronic venues to take advantage of lower execution costs, enhanced trade opportunities and post trade efficiencies.

In Europe, while there is consistent liquidity on the platform at the two, five and ten-year points, activity levels are conditional on the levels of market volatility. Targeted streaming has been introduced recently with five liquidity providers actively providing tiered pricing to a subset of platform users. As the MiFID II requirements unfold over the coming months, this is likely to be a further catalyst to increase the transition to electronic trading.

Post Trade Risk and Information

The Post Trade Risk and Information division operates market infrastructure for post trade processing and risk management across asset classes and enables users of financial products to reduce operational, second order financial and system-wide risks. The services offered by Post Trade Risk and Information enable customers to increase the efficiency of trading, clearing and settlement and facilitate the effective management of capital and risk weighted assets and associated cost.

The portfolio risk services businesses comprise: TriOptima and Reset, which identify, neutralise, remove and reconcile risk within portfolios of derivative transactions; Traiana, which provides pre trade risk and post trade processing solutions; and the information and data sales business.

During the year, Post Trade Risk and Information invested more than £18 million in development in order to offer new products and enhance the functionality of existing services.

For the year ended 31 March 2015, revenue increased by 10% on a constant currency basis and by 8% on a reported basis to £228 million (2013/14 - £212 million) reflecting strong revenue growth in both TriOptima and Traiana. Trading operating profit increased by 1% reflecting an increase in investment in new products and a reduction in revenue from higher margin products.

TriOptima

TriOptima, through triReduce and triResolve, is a leader in risk mitigation solutions for OTC derivatives, primarily through the elimination and reconciliation of outstanding transactions. It continues to benefit from the strategic alignment of its offerings with the G20 policy objectives of transparency and risk reduction in the financial system.

For the year ended 31 March 2015, revenue increased by 34% on a constant currency basis and by 24% on a reported basis to £67 million (2013/14 - £54 million) driven by increased participation in triReduce portfolio compression cycles and the uptake of the portfolio reconciliation service, triResolve.

During the year triReduce terminated $150 trillion of gross notional outstanding (2013/14 - $112 trillion). The more stringent leverage ratio included within the Basel III rules continues to drive demand from banks for the triReduce compression service. Since its launch in 2003, triReduce has eliminated more than $609 trillion in total notional volume from the OTC derivatives market for more than 251 legal entities, including both bank and non-bank institutions. triReduce is working with multiple clearing houses to facilitate portfolio compression for cleared trades. In December, triReduce announced that it had completed the first compression cycle for Japanese yen interest rates swaps at the Japanese Securities Clearing Corporation and, in March, announced that it had entered into an agreement with the CME to offer multilateral compression services.

triReduce continues to offer new services, including cross currency swaps, in which it has already successfully run compression cycles in currencies such as the Mexican peso, the South African rand and the Turkish lira. triReduce recently announced plans to collaborate with CLS to deliver an FX forward compression service.

Strong demand for triResolve continues to be driven by the introduction of regulatory requirements for regular reconciliation of derivative portfolios. The number of customers using the triResolve service has increased from 987 during 2013/14 to more than 1,380 who participate in 330,000 party-to-party reconciliations each month (2013/14 - 283,000). triResolve recently announced its first customer in Taiwan as market participants in the Asia Pacific region have begun to reconcile regularly to accommodate their US and European counterparties. A further offering born out of the new rules is repository reconciliation where triResolve supports interfaces to both European and US trade repositories.

triCalculate, the counterparty credit risk analytics service based on an innovative new methodology, is now in its pilot phase and is expected to go into commercial launch in 2015/16. New regulatory requirements under the Basel III framework will introduce the need for further new products.

Traiana

Traiana operates the leading market infrastructure for pre and post trade risk management and post trade processing across multiple asset classes. Its robust and proven product suite automates trade processing across the life cycle for FX, cash equities, equity swaps, futures, OTC derivatives and fixed income. Traiana's Harmony network connects more than 750 global banks, broker/dealers, buy side firms and trading platforms.

For the year ended 31 March 2015, revenue increased by 10% on a constant currency basis and by 11% on a reported basis to £53 million (2013/14 - £47 million). The increase is primarily attributable to subscription based revenue in products such as CreditLink, the real-time platform for pre and post trade certainty of clearing and cross-asset regulatory reporting, specifically CCP Connect and Trade Reporting. The Harmony platform saw a decline in the number of FX transactions processed as a result of low FX volatility during the first half of the year.

While FX remains its largest revenue segment, Traiana continues to innovate, grow and diversify its business into other asset classes, delivering network based solutions for all financial market participants, while also continuing to innovate in FX. There has been a focus on investment in real-time credit management and allocation systems and the expansion of regulatory reporting into multiple jurisdictions. Regulatory approval was recently received from three separate regulatory bodies and three pan-European clearing houses for the launch of Equity CCP Connect, a clearing service which provides banks with immediate expense and risk reduction through the netting and clearing of OTC equity transactions.

