Half Year Results to 30 September 2010

ICAP plcHalf Year Results to 30 September 2010

London - 17 November 2010 ICAP plc (IAP.L), the world's premier interdealer broker, today announced its report for the half year ended 30 September 2010.

Group highlights:

·; Group revenues increased by 9% to £867 million (30 September 2009 - £794 million). Revenues on an underlying basis5 increased by 2%

·; EPS (continuing adjusted basic)4 increased by 9% to 20.8p (30 September 2009 - 19.1p)

·; Over 51% of ICAP operating profits now from non-voice broking activities

·; Successful launch in September of electronic euro interest rate swap platform - close to €110 billion volume transacted and more than 1,000 trades

·; Electronic revenues increased by 24% to a record £151 million (30 September 2009 - £122 million)

·; Group operating profit margin3 23% (30 September 2009 - 23%)

·; Free cash flow6 of £48 million (30 September 2009 - £107 million). Net debt7 of £184 million (31 March 2010 - £148 million)

·; Interim dividend payment to shareholders of 5.27p per share, an increase of 3%

Michael Spencer, Group Chief Executive Officer, said, "ICAP has performed well during the six months and we have continued to make significant progress towards our strategic goals, including the launch of the electronic euro interest rate swaps platform with market maker support. During a period of generally quieter markets ICAP has delivered good revenue and earnings growth driven primarily by our strong electronic broking franchise.

The Group remains focused on the disciplined execution of our strategy and we have positioned the business for sustained long-term development. This year we are concentrating on organic growth and remain committed to a collaborative relationship with our bank customers.

As the banks and our regulators seek to create more resilient, robust and orderly OTC derivatives markets we are working to expand the use of the market infrastructure we have built. As a result we believe that we can continue to deliver sustainable long term growth."

There will be a briefing for analysts and investors at 09:30 GMT on Wednesday 17 November 2010 at 2 Broadgate, London EC2M 7UR. A webcast of the presentation made to analysts at 09:30 GMT on Wednesday 17 November 2010 will be available on the web site, www.icap.com at 17:00 GMT on Wednesday 17 November 2010. It will remain on the web site for six months. A further conference call will be held at 14:30 GMT/09:30 EST for investors and analysts in North America. For dial in details and a copy of the presentation please contact Maitland on +44 (0) 20 7379 5151.

A conference call for press will be held at 11:00 GMT on Wednesday 17th November 2010 to discuss this statement. For dial in details please contact Maitland on +44 (0) 20 7379 5151.

Contacts:Michael Spencer Group Chief Executive Officer +44 (0) 20 7050 7400Mike Sheard Director of Corporate Affairs +44 (0) 20 7050 7103Alexandra Umpleby Head of Media Relations +44 (0) 20 7050 7104Alex Dee Head of Investor Relations +44 (0) 20 7050 7123Neil Bennett Maitland +44 (0) 20 7379 5151

Notes to editors:

About ICAP

ICAP is the world's premier interdealer broker and provider of post trade risk and information services. The Group matches buyers and sellers in the wholesale markets in interest rates, credit, commodities, foreign exchange, emerging markets, equities and equity derivatives through voice and electronic networks. For more information go to www.icap.com

Notes:

1 The comparative results have been re-presented to disclose separately the results of the discontinued operations and the change in definition of the column "acquisition and disposal costs".

2 Profit is defined as pre-tax profit from continuing operations before acquisition and disposal costs and exceptional items.

3 From continuing operations excluding acquisition and disposal costs and exceptional items.

4 Adjusted basic EPS is based on total earnings before acquisition and disposal costs and exceptional items (and their tax effects). Continuing adjusted basic EPS is based on earnings from continuing operations before acquisition and disposal costs and exceptional items.

5 From continuing operations are stated at constant translation and transactional foreign exchange, excluding acquisition and disposal costs, exceptional items, and the impact of TriOptima acquired on 24 March 2010.

6 Free cash flow is net cash flow from operating activities after deducting capital expenditure and adding dividends received from associates and investments.

7 Net debt is cash and cash equivalents less long and short term borrowings and overdrafts.

8 Underlying comparison excludes the impact of TriOptima acquired on 24 March 2010 and is at constant translation and transactional foreign exchange.

9 The comparative results have been re-presented to include Link and ICAP shipping within the core voice segment as these businesses are no longer considered new businesses.

Review of operations

Group revenue from continuing operations for the half year at £867 million was 9% above last year with electronic broking showing a 24% increase, post trade risk and information services a 30% increase and voice broking a 2% rise in revenues. Revenues on an underlying basis5 increased by 2%. Increased interest costs resulting from the previously disclosed refinancing of ICAP's debt facilities lowered adjusted profit before tax growth.

ICAP produced a profit from continuing operations in the half year to 30 September 2010 of £183 million (2009 - £179 million) before taxation, acquisition and disposal costs and exceptional items; 2% higher than the prior year. EPS has grown by 9% reflecting the lowering of the ongoing effective tax rate to 30% and a one-time benefit from settling tax matters which will reduce the effective tax rate to 26% in the current financial year.

