TP ICAP releases steady results for the first half of 2019


TP ICAP volumes

TP ICAP plc has just released its results for the first half ended 30 June 2019. LeapRate reminds that revenue in the first three months to March 2019 of £469m was 1% higher YoY on a reported basis and 2% lower at constant exchange rates.

Financial highlights include:

Underlying:

  • Revenue of £922m (H1 2018: £910m)
  • Operating profit £158m (H1 2018: £155m)
  • Operating margin 17.1% (H1 2018: 17.0%)
  • Profit before tax £134m (H1 2018: £139m)
  • Basic EPS 19.3p (H1 2018: 19.2p)

Statutory:

  • Operating profit £107m (H1 2018: £50m)
  • Operating margin 11.6% (H1 2018: 5.5%)
  • Profit before tax £83m (H1 2018: £34m)
  • Basic EPS 11.8p (H1 2018: 2.3p)

The average number of shares used for the basic EPS calculation for the period is 560m.

Operational performance

  • A resilient performance reflecting the benefit of a diversified business portfolio and cost discipline
  • Global Broking revenue fell 6% at constant exchange rates, against a backdrop of double digit revenue declines by our largest customers
  • Energy & Commodities revenue increased by 8% at constant exchange rates benefitting from acquisitions and team hires in 2018 and more favourable market conditions in power and gas
  • Strong revenue growth of 28% in Institutional Services which has benefitted from structural market changes and new hires
  • Data & Analytics revenue continues to grow at 12% reflecting new product launches, new clients and expanding existing client relationships
  • Integration programme on track for targeted annualised synergy savings of £75m by the end of 2019

Strategic highlights

  • Further electronification of services to enhance our broking capabilities and meet clients’ evolving needs
  • Aggregation of liquidity across brands and products to give clients clearer access to best pricing and simpler workflows
  • Diversification of our customer base, range of services and geographic profile
  • Enhancing the links between our business divisions to maximise the Company’s potential

Dividend

A 5.6p per share interim dividend (2018: 5.6p) will be paid on 8 November 2019 to shareholders on the register at close of business on 4 October 2019.

Nicolas