Reset

Reset is a provider of services that reduce the basis risk within portfolios from fixings in the interest rate, FX and inflation derivatives and bonds markets. Basis risk results from the structure of the instruments traded and unintended mismatches of exposure over time.

Reset's revenue is largely correlated to the movement in both actual and forecast short-term interest rates. For the year ended 31 March 2015, revenue decreased by 2% on a constant currency basis and by 5% on a reported basis to £39 million (2014/15 - £41 million). Minimal interest rate volatility and flat short-term yield curves continued to constrain activity levels. Reset remains well positioned to benefit from a return to normalised levels of interest rate volatility.

ICAP Information Services

IIS delivers independent data solutions to financial market participants, generating subscription-based fees from a suite of products and services. ICAP Indices charges licence fees based on financial instruments linked to proprietary indices as well as licensing other index administrators for the use of ICAP data in their indices.

For the year ended 31 March 2015, revenue increased by 1% on a constant currency basis and marginally decreased on a reported basis to £69 million (2013/14 - £70 million). The IIS product offering and development strategy have expanded to meet the evolution in market demand. IIS has continued to broaden its distribution options based on customer demand.

IIS has expanded its offering within its interest rate derivatives suite, most recently with the launch of real-time, end of day and historical tick data services. IIS continues to leverage its collaborative relationships with third party data, analytics and technology providers to improve its offerings, expand its customer base and enter new markets. For example, its partnership with industry specialists Prism Valuations widens the addressable market for IIS's services.

Other Post Trade Risk and Information investments

ICAP's Post Trade Risk and Information division invests in new companies developing innovative technology-led offerings via Euclid Opportunities. Euclid identifies and provides investment to emerging financial technology firms providing new platforms, business models and technologies that have the potential to drive efficiency, transparency and scale across the post transaction lifecycle. Example investments are: Duco, a rapidly growing reconciliation on-demand provider; OpenGamma, an award winning risk analytics provider; and Enso Financial, a portfolio analytics provider to asset managers and hedge funds. Further investments are anticipated in the forthcoming financial year.

Global Broking

Global Broking provides services to wholesale markets across a wide range of geographies and asset classes. ICAP's 1,571 brokers, leveraging their deep customer relationships, help identify potential trading interest, access liquidity and facilitate price discovery in a vast array of financial instruments.

Global Broking's revenue by asset class for the year ended 31 March 2015 is set out below:

During the course of the year, the trading performance of Global Broking was impacted by a combination of structural and cyclical factors. Bank deleveraging, in response to stricter regulatory capital requirements, constrained the trading activity of ICAP's customers. This was partly offset in the second half of the year by the European quantitative easing announcements, speculation on the timing of a US interest rate rise, the dramatic fall in oil prices and the ripple effect of various European general elections which had increased volatility.

Against this market backdrop ICAP undertook a fundamental review of the business, evaluating the current contributions and future prospects by desk and location. As a result broker headcount reduced by approximately 500 brokers to 1,571. In addition, broker compensation continues to be adjusted in order to enhance the variable nature of broker costs. This resulted in annualised cost savings of £70 million net of revenue loss. The focus in 2015/16 will be around the development of our people, complemented by the integrated smart use of technology, a key tool to growing our market share.

For the year ended 31 March 2015, revenue decreased by 11% on a constant currency basis and by 12% on a reported basis to £789 million (2013/14 - £901 million). This reflects a year-on-year decline of 15% in the first half of the year followed by a 6% decline in the second half of the year. Trading operating profit reduced by 29% to £62 million resulting in a modest reduction in the overall operating profit margin to 8%. The trading operating profit margin improved to 12% in the second half of the year compared to 4% in the first half. The decline in revenue was partially offset by cost savings arising from the ongoing cost reduction programme outlined above.

Rates

The rates business comprises interest rate derivatives, government bonds, repos and financial futures. Rate products contribute the largest share of Global Broking's revenue (34%) of which interest rate derivatives represent the most significant component. For the year ended 31 March 2015 revenue decreased by 15% on a reported basis.

The enduring low interest rate environment and bank customers' reduced risk appetite remains a headwind for trading activity in addition to ongoing pressure on brokerage. In the second half of the year, however, the macroeconomic environment in Europe benefited from the introduction of quantitative easing resulting in lower euro rates. This development spurred an unprecedented level of bond issuance and related hedging activity in the swaps markets.

The trend to execute on electronic platforms impacted some of the desks as activity in the off-the-run US treasuries migrated to BrokerTec and US swaps to i-Swap. The hybrid matching platform has continued its success and is fully supported by the brokers, ensuring that ICAP maintains its top position in the volume matching market. During the course of the year a review of the existing global financial futures business was concluded, and this business now operates on a streamlined, execution only, regional model which is better suited to serve ICAP's customers' requirements.

Commodities

The commodities business comprises energy (including electricity, crude oil, refined products, natural gas, coal, and alternative fuels), environmental markets, shipping, metals, agriculture and soft commodities.