On a statutory basis, profit before taxation from continuing operations was £116 million for the half year ended 30 September 2010 (2009: £150 million), reflecting the impact of the exceptional items and the commencement of the amortisation of TriOptima's intangible assets for the first time. We believe that profit before taxation, acquisition and disposal costs and exceptional items better reflects the Group's year-on-year performance. This measure is reconciled to profit before taxation on the face of the consolidated income statement.

Combined, ICAP's electronic broking and post trade risk and information services businesses for the first time accounted for over 50% of operating profit in the period.

ICAP has performed well during the six months and we have continued to make significant progress towards our strategic goals, including the important launch of the electronic euro interest rates swaps platform with market maker support. During a period of generally quieter markets ICAP has delivered good revenue and earnings growth driven primarily by our electronic broking franchise. We estimate that we have again increased our share of the overall interdealer broking market.

The electronic euro interest rates swaps platform launched in September brings increased transparency and greater efficiency, as well as lower transaction costs to the world's largest OTC derivative market. This initiative will make a substantial contribution towards further reducing operational and systemic risks in trading OTC derivatives. This is a prime example of how we work closely with our customers, aligning our interests with theirs and expanding their use of ICAP's developing market infrastructure.

Our goals are to be the leading global intermediary, the leading post trade risk services provider and the main infrastructure provider to the world's wholesale financial markets. We aim to increase our market share to at least 35% of overall interdealer market revenues and to generate operating profit evenly distributed between voice broking, electronic broking and post trade risk and information services. During this financial year we are focused on organic opportunities, leveraging existing assets and working with our customers to expand the use of the market infrastructure our investment has developed.

In line with this focus, ICAP has exited a number of associates active in non-core agency voice markets and has recognised a net exceptional post tax charge of £11 million.

Financial markets reform

Significant progress is being made by regulators in proposing changes to financial regulation which aim to strengthen supervision and market infrastructure. It is clear that there will be a long road to travel, as once the changes have been agreed, implementation of some aspects will be phased over several years.

The Basel III capital and liquidity reform package has recently been published as well as the banks' capital requirements. We expect a clearer view will now emerge of the potential impact on the operations of banks and their customers as a result of the way their trading operations (both proprietary and flow) are treated for risk and capital purposes.

Regulators also want to lower operational and systemic risk through greater automation and increased transparency of trading execution. The European Commission has begun a review of the Markets in Financial Instruments Directive (MiFID) which aims to bring OTC derivatives trading fully under MiFID. In the United States, the DTCC and SEC are consulting with the industry and the wider markets on the detailed rules that will cover swap execution facilities.

The regulatory push towards more electronic or hybrid trading of derivatives and central clearing are positive drivers for our sector. As a leading provider of OTC market infrastructure, ICAP is in a very strong position to work with market participants and lead new initiatives to address regulatory concerns, the most recent example of which is ICAP's electronic interest rate swap platform. The platform is regulated as a multilateral trading facility (MTF) by the FSA under MiFID. It provides full audit ability and transparency for regulators.

Significant progress is being made on the European Market Infrastructure Regulations (EMIR) which focuses on OTC derivatives, Central Counterparties (CCPs) and trade repositories. Trade repositories have a central role in the development of a more robust market infrastructure potentially providing regulators rapid post trade reporting and position monitoring together with ongoing exposure analysis.

In addition to reducing counterparty risk through the extension of central clearing of eligible derivatives, ICAP believes that there will be significant continuing demand for bilateral clearing of the many OTC derivatives that are not suitable for CCP clearing. Regulators are increasingly aware of the need to build resilience in these markets and ICAP is working on the development of automated collateral management networks to streamline the process for both banks and their customers. This reduces cost, improves efficiency and mitigates risk.

Above all however, we believe that the many changes proposed will stimulate the banks and market infrastructure providers, including ICAP, to further technological innovation that will help achieve the objectives of the regulators for more resilient markets, and thereby create the opportunities for building new businesses.

Divisional performance

ICAP reports on segments of its business in the same way externally as we manage and report the business internally. The major segments are core voice broking, new businesses, electronic broking and post trade risk and information services.

Core voice broking

ICAP's goal is to expand our leading voice broking business by increasing market share and the start up of new businesses. Those new businesses that were started or acquired during the past two years are covered in a separate section below. Normally, after two years those businesses are reported in this core voice broking section. From 1 April 2010, Link and ICAP Shipping are classified within the core voice segment as these businesses are no longer considered new businesses.

Revenue per broker increased from £533,000 to £546,000 with the number of brokers increasing marginally to 2,304. Overall during this six month period our interest rate derivatives, commodities and emerging markets businesses performed well. Following a good start to the year, credit markets quietened during later months. The equity derivatives businesses, which are included in each of the core voice broking regions, have recently been adversely affected by low cash volumes and reduced risk appetite.

The interest rates businesses in EMEA in both G11 and emerging market currencies performed strongly. In the Americas, slower markets during the summer impacted results, particularly in equities. Interest rate doubts kept US Treasuries, Repo, Agencies and interest rate derivatives busy and the Latin American businesses (outside of Brazil which is included within New Businesses) performed well.