For the year ended 31 March 2015, revenue decreased by 12% on a reported basis, with the largest decreases coming from US natural gas and electricity. Range bound natural gas prices continued to drift lower as supply continued to outstrip demand, which meant less volatile electricity prices, both of which provided fewer trading opportunities. A volatile oil price, however, resulted in a positive performance despite the strengthening US dollar creating currency headwinds for commodity prices. As part of the Group restructuring process, ICAP withdrew from the LME metals business, streamlined the carbon business and scaled back the alternative fuels desk.

The shipping business produced revenue in line with the previous year as improvements in tanker markets offset the adverse impact of low dry rates. After the year end, ICAP's shipping business and Howe Robinson Group Pte Ltd (Howe Robinson), the ship-broking group, formed a new venture, Howe Robinson Partners which has commenced trading. ICAP has taken a 35% shareholding in the new venture.

Emerging markets

ICAP is active in emerging markets across Asia Pacific, Latin America, Central and Eastern Europe and Africa. Emerging market revenue includes domestic activity in local markets and cross border activity in globally traded emerging market money and interest rate products.

For the year ended 31 March 2015, revenue decreased by 12% on a reported basis. The majority of the reduction came in the first half with the second half revenue 2% above that recorded in the second half of 2013/14. The return of volatility relating to geopolitical factors, a falling oil price as well as some specific local factors helped to improve performance in the second half of the year, especially on the Asian desks. NDF volumes have grown on the back of the implementation of matching sessions as well as market driven increases. Liberalisation of the renminbi as a settlement currency continues to drive growth in related products.

Equities

The equities business principally comprises equity derivatives. For the year ended 31 March 2015, revenue decreased by 8% as a number of bank customers downsized their desks, restricted balance sheets and internalised trades. During the second half of 2014/15 macroeconomic developments in the Eurozone contributed to an uptick in trading activity. There has been a steady flow of small boutique hedge funds replacing the bank flow.

FX and money markets

The FX and money markets business comprises spot, forwards and cash products. For the year ended 31 March 2015, revenue fell by 5% on a reported basis. After a period of low exchange rate volatility in the first half of the year, central banks' actions and geopolitical developments drove increased volatility and trading activity in FX markets. Cash products performed well, especially in the Americas, as customers used the product to manage short-term funding requirements.

Credit

The credit business comprises corporate bonds and credit derivatives, and contributes the smallest share of Global Broking's revenue (8%). The credit business has been restructured, and product offerings have been streamlined, with 13 desk closures and the reduction of ICAP's stake in the First Brokers business (down to 40%).

Revenue for the year ended 31 March 2015 is 14% below the prior year on a reported basis. The remaining business benefited from a pick up in recent bond issuance following Eurozone quantitative easing as participants look to lock in low funding costs. In January 2015, Scrapbook was launched, an anonymous, session-based e-solution for the corporate bond market. Accessed via ICAP's e-Commerce portal, Scrapbook helps corporate bond traders identify opportunities and manage their positions more efficiently.

Trading profit before tax

The Group's £252 million trading operating profit (2013/14 - £290 million) converted to a trading profit before tax of £229 million (2013/14 - £271 million) after deducting net finance costs of £31 million (2013/14 - £27 million) and recording a share of profit of joint ventures and associates after tax of £8 million (2013/14 - £8 million).

Trading net finance costs were £4 million higher than the prior year. Interest payable and similar charges were £3 million lower this year, primarily benefitting from the lower charges on the new eurobond. Excluding the adverse effect from the double running of the bonds in 2014/15, the annualised savings in finance costs from the new eurobond will be £6 million. The double running of the bonds until July 2014 also resulted in a £1 million increase in interest income. The £4 million benefit to 2014/15 trading net finance costs from lower changes and higher interest income was partially offset as no dividends were received from the available-for-sale investments in the current year (2013/14 - £3 million). Additionally, the prior year included certain one-off credits of £5 million.

Movements in exchange rates had a £32 million adverse impact on year-on-year revenue and a £14 million adverse impact on trading profit before tax. These impacts are primarily driven by the strengthening of the US dollar against sterling.

Tax on trading profit

The Group's tax charge of £44 million on trading profit before tax represents an effective tax rate (ETR) of 19% (2013/14 -22%). The ETR primarily reflects the various statutory tax rates applied to taxable profits in territories in which the Group operates.

The trading ETR is three percentage points lower this year, driven by a decrease in the UK statutory tax rate from 22% to 21% and the impact of the geographic mix of profits. In the absence of certain one-off prior year adjustments, the underlying ETR is in the range of 23% to 25%.

Trading EPS and dividend

The Group reported a trading EPS of 28.7p per share, a decrease of 14% on the prior year. This reflects a 15% decrease in the trading profit before tax, which was partially offset by a three percentage point reduction in the ETR.

The directors recommend a final dividend of 15.4p per share, reflecting strong cash generation and the board's confidence in the medium term prospects for the business. If approved, the final dividend will be paid on 24 July 2015 to shareholders on the register at the close of business on 3 July 2015. The shares will be quoted ex-dividend from 2 July 2015.