The commodities business continues to grow and we are close to building a presence in the physical crude oil market as a bolt on to the derivatives desk. This is the fifth consecutive year of underlying growth in commodities which reflects our diverse business mix and record of innovation. Shipping remains a cyclical business and made a small positive contribution to the Group in the period.

In Asia Pacific economic growth remains robust and seems likely to remain so. We continue to seek new opportunities to expand our product footprint.

In mid September, a competitor sought to hire a number of staff at ICAP AP (Singapore) Pte. Ltd. ("ICAP AP"). On 11 November 2010, the High Court of the Republic of Singapore issued an order restraining certain of those staff from undertaking work with the competitor until 1 February 2011. The Court also ordered that the competitor provide an undertaking that it would not approach any staff of ICAP AP with offers of employment until after the matter is heard at full trial which we anticipate in 2011. Although the situation is still somewhat uncertain, its potential impact is not currently regarded as likely to be material for the purposes of ICAP's results. As this is an active legal matter, we are not able to provide further detail on this dispute.

New businesses

We have made good progress building our businesses in Brazil, integrating the Arkhe business, increasing market share and growing revenue. We are continuing to expand the number of markets in which we operate.

ICAP Ocean Tomo, our leading global intellectual property brokerage, which matches buyers and sellers for the sale of patents and other intellectual property assets has been building up its operations in Europe and Asia.

The US cash equities business was adversely affected by the significantly lower volumes in this market.

The new LME desk continued to outpace our growth expectations generating solid revenues through the summer.

Electronic markets

ICAP's strategy is to grow our global electronic market business both through increasing volumes of existing products and by developing new markets.

ICAP's electronic markets business has shown a strong performance with higher revenue and increased profit. During the last six months total average daily volumes on the EBS and BrokerTec platforms reached $750.3 billion, an increase of 26% year-on-year.

In fixed income products total average daily volumes on the BrokerTec platform were $596.6 billion, an increase of 28% on the previous year. In the Americas, volumes have been robust even during the usually quieter summer months. Frequent auctions across the US Treasury curve have kept markets active, while economic numbers have also encouraged volume. US Treasury electronic broking volumes increased 34% year-on-year to $139.8 billion, and US repo volumes were up 32% year-on-year to $205.6 billion.

There was positive momentum in European repo volumes as they reached $251.2 billion, up 23% year-on-year partly as a result of the Spanish banks seeking to ease their funding issues via a central counterparty following the launch in August of a new clearing initiative.

Average daily volumes in global FX on EBS increased 18% year-on-year to $153.8 billion, volumes are gradually improving and we expect that this trend will continue. Volumes continue to grow in emerging markets currencies and recently, following the relaxation of some exchange rules between mainland China and Hong Kong, we successfully launched trading in the Chinese currency that is cleared via a Hong Kong entity.

On 6 September 2010 we successfully launched the first electronic market for trading euro interest rate swaps with market maker support. The platform is open to market making banks that have access to a clearing house and combines ICAP's established voice liquidity with a sophisticated electronic platform to create a single improved liquidity pool in a wide range of euro IRS instruments out to 30 years' maturity. Trading volumes have exceeded our expectations with a nominal value of close to €110 billion matched to date and over 1,000 trades through the electronic order book, accounting for 16% of ICAP's total euro IRS trades of this type. This is a prime example of how we work closely with our customers, aligning our interests with theirs and expanding their use of ICAP's developing market infrastructure. Five banks are supporting the platform by providing streaming prices, with two more banks technically ready to stream prices. So far, 28 banks have dealt through the electronic order book.

Post trade risk and information services

ICAP's goal is to develop our post trade risk and information businesses to provide innovative services that enable our customers to reduce their costs and risks and to increase their efficiency, return on capital and capacity to process trades.

ICAP acquired the remaining 61.78% of stock in TriOptima on 24 March 2010. TriOptima's services are aimed at reducing risk and helping financial institutions to manage their OTC derivative portfolios more efficiently. Developments to TriOptima's portfolio reconciliation service, triResolve, in the first half of 2010 included expanding its original focus of proactive portfolio reconciliation to address other operational and credit risk challenges in the bilateral margin management process. In addition to supporting all types of OTC derivatives, triResolve now also supports reconciliation of collateral positions and securities finance portfolios. Subscribers include banks, a range of buy-side institutions and investor service organisations. More than six million trades representing over 75% of all non-cleared OTC derivative transactions globally are reconciled on triResolve.

TriOptima's other main product, triReduce, has recently seen lower revenue than expected due to customers' focus on sending trades to clearing houses ahead of trade compression. This was driven by regulatory pressures, scarcity of capital, and the addition of termination cycles for transactions within LCH Clearnet's SwapClear. In credit, demand for compression is continuing despite the effort going into the routing of trades to clearing houses.

The low level of volatility in short-term interest rates slowed Reset volumes. The markets in general continue to experience very low levels of LIBOR volatility and this remains a constraint on demand. Performance has been strongest in those markets where interest rate policy has changed and volatility has returned such as AUD and NDF's. We are well placed for any more widespread movements in short-term rates. Reset has successfully launched a new service in inflation swaps. ReMatch has made a good start in emerging markets credit derivatives and has recently extended its product offering to include sovereign CDS.

Traiana has continued to expand its offering to both the buy and sell side, has added its first customers outside foreign exchange, in equities and futures, and has launched in equity derivatives. The Harmony network is now processing on average $500 billion of foreign exchange transactions daily and notwithstanding continued high levels of investment in new products, Traiana is trading profitably.

Markets

ICAP is active in a broad range of markets and the diversity of its market coverage is a key strength of the Group. The revenue and growth rates per market are given below:

Margins and costs

Group operating margin remained at 23%. The higher proportion of non-voice broking profits was offset by the continued investment in new business and strengthening our non-voice products. This reflects ICAP's strategy of continuing to develop its businesses while reaping the benefits of earlier investment.

Profit/cash conversion

Over the last three years, the Group has consistently delivered free cash flow in excess of profit after taxation. However, as a result of the timing impact of commission payments and unsettled trades on working capital, this often results in a temporary reduction at the half year. In the six months ended September 2010 the Group generated cash from operations of £108 million, down £60 million on the prior period. This is principally as a result of the impact of foreign exchange, the settlement of prior period exceptional costs, the timing of commission payments and the net impact of unsettled trades. Accordingly, free cash flow at £48 million (2009 - £107 million) fell by a similar amount.

Balance sheet

At 30 September 2010, net debt was £184 million, up £36 million on 31 March 2010. Gross debt was £641 million (31 March 2010 - £652 million). Cash and cash equivalents decreased during the period by £47 million to £457 million.

At 30 September 2010, the matched principal business resulted in the Group's balance sheet being grossed up by £68 billion (September 2009 - £65 billion).

Dividend

In the normal course of events, ICAP's interim dividends are calculated at 30% of the previous year's full year dividend. As a result, an interim dividend of 5.27p per share (2009 - 5.11p) covering the six month period to 30 September 2010 will be paid on 18 February 2011 to shareholders on the register on 7 January 2011.

Foreign exchange

The impact of sterling weakening against the US dollar and the euro was to increase profit by £19 million in the period. Should sterling trade close to current levels, the impact on the full year would be to increase profit by approximately £30 million compared with 2009/10.

Tax

The Group's effective tax rate for the six months to 30 September 2010, reduced from 33% to 26%. The ongoing tax rate is expected to be 30% with the current year benefiting from the settlement of outstanding historical matters in a number of jurisdictions.

Outlook

The Group remains focused on the disciplined execution of our strategy and we have positioned the business for sustained long-term development. This year we are concentrating on organic growth and remain committed to a collaborative relationship with our bank customers.

As the banks and our regulators seek to create more resilient, robust and orderly OTC derivatives markets we are working to expand the use of the market infrastructure we have built. As a result we believe that we can continue to deliver sustainable long-term growth.

Our markets have continued to be active since the end of September. The Federal Reserve's plans to inject $600 billion into US markets in a fresh round of quantitative easing as well as economic stimulus action by other national Governments will add support to trading activities. If the pattern of business we have seen so far continues for the rest of financial year, then the current range of analysts' forecasts for ICAP's profitI is reasonable. This assumes that exchange rates remain around today's levels for the remainder of the financial year.

Notes

I. The current forecasts for ICAP plc pre-tax profits referred to in this announcement are based on forecasts of profit before tax, acquisition and disposal costs and exceptional items provided by 11 equity analysts. The range of those forecasts for the year to March 2011 is from £333 million to £357 million. This compares with the results for the year to March 2010 when ICAP plc's comparable profit was £333 million. The source of these forecasts is Bloomberg, Reuters and the analysts.

II. This document contains forward-looking statements with respect to the financial condition, results and business of ICAP plc. By their nature, forward looking statements involve risk and uncertainty and there may be subsequent variations to estimates. ICAP plc's actual future results may differ materially from the results expressed or implied in these forward-looking statements.

III. The Group continues to classify its exposure into eight risk categories: operational, regulatory and compliance, credit, liquidity, reputational, market, financial and strategic. Of these, it considers operational and regulatory and compliance to be the principal risks. Operational risk compromises a diverse range of risk events including both direct and indirect losses from inadequate or failed internal processes, actions or omissions by people, systems failure and losses caused by external events. Regulatory and compliance risk is the risk that the Group's strategic objectives or business methodology and the risk of failure by the Group to comply with all applicable regulations. Further details of each of the eight risks categories was set out on pages 30 to 35 and pages 115 to123 of the Group's 2010 Annual Report. The Directors have reviewed these risks in the context of current market conditions and the outlook for the remaining six months of the financial year, have reconsidered the previous statements made on risk appetite, risk governance and internal control and do not consider there to be any significant changes since that report. The sections entitled 'Outlook' sets out details of the current market conditions and outlook.