The full-year dividend will be 22.0p (2013/14 - 22.0p) including the payment of the 6.6p interim dividend on 6 February 2015. The full-year dividend per share is covered 1.3 times (2013/14 - 1.5 times) by trading EPS of 28.7p.

Free cash flow

ICAP is cash generative and we continue to expect free cash flow and post-tax trading profit to converge over the medium term.

Free cash flow conversion for the year was 106% (2013/14 - 75%) of the Group's trading profit. The 31 percentage point improvement is primarily due to timing differences on working capital and tax payments. The 75% cash conversion in 2013/14 was unusually low as a result of unfavourable timing differences from working capital and significant higher capital expenditure in that year compared with depreciation and amortisation charges recorded.

Cash generated from operating activities before exceptional items of £313 million was marginally down on the prior year, as a £38 million decrease in trading operating profit in the year was offset by the reversal of an adverse timing difference in working capital movements in the prior year. For further information, see note 9 to the financial statements.

Net payments in respect of interest and tax have decreased by £34 million to £66 million, primarily driven by timing differences related to tax payments. Interest and tax paid of £66 million (2013/14 - £100 million) includes £35 million (2013/14 - £31 million) of net interest and £31 million (2013/14 - £69 million) of tax. Net interest payments are £4 million higher this year due to the double running of the eurobonds up to July 2014. Net payments in relation to tax benefitted from a combination of a lower tax charge in the current year and tax refunds received relating to certain overpayments in the prior year.

Application of free cash flow

Cash flow from trading activities of £247 million (2013/14 - £214 million) was used to pay £141 million in dividends to the shareholders as the Group continues to maintain strong dividend payments. To propel future growth, £57 million was invested primarily in technology assets and £36 million was invested to successfully complete the Group's restructuring programme.

Additionally, a significant amount of cash spend on technology during the year was directly charged to the income statement. ICAP's market leading position has been achieved and maintained through substantial investment over many years in technology and market-user infrastructure. ICAP is committed to maintaining a high level of investment in technology assets, especially in growth areas in Electronic Markets and Post Trade Risk and Information, over the coming years as we continue our drive to improve and widen our product offerings to our customers.

Profit for the year

Acquisition and disposal costs

Acquisition and disposal costs in the year were £59 million (2013/14 - £74 million) before a tax credit of £15 million (2013/14 - £26 million). The acquisition and disposal costs in the year primarily represent amortisation of acquired intangibles. See note 3 to the financial statements for a more detailed breakdown of the Group's acquisition and disposal costs.

The £15m decrease in acquisition and disposal costs reflects an £11m impairment charge recorded in 2013/14. There was no impairment charge recorded in 2014/15.

Exceptional items

The Group discloses separately items that are non-recurring and material in terms of both size and nature. This allows appropriate visibility of these items and reflects how information is reviewed by management. It allows focus on the Group's trading performance, as well as due attention specifically on the exceptional matters.

For the year to 31 March 2015 exceptional items were £75 million (2013/14 - £76 million) before a tax credit of £18 million (2013/14 - £12 million).

The Group has now completed its restructuring programme. The Group recorded a £60 million charge during the year to implement the restructuring programme, of which £24 million is non-cash expense, comprising of property related provisions and other accruals.

The remaining £15 million relates to the regulatory matters including a £11 million provision relating to a €14.9 million fine imposed by the European Commission for alleged competition violations in relation to yen Libor, in respect of the same underlying matters that ICAP Europe Limited, a subsidiary of ICAP's Global Broking division, settled with the Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC) in September 2013. ICAP has appealed and is seeking a full annulment of the Commission's decision.

For further information, see note 4 to the financial statements.

Balance sheet highlights

The Group's net assets as at 31 March 2015 were £35 million higher at £1,018 million (31 March 2014 - £983 million). The retained deficit in the year of £57 million (net of £141 million dividend payments) was offset by a £91 million favourable FX movement, principally as a result of a stronger US dollar on the net assets, including goodwill, on our US businesses.

Intangible assets arising on consolidation

The Group's goodwill and other intangible assets arising from consolidation as at 31 March 2015 was £930 million (2013/14 - £933 million), with 90% of the balance represented by the Electronic Markets and Post Trade Risk and Information divisions.

Other intangible assets were amortised by £55 million (2013/14 - £64 million) during the year. Additionally, £15 million of goodwill and other intangible assets were transferred to disposal group as the sale of the Group's shipbroking business was classified as held for sale as at 31 March 2015. See note 10 to the financial statements.

This £70 million combined decrease was partially offset by a £67 million favourable movement in FX. Strengthening of the US dollar resulted in an increase of £76 million in the balance during the year, which was partially offset by a £9 million decrease in euro-denominated assets resulting from the weakening of the euro against sterling in the year. These currencies represented 77% of the Group's goodwill and other intangibles.

Management reviewed the Group's goodwill and other intangible assets arising on consolidation for impairment as at 31 March 2015 and concluded that there was no impairment at that date.

Liquidity and funding

The Group's overall funding position as at 31 March 2015 remains strong.

The gross debt position including overdrafts of £33 million (2013/14 - £1 million), net of fees, decreased by £238 million to £549 million as at 31 March 2015 as the Group repaid €300 million of senior notes in July 2014, with the repayment financed by the issuance of a €350 million bond in March 2014.

Net debt at 31 March 2015 was £68 million (2013/14 - £89 million), excluding the Group's restricted funds of £43 million (2013/14 - £39 million). The £21 million decrease in net debt was principally driven by the 106% free cash flow conversion in the year. After payments of £141 million in dividends to shareholders and £48 million in exceptional payments, there was an excess of £7 million in trading free cash flow. The net debt position also benefited from a £14 million favourable movement in FX, principally in euro-denominated debt.

The next debt maturity is the Group's $193 million (equivalent to £130 million) of guaranteed subordinated loan notes due in June 2015. As at 31 March 2015, the Group had committed undrawn headroom under its core credit facilities of £425 million (2013/14 - £425 million).

In December 2014, as part of a peer review with another interdealer broker, Moody's downgraded the Group's long-term issuer default rating on senior debt from Baa2 (negative) to Baa3 (negative), reflecting its opinion on pressure facing the interdealer brokers. The rating by Fitch remained unchanged at BBB (stable).

Regulatory capital

ICAP operates its business under an investment firm waiver which currently runs until April 2016. The waiver modifies the basis on which regulatory capital is calculated for the Group, and at 31 March 2015 ICAP had £0.7 billion (2013/14 - £0.9 billion) of headroom on this basis. The effect of the waiver is to exclude goodwill and other intangibles from the calculation and, in doing so, allows the Group to undertake acquisitions using debt rather than equity finance.

In the event that the waiver was not renewed, applying a consolidated approach to credit and market risks would give an incremental regulatory capital requirement of approximately £0.5 billion, which in line with recent precedent, would most likely be eliminated through retained profits over time.

ICAP operates 45 regulated subsidiaries globally. Each is locally capitalised and regulated. Together these entities hold £430 million of cash (including restricted funds) of which £357 million (2013/14 - £375 million) is held by the Global Broking businesses. Electronic Markets and Post Trade Risk and Information hold £55 million (2013/14 - £45 million) and £18 million (2013/14 - £17 million) respectively.

Consolidated income statement

Year ended 31 March 2015

Year ended 31 March 2014

Consolidated statement of comprehensive income

Consolidated and Company balance sheet

The financial statements were approved by the board on 19 May 2015 and signed on its behalf by:

Michael SpencerGroup Chief Executive Officer

Consolidated statement of changes in equity

Company statement of changes in equity

Consolidated and Company statement of cash flow

*Net of £33m overdraft as at 31 March 2015 (2013/14 - £1m).

Notes to the financial statements

1. Basis of preparation

Preparation of financial statements

The consolidated financial statements of the Group and the separate financial statements of ICAP plc have been prepared in accordance with IFRSs, as issued by the IASB and the interpretations issued by the IFRS Interpretations Committee (IFRIC) and their predecessor bodies, and as endorsed by the EU and the Companies Act 2006 applicable to companies reporting under IFRS. In publishing the parent company financial statements here together with the Group financial statements, ICAP plc has taken advantage of the exemption in section 408(3) of the Companies Act 2006 not to present its individual income statement, individual statement of comprehensive income and related notes that form a part of these financial statements. The financial statements are prepared in pound sterling, which is the functional currency of the Company and presented in millions. ICAP plc is incorporated and domiciled in the UK.

The significant accounting policies adopted by the Group and the Company are included within the notes to which they relate and are shaded.

The preparation of financial statements requires management to apply judgements and the use of estimates and assumptions about future conditions. Management considers impairment of goodwill and other intangible assets arising on consolidation to be the area where increased judgement is required. Further information about key assumptions concerning the future, and other key sources of estimation uncertainty, are set out in the relevant notes in the financial statements. Estimates and assumptions are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Due to the inherent uncertainty in making estimates, actual results reported in future periods may be based on amounts which differ from those estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

During the year Group adopted the following new accounting standards:

· IFRS10 'Consolidated Financial Statements' (replaced IAS27 'Consolidated and Separate Financial Statements');

· IFRS11 'Joint Arrangements' (replaced IAS31 'Interests in Joint Ventures');

· IFRS12 'Disclosure of Interests in Other Entities';

· IAS27 'Separate Financial Statements' (replaced IAS27 'Consolidated and Separate Financial Statements'); and

· IAS28 'Investments in Associates and Joint Ventures' (replaced IAS28 'Investments in Associates').