IV. ICAP reports all of its broking and post trade volumes on a single count basis.

Consolidated income statement

For the six month period to 30 September 2010

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

Consolidated income statement

For the six month period to 30 September 2009

* The comparative results have been re-presented to disclose separately the results of the discontinued operations (see note 3) and the change in definition of the column "acquisition and disposal costs" column (see note 1a).

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

Consolidated income statement

For the year ended 31 March 2010

* The comparative results have been re-presented for the change in definition of the column "acquisition and disposal costs" (see note 1a).

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

Consolidated statement of comprehensive income

There is no other comprehensive income from discontinued operations.

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

Consolidated balance sheet

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

The Condensed Consolidated Interim Financial Statements, including accompanying notes, were approved by the board on 17 November 2010 and were signed on its behalf by:

Michael Spencer Matthew LesterGroup Chief Executive Officer Group Finance Director

Consolidated statement of changes in equity

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

Consolidated statement of cash flows

* Payments to acquire own shares for employee share trusts is shown net of £nil (six-month period ending 30 September 2009 £4m, year ending 31 March 2010 £5m) of contributions received from participants in the trust.

The accompanying notes form an integral part of these Condensed Consolidated Interim Financial Statements.

Notes to the financial statements

1 Basis of preparation

(a) Basis of preparation

The Condensed Consolidated Interim Financial Statements for the six months to 30 September 2010 do not constitute statutory financial information as defined in section 434 of the Companies Act 2006. The Condensed Consolidated Interim Financial Statements are unaudited but have been reviewed by the auditors, PricewaterhouseCoopers LLP, and their report is set out at the end of this document. The Annual Report for the year ended 31 March 2010 has been filed with the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

The Condensed Consolidated Interim Financial Statements for the six months to 30 September 2010 have been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the Financial Services Authority and with IAS34 "Interim Financial Reporting" as adopted by the European Union (EU). These condensed consolidated interim financial statements should be read in conjunction with the Annual Report for the year ended 31 March 2010 which was prepared in accordance with IFRS as adopted by the EU.

The accounting policies applied in the preparation of the Condensed Consolidated Interim Financial Statements are consistent with the Annual Report for the year ended 31 March 2010, except for the adoption of IFRS3 (revised), "Business Combinations" and IAS27R "Consolidated and Separate Financial Statements" as set out below.

The preparation of the Condensed Consolidated Interim Financial Statements requires the Group to make various estimates and assumptions when determining the carrying value of certain assets and liabilities. The significant judgements and estimates applied by the Group in these Condensed Consolidated Interim Financial Statements have been applied on a consistent basis with the Annual Report for the year ended 31 March 2010.

Presentation of primary statements

The Group maintains a columnar format for the presentation of its consolidated income statement. For the period commencing 1 April 2010, and for future periods, the Group has redefined the column previously entitled "amortisation and impairment of intangibles arising on consolidation" having considered the impact of the adoption of IFRS3 (revised) "Business Combinations" (effective for the Group from 1 April 2010) to the consolidated income statement. This column has accordingly been renamed as "acquisition and disposal costs" and will include: 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; any gains or losses on the disposal of investments, associates or subsidiaries; and costs associated with a combination that do not constitute fees relating to the arrangement of financing. 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. To take into account the aforementioned changes the Group has also moved the impact of the unwind of the discounting of deferred contingent consideration, which has been classified as a liability, into this column. Accordingly, the comparative consolidated income statements have been re-presented within the condensed consolidated interim financial statements. For the six month period ending 30 September 2009 acquisition and disposal costs have increased £2m from £18m to £20m and for the year ending 31 March 2010 acquisition and disposal costs increased £2m from £40m to £42m. The column will continue to include the amortisation and impairment of intangible assets arising on consolidation. Each of the items reported under the acquisition and disposal column will be excluded from the calculation of adjusted EPS. The Group believes this change will help to improve users of the financial statements understanding of the underlying results.

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.

The Columnar format enables the Group to continue its practice of improving the understanding of its results by presenting profit for the period before acquisition and disposal costs and exceptional items. This is the profit measure used to calculate adjusted EPS and is considered to be the most appropriate as it better reflects the Group's underlying cash earnings. Profit before acquisition and disposal costs and exceptional items are reconciled to profit before tax on the face of the consolidated income statement.

The Group has presented its results from the discontinuation of its European and Asia Pacific full-service agency cash equities business post-tax (note 3) below profit for the period from continuing operations. The results for the six months ending 30 September 2009 have been also been re-presented to disclose separately the results of the discontinued European and Asia Pacific cash equities business. This has had no impact on the results of the Group.

On the face of the consolidated income statement, basic and diluted EPS from continuing operations have also been disclosed. This enables the Group to provide clarity of the EPS of the continuing core business. The prior period basic and adjusted EPS has been re-presented to reflect the EPS of the continuing operations of the Group.

(b) Recent accounting developments

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 April 2010 and are considered relevant to the Group.