The adoption of IFRS11 'Joint Arrangements' and IAS28 'Investments in Associates and Joint Ventures' had a material effect on the consolidated income statement as the Group's joint ventures are now accounted for using the equity accounting method under IAS28. Income statement and balance sheet line items for the prior year comparatives have been restated. The impact of the retrospective adoption on the profit after tax for the year ended 31 March 2014 was £nil, but restated revenue and operating expenses were £19m and £14m lower, respectively. The balance sheet impact was immaterial, hence an opening balance sheet as at 1 April 2014 has not been presented. Restated non-current assets were £5m higher, offset by a decrease of £7m in restated current assets. The £2m net decrease in restated total assets was offset by £2m decrease in restated current trade and other payables.

The adoption of other standards had no material impact on the financial statements for the year ended 31 March 2015.

Presentation of the income statement

The Group maintains a columnar format for the presentation of its consolidated income statement. The columnar format enables the Group to continue its practice of improving the understanding of its results by presenting its trading profit. This is the profit measure used to calculate trading EPS (note 5) and is considered to be the most appropriate as it better reflects the Group's trading earnings. Trading profit is reconciled to profit before tax on the face of the consolidated income statement, which also includes acquisition and disposal costs and exceptional items.

The column 'acquisition and disposal costs' includes: any gains, losses or other associated costs on the full or partial disposal of investments, associates, joint ventures or subsidiaries and costs associated with a business combination that do not constitute fees relating to the arrangement of financing; amortisation or impairment of intangible assets arising on consolidation; any re-measurement after initial recognition of deferred contingent consideration which has been classified as a liability; any gains or losses on the revaluation of previous interests. The column may also include items such as gains or losses on the settlement of pre-existing relationships with acquired businesses and the re-measurement of liabilities that are above the value of indemnification.

Items which are of a non-recurring nature and material, when considering both size and nature, are disclosed separately to give a clearer presentation of the Group's results. These are shown as 'exceptional items' on the face of the consolidated income statement.

Basis of consolidation

The Group's consolidated financial statements include the results and net assets of the Company, its subsidiaries and the Group's share of joint ventures and associates.

Subsidiaries

An entity is regarded as a subsidiary if the Group has control over its strategic, operating and financial policies and intends to hold the investment on a long-term basis for the purpose of securing a contribution to the Group's activities.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of acquisition is measured at fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in the business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the costs of the acquisition are less than the fair value of the net assets acquired, the difference is recognised directly in the consolidated income statement.

Fees associated with an acquisition are expensed as incurred. When the Group increases its investment in an entity resulting in an associate becoming a subsidiary, the intangibles related to the acquisition are valued and the element of those not previously recognised as a share of net assets are recorded as revaluation gains realised in the year in other comprehensive income. A change of ownership that does not result in a loss of control is classified as an equity transaction, with the difference between the amount by which the non-controlling interest is recorded and the fair value of the consideration received recognised directly in equity.

Where the Group has issued a put option over shares held by a non-controlling interest, the Group derecognises the non-controlling interests and instead recognises a contingent deferred consideration liability for the estimated amount likely to be paid to the non-controlling interest on exercise of those options. The residual amount, representing the difference between any consideration paid/payable and the non-controlling interest's share of net assets, is recognised in equity. Movements in the estimated liability after initial recognition are recognised within the consolidated income statement. Where the Group has a call option over shares held by a non-controlling interest, the Group continues to recognise the non-controlling interest until it is certain that the option will be called. At that point the accounting treatment is the same as for a put option.

The results of companies acquired during the year are included in the Group's results from the effective date of acquisition. The results of companies disposed of during the year are included up to the effective date of disposal.

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

On consolidation, the accounting policies of Group companies (the Company and its subsidiaries) are consistent with those applied by the Group. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated as part of the consolidation process. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Joint ventures

A joint venture is an entity in which the Group has an interest and, in the opinion of the directors, exercises joint control over its operating and financial policies. An interest exists where an investment is held on a long-term basis for the purpose of securing a contribution to the Group's activities. Following the adoption of IFRS11 'Joint Arrangements' and IAS28 'Investments in Associates and Joint Ventures' on 1 April 2014, investments in joint ventures are recognised using the equity method. Under this method, such investments are initially stated at cost, including attributable goodwill, and are adjusted thereafter for the post-acquisition change in the Group's share of net assets.

Associates

The Group classifies investments in entities over which it has significant influence, but not control, and that are neither subsidiaries nor joint ventures, as associates. Investments in associates are recognised using the equity method. Under this method, such investments are initially stated at cost, including attributable goodwill, and are adjusted thereafter for the post-acquisition change in the Group's share of net assets.

Foreign currencies

In individual entities, transactions denominated in foreign currencies are recorded at the prior month closing exchange rate between the functional currency and the foreign currency. At each end of the reporting period, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Exchange differences are recognised in the consolidated income statement, except for exchange differences arising on non-monetary assets and liabilities where these form part of the net investment of an overseas business or are designated as hedges of a net investment or cash flow and, therefore, the changes in value resulting from exchanges, differences are recognised directly in other comprehensive income.

On consolidation, the results of businesses with non-pound sterling functional currencies are translated into the presentational currency of the Group at the average exchange rates for the year where these approximate to the rate at the date of the transactions. Assets and liabilities of overseas businesses are translated into the presentational currency of the Group at the exchange rate prevailing at the end of the reporting period. Exchange differences arising are recognised within other comprehensive income. Cumulative translation differences arising after the transition to IFRS are taken to the consolidated income statement on disposal of the net investment.

Goodwill and fair value adjustments arising on the acquisition of a non-pound sterling entity are treated as assets and liabilities of that entity and translated into the presentational currency of the Group at the period closing rate. Where applicable, the Group has elected to treat goodwill and fair value adjustments arising before the date of transition to IFRS as denominated in the presentational currency of the Group.

In the consolidated statement of cash flows, cash flows denominated in foreign currencies are translated into the presentational currency of the Group at the average exchange rates for the year or at the rate prevailing at the time of the transaction where more appropriate.

Future accounting developments

At 31 March 2015, the following standards have been issued by the IASB which are not effective for these consolidated financial statements.

· In July 2014, IASB issued IFRS9 'Financial Instruments', which will replace IAS39 'Financial Instruments: Recognition and Measurement'. The standard will be effective for annual periods beginning on or after 1 January 2018. ICAP intends to adopt IFRS9 for its financial statements for the year ending 31 March 2019.

· In May 2014, IASB issued IFRS15 'Revenue from Contracts with Customers', which will replace IAS18 'Revenue' and IAS11 'Construction Contracts' and other related interpretations on revenue recognition. The standard will become effective for annual periods beginning on or after 1 January 2017. ICAP intends to adopt IFRS15 for its financial statements for the year ending 31 March 2018.

The impact on ICAP financial statements from the adoption of these IFRS standards are currently being assessed and will be disclosed closer to the time of the adoption.

2. Segmental information

The Group has determined its operating segments based on the management information including trading revenue and trading operating profit reviewed on a regular basis by the Company's board. The Group considers the executive members of the Company's board to be the Chief Operating Decision Maker (CODM). ICAP's three operating segments are Electronic Markets, Post Trade Risk and Information and Global Broking.

Revenue comprises brokerage or access fees from its Electronic Markets business, fees from the provision of Post Trade Risk and Information services and commission from the Group's Global Broking business.

Electronic Markets

The Group acts as a broker for FX, interest rate derivatives, fixed income products and CDS through the Group's electronic platforms. Revenue is generated from brokerage fees which are dependent on the average trading volumes. The Group also charges fees to use the electronic trading platform for access to liquidity in the FX or precious metal markets.

Post Trade Risk and Information

The Group receives fees from the sale of financial information and provision of post trade risk and information services to third parties. These are stated net of VAT, rebates and other sales taxes and recognised in revenue on an accruals basis to match the provision of the service. Amounts receivable at the year end are reported as other trade receivables within trade and other receivables.

Global Broking

Matched principal and stock lending business

Certain Group companies are involved in a non-advisory capacity as principals in the matched purchase and sale of securities and other financial instruments between our customers. Revenue is generated from the difference between the purchase and sale proceeds and is recognised in full at the time of the commitment by our customers to sell and purchase the security or financial instrument. The revenue generated by the stock lending business is not material to the Group.

Agency business (name give-up)

The Group acts in a non-advisory capacity to match buyers and sellers of financial instruments and raises invoices for the service provided. The Group does not act as principal in name give-up transactions and only receives and transmits orders between counterparties. Revenue is stated net of rebates and discounts, VAT and other sales taxes and is recognised in full on the date of the trade. Amounts receivable at the year end are reported as other trade receivables within trade and other receivables.

For the shipbroking business, the Group acts in a non-advisory capacity to match buyers and sellers of services and recognises revenue, net of rebates and discounts, VAT and other sales taxes when the Group has a contractual entitlement to commission, normally the point at which there is a completion of contractual terms between the principals of a transaction. Amounts receivable at the year end are reported as other trade receivables within trade and other receivables.

Execution on exchange business

The Group also acts as a broker of exchange listed products, where the Group executes customer orders as principal and then novates the trade to the underlying customer's respective clearing broker for settlement. Revenue is generated by raising invoice and is recognised on the trade date.

3. Operating expenses

4. Exceptional items

Exceptional items are non-recurring significant items that are considered material in both size and nature. These are disclosed separately to enable a full understanding of the Group's financial performance.

Restructuring programme

In response to the prevailing market conditions, the Group has completed a restructuring programme aimed at focusing and realigning systems, processes and legal entity structures and increasing workforce productivity. The programme covers all of the Group's activities, with a particular focus on the Global Broking division and Group infrastructure.

In the year ended 31 March 2015, 496 brokers and 244 infrastructure staff left the company, which resulted in one-off staff termination costs of £35m.