·; IFRS3 (revised), "Business Combinations" and Consequential Amendments to IAS27, "Consolidated and Separate Financial Statements", IAS28, "Investments in Associates", and IAS31, "Interests in Joint Ventures". These changes apply to the Group prospectively for business combinations enacted on or after 1 April 2010. The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classed as debt subsequently re-measured through the income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets. All acquisition related costs should be expensed. The Group expects that the impact on results will depend on the nature of transactions undertaken by the Group. Contingent deferred consideration payable arising from acquisitions enacted before 1 April 2010 will be remeasured in accordance with IFRS3 as movements to goodwill and not through the income statement as required by IFRS3(R).

A number of other interpretations and amendments to existing standards have been made by the IASB and IFRIC but are not considered relevant to the Group's operations.

The following new standards and amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 April 2010 and have not been early adopted:

·; Revised IAS24 "Related Party Disclosures "was issued in November 2009 and is required to be applied from 1 January 2011. It supersedes IAS24 "Related Party Disclosures" issued in 2003.

·; IFRS9, "Financial Instruments" addresses clarification and measurement of financial assets, as the first phase of the replacement of IAS39 "Financial Instruments: Recognition and Measurement" and is effective for annual periods beginning after 1 January 2013, subject to EU endorsement. The impact on the Group's financial statements of the future adoption of the standard is still under review.

2 Segment reporting

The Group has determined its operating segments based on the management information reviewed on a regular basis by the ICAP plc board. The Group considers the executive members of the ICAP plc board to be the Chief Operating Decision Maker.

The Chief Operating Decision Maker considers the business to consist of core and new business elements. The core business consists of regional voice brokerage businesses in EMEA, Americas and Asia Pacific, a global electronic brokerage business active in fixed income and FX markets and a global post trade and information services business. Each of these five business areas are managed and reviewed by the Chief Operating Decision Maker on a standalone basis and as such, are considered segments. In addition the Chief Operating Decision Maker separately manages and reviews a portfolio of new business initiatives which were either acquired or started during the course of the last two financial years.

For the period commencing 1 April 2010, Link and ICAP shipping, each of which have been owned for two years, have been moved out of the new business segment. Link has been split between each of the three core voice segments. ICAP shipping is now included within EMEA voice. Comparatives have been re-presented to show the impact. Each of the Operating segments of the Group is managed on a day-to-day basis by one or more members of the GEMG. The management of new businesses is dependent on which core area the business will eventually become part of. TriOptima, acquired on 24 March 2010, is included within post trade risk and information.

The Group continues to disclose an operating segment for the voice business in Asia Pacific even though this segment does not meet the quantitative thresholds to be mandatory under IFRS8 "Operating Segments". This is to reflect the importance of the Asia Pacific region to the Group and the way the Group is managed.

*Acquisition and disposal costs for the period to 30 September comprises amortisation of intangibles arising on consolidation.

* i) The comparative results have been re-presented separately to show the results of the discontinued European and Asia Pacific integrated full service cash equities business.

 ii) Link and ICAP shipping are no longer considered new businesses. Link is now included within each of the regional voice segments and ICAP shipping under EMEA voice.

 iii) Group costs have been reallocated to be consistent with the year ending 31 March 2010. This has resulted in £3m of Group costs being reallocated to discontinued operations and £2m to new businesses.

* i) The comparative results have been re-presented separately to show the results of the discontinued European and Asia Pacific cash equity business.

 ii) Link and ICAP shipping are no longer considered new businesses. Link is now included within each of the regional voice segments and ICAP shipping under EMEA voice.

Revenue earned by product type is disclosed below:

The Group does not earn more than 10% of its total revenue from any individual customer.

3 Discontinued operations

The income statement and cash flows related to the European and Asia Pacific cash equities business are presented as discontinued operations following the decision of the Company's board in the prior year to close the European and Asia Pacific integrated full service agency cash equities businesses. These businesses were closed as at the 31 March 2010.

An analysis of the results of discontinued operations presented within the consolidated income statement is as follows:

4 Exceptional items

During the six months to 30 September 2010, the Group recognised an exceptional, post-tax charge in its continuing business of £15m in respect of the recoverability of the loans made to a number of associates active in non-core agency voice markets (£13m) and SEC settlement related costs (£2m). During the 12 months to 31 March 2010, the Group recognised a post-tax exceptional charge of £22 million in respect of settling the SEC matter and the continuing cash equities business.

During the period a post-tax credit of £4m (30 September 2009: £nil) was recognised as exceptional items - discontinued business. During the 12 months to 31 March 2010, the Group recognised a post-tax exceptional charge of £30m in respect of the closure of its European and Asia Pacific integrated full service agency cash equities business.

5 Tax

Tax charged to the income statement in the period:

The Group's share of profit of associates in the income statement is shown net of tax of £1m (30 September 2009 - £2m).

The Group's effective tax rate is reduced due to a one off settlement reached with tax authorities which is being recognised over the year to 31 March 2011. This has resulted in a reduction of the effective tax rate for the current year by 4%. As a result of the change in mix of profits together with some operational planning, the expected tax rate as a percentage of the profit before tax from continuing operations for the year to March 2011 is expected to be 30% (31 March 2010 - 32%).