Additionally, office spaces in key regions including London, New York and Singapore have been vacated and are currently being marketed for sublease. As such, £18m of property exit costs including onerous lease provisions and associated moving costs were charged to the income statement. This included a provision for onerous lease and associated costs of £17m, net of £3m of estimated income from the sublease of one of the properties. As at 31 March 2015, income from subleasing of other properties could not be reliably estimated, hence the provision only reflects the present value of rental charges of the obligations over the lease periods of these properties. In 2015/16, it is possible that some of the provision will be released when there are more certainties over income from the subleasing of the properties.

Other restructuring costs is primarily driven by £3m impairment of IT assets and £4m of legal and professional fees connected with the Group reorganisation.

Regulatory matters

In February 2015 the European Commission imposed a fine of £10.9m (€14.9m) on ICAP for alleged competition violations in relation to yen Libor, in respect of the same underlying matters that ICAP Europe Limited, a subsidiary of ICAP's Global Broking division, settled with the FCA and the US CFTC in September 2013. ICAP has appealed and is seeking a full annulment of the Commission's decision.

The remaining £4m relates to associated legal and professional costs incurred during the year on regulatory matters, principally as ICAP continues to co-operate with the CFTC in their investigation into the setting of USD ISDAfix rates.

5. Earnings per share

The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. The Group also calculates trading EPS from the trading profit. The Group believes that this is the most appropriate measurement for assessing ICAP's performance since it better reflects the business's trading earnings.

The diluted EPS is calculated by adjusting share capital in issue for additional weighted average number of ordinary shares that are likely to be issued under various employee share award schemes as at the balance sheet date.

EPS relating to the Group's operations

6. Dividends payable

The Company recognises the final dividend payable only when it has been approved by the shareholders of the Company in a general meeting. The interim dividend is recognised when the amount due has been paid.

The final dividend for the year ended 31 March 2014 and the interim dividend for the year ended 31 March 2015 were both satisfied in full with cash payments of £99m and £42m respectively.

The directors have proposed a final dividend of 15.40p per share for the year ended 31 March 2015. This has not been recognised as a liability of the Group at the year end as it has not yet been approved by shareholders. Based on the number of shares in issue at the year end, the total amount payable would be £99m. Therefore, subject to shareholders' approval of the proposed final dividend of 15.40p per share, the full-year dividend will be 22.00p per share, which will be covered 1.3 times (2013/14 - 1.5 times) by the trading EPS of 28.7p per share (2013/14 - 33.2p per share).

The right to receive dividends has been waived in respect of the shares held in employee share trusts and no dividend is payable on Treasury Shares.

7. Tax

Tax on the profit for the year comprises both current and deferred tax as well as adjustments in respect of prior years. Tax is charged or credited to the consolidated income statement, except when it relates to items charged or credited to other comprehensive income or directly to equity, in which case the tax is also included in other comprehensive income or directly within equity respectively.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted, or substantively enacted, by the end of the reporting period.

Deferred tax is recognised using the liability method, in respect of temporary differences between the carrying value of assets and liabilities for reporting purposes and the tax bases of the assets and liabilities. Deferred tax is calculated at the rate of tax expected to apply when the liability is settled or the asset is realised. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries, joint ventures, associates and intangibles arising on consolidation, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax liabilities are offset against deferred tax assets within the same taxable entity or qualifying local tax group where there is both the legal right and the intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Calculations of current and deferred tax liability have been based on ongoing discussions with the relevant tax authorities, management's assessment of legal and professional advice, case law and other relevant guidance. Where the expected tax outcome of these matters is different from the amounts that were recorded initially, such differences will impact the current and deferred tax amounts in the period in which such determination is made.

Tax charged to the consolidated income statement in the year

The Group's share of profit of associates in the consolidated income statement is shown net of tax of £2m (2013/14 - £2m).

The Group's share of joint ventures in the consolidated income statement is shown net of tax of £1m (2013/14 - £1m).

The Group's 2014/15 effective tax rate on trading profit is 19% (2013/14 - 22%).

8. Net finance expense

In 2013/14 dividends received on equity investments included £2m received from Corretaje e Informacion Monetaria y de Divisas SA. The investment in Corretaje e Informacion Monetaria y de Divisas SA became an associate in May 2013.

9. Cash

Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments which are subject to insignificant risk of change in fair value and are readily convertible into a known amount of cash with less than three months' maturity.

The Group holds money, and occasionally financial instruments, on behalf of customers (client monies) in accordance with local regulatory rules. Since the Group is not beneficially entitled to these amounts, they are excluded from the consolidated balance sheet along with the corresponding liabilities to customers.

Restricted funds comprise cash held with a CCP clearing house, or a financial institution providing ICAP with access to a CCP, and funds set aside for regulatory purposes, but excluding client money. The funds represent cash for which the Group does not have immediate and direct access or for which regulatory requirements restrict the use of the cash.

(a) Reconciliation of Group profit before tax to net cash flow from operating activities

*includes £8m settled in the year with the SEC.

(b) Net debt

Net debt comprises total cash less other debt.

(c) Total cash

(d) Cash information by businesses