On 28 June 2010 the Chancellor announced his intention to reduce the UK corporation tax rate down to 24% over a four-year period. As at 30 September, the reduction to 27% had been substantively enacted and this has been reflected in the tax charge to 30 September 2010. As a result of this change, the Group's deferred tax liability has been reduced by £1m. The further reduction to 24% has not been substantively enacted as at 30 September and is not reflected in the tax charge for the period. The reduction to 24% is not expected to have a material impact on the deferred tax balances.

The principal movement in deferred tax relates to the release of the deferred tax liability on the amortisation of intangibles arising on consolidation.

6 Dividends

The final dividend for the year ended 31 March 2010 was satisfied with a cash payment of £56m and the allotment of 6,267,039 ICAP plc ordinary shares of 10p each issued at £3.985 (value £25m).

On 17 November 2010 the board approved an interim dividend for the year ending 31 March 2011 of 5.27p per share. The dividend will be satisfied in cash.

7 Earnings per ordinary share

The Group continues to calculate an adjusted EPS measurement ratio in the notes to the financial statements as it believes that it is the most appropriate measurement, since it better reflects the Group's underlying cash earnings.

(a) EPS relating to the Group's total operations

(b) EPS relating to the Group's continuing operations

8 Matched principal transactions

Certain Group companies conduct broking by purchasing from one party and selling to another. Such trades are complete only when both sides of the deal are settled and so the Group is exposed to risk in the event that one side of the transaction remains unsettled. Substantially all the transactions settle within a short period of time and the settlement risk is considered to be minimal. All amounts due to and payable by counterparties in respect of matched principal business are shown gross, except where a legally enforceable netting agreement exists and the asset and liability are either settled net or simultaneously.

The gross amount of matched principal transactions included in both trade and other receivables and trade and other payables is £68,379m (September 2009 - £64,701m, 31 March 2010 - £58,626m).

Certain Group companies are involved in collateralised stock lending transactions as an intermediary between counterparties. The gross amount of these transactions included within trade and other receivables and trade and other payables is £795m (September 2009 - £1,052m, 31 March 2010 - £1,034m).

9 Acquisitions

Contingent deferred consideration in respect of acquisitions

A number of acquisitions made by the Group are satisfied in part by contingent deferred consideration. The Group has re-estimated the amounts due where necessary, with any corresponding adjustments being made to goodwill.

Included within contingent deferred consideration are amounts which are exercisable at certain dates in the future on put options written over shares held by non-controlling interests where the Group considers it highly likely that these options will be exercised.

On 25 May 2010 the final payment of £20m (including £14m deferred consideration) in respect of the Link acquisition was made. As at 30 September 2010 contingent deferred consideration is £6m.

On 24 March 2010, the Group acquired the remaining 61.78% of the share capital of TriOptima AB for an initial cash consideration of Swedish krona (SEK) 1,288m (£119m), inclusive of a deferred consideration payment of £7m. The remaining £7m was paid on 10 May 2010 following approval of the 2009 financial statements. Contingent deferred consideration is payable, in two tranches, following approval of the TriOptima 2010 and 2012 financial statements and is contingent on the business achieving a minimum pre-tax profit margin and revenue target. The Group has set stretching revenue and profit targets and therefore does not expect to pay any deferred consideration.

10 Borrowings

Long-term borrowings

Short-term borrowings

On 7 May 2010, the Group refinanced its existing £473m three-year unsecured revolving credit facility and $94m swingline with a new $880m revolving credit facility incorporating an up to $200m swingline facility. The facility matures on 31 May 2013. The new facility carries a floating interest rate at LIBOR plus 2% with an additional 0.50% payable dependent on the debt to earnings ratio. The Group has drawn US dollars under this facility which have been designated as a net investment hedge against US dollar exposure.

The Group's new revolving credit facility contains a number of customary financial and operational covenants similar to its previous facility. The Group remained in compliance with the terms of these covenants throughout the six-month period ended 30 September 2010. Under the terms of the agreement, unless due to an internal re-organisation on a solvent basis, the Company is required to remain as the ultimate holding company in the Group. A change in ownership of the Company could result in the Group's new three-year unsecured revolving credit facility becoming immediately repayable.

On 28 June 2010, in accordance with the terms of the guaranteed subordinated notes repayable in 2015, the fixed portion of the notes changed from 5.84% fixed coupon to LIBOR plus 1.95%.

Bank overdrafts are utilised for short-term funding and are repayable on demand.

The Group's £500m European Commercial Paper programme was introduced in March 2009 and continues to generate regular, alternative means of short-term liquidity with €50m in issue at 30 September 2010 (September 2009 - €10m), all with terms of less than 90 days.

The fair value of the short-term borrowings is not materially different from their book values.

11 Cash flow

Reconciliation of profit before tax to net cash flow from operating activities

The movement in trade and other receivables and trade and other payables excludes the impact of the gross-up of matched principal trades as permitted by IAS7 "Statement of Cash Flow". The gross-up has no impact on the cash flow or net assets of the Group. The cash flow movement in trade and other receivables includes the net movement on matched principal transactions and deposits for securities borrowed/loaned. The movement for the six months to September 2010 is an outflow of £6m (six months to September 2009 is an inflow of £15m, year to March 2010 is an inflow of £20m).

12 Contingent liabilities

(a) From time to time the Group is engaged in litigation in relation to a variety of matters. It is not possible to quantify the extent of any potential liabilities, but there are none currently expected to have a material adverse impact on the Group's consolidated results or net assets.

(b) In the normal course of business, certain Group companies enter into guarantees and indemnities to cover trading arrangements and/or the use of third party services or software.

13 Related party transactions

The nature of the various services provided to some of the Group's joint ventures and associates is similar to those for the year ended 31 March 2010 and there have been no material transactions during the period to 30 September 2010.

The basis of remuneration of key management personnel remains consistent with that disclosed in the Annual Report for the year ended 31 March 2010.

14 Exchange rates

The principal exchange rates which affect the Group, expressed in currency per £1, are shown below:

Statement of directors' responsibilities

The directors confirm that, to their best of their knowledge, these condensed set of financial statements has been prepared in accordance with IAS34 as adopted by the European Union, and that the interim management report and the condensed set of financial statements herein includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:

·; an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·; material related-party transactions in the first six months of the financial year and any material changes in the related party transactions described in the last Annual Report.

Changes in directors

The directors of ICAP plc are listed in the ICAP plc Annual Report for the year ended 31 March 2010. Changes in directors since the year end are as follows:

·; Appointments of Robert Standing and Diane Schueneman and the resignation of William Nararro, non-executive directors, on 14 July 2010.

·; Resignation of Jim McNulty, a non-executive director, on 1 October 2010.

·; Resignation of Matthew Lester, Executive and Group Finance Director, who will be leaving ICAP on 17 November 2010 and is being replaced with the appointment of Iain Torrens, previously Group Financial Controller.

By order of the board

Michael Spencer Matthew LesterGroup Chief Executive Officer Group Finance Director17 November 2010

Independent review report to ICAP plc

Introduction

We have been engaged by the Company to review the condensed consolidated interim financial information in the half yearly financial report for the six months ended 30 September 2010, which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated statement of cash flows and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial information.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated interim financial information in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information in the half-yearly financial report for the six months ended 30 September 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLPChartered AccountantsLondon

17 November 2010

Notes:

1 The maintenance and integrity of the ICAP website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the half-yearly financial report since it was initially presented on the website.

2 Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

Information for shareholders

Information on ICAP plc (Company No 3611426) can be found on the Company's website, www.icap.com.

Financial calendar

Registrar

Capita Registrars Ltd, Northern House, Woodsome Park, Fenay Bridge, Huddersfield HD8 0GA. Telephone: 0871 664 0565* or +44 800 280 2584, www.capitaregistrars.com.

Information about current holdings is available at www.icap-shares.com. Shareholders will need their investor code (account number) and postcode to view information on their own holding.

Frequent shareholder enquiries

Notifying the Company of a change of address

Shareholders should notify the Company's registrar, in writing of any change. If shares are held in joint names, the notification must be signed by the first named shareholder.

Notifying the Company of a change of name

To ensure the details of a shareholding are correct, notification of a change of name should be made in writing to Capita. A copy of any marriage certificate or change of name deed should be provided as evidence of the name change.

Dividend payments directly into bank/building society accounts

Dividends for shareholders are paid through BACS and can be paid directly into a UK bank or building society account with the tax voucher sent direct to the shareholder's registered address. A dividend mandate form is available from Capita or from its website, www.icap-shares.com, under the forms and booklets section.

Transferring ICAP shares

Transferring shares to someone else requires the completion of a stock transfer form. These forms are available by calling the ICAP shareholder helpline 0871 664 0565* or +44 800 280 2584.

Lost ICAP share certificate(s)

Shareholders who have lost their share certificate(s) or have had their certificate(s) stolen should inform Capita immediately by calling the ICAP shareholder helpline, 0871 664 0565* or +44 800 280 2584*.

Following the share split only the ICAP ordinary 10p share certificates are valid.

ShareGift

Shareholders with a small number of shares, the value of which makes it uneconomic to sell them, may wish to consider donating them to charity through ShareGift, a registered charity administered by The Orr Mackintosh Foundation. Further information about ShareGift is available at www.sharegift.org or by telephone, 020 7930 3737.

Disability helpline

For shareholders with hearing difficulties a text phone number is available, 0871 664 0532* or +44 20 8639 2062.

Depositary for ICAP plc Level 1 ADR Program

The Company has established a Level 1 American Depositary Receipt (ADR) program. The Bank of New York acts as the depositary bank for the program. ICAP's ADRs trade on the OTC market under the symbol "IAPLY" and its CUSIP number is 450936109. Each ADR represents two ordinary shares.

* Calls to this number are charged at 10p per minute plus network extras.

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ICAP plc

2 BroadgateLondon EC2M 7URUnited Kingdom

Telephone +44 20 7000 5000Facsimile +44 20 7000 5975Email [email protected] www.icap.com

Company number 3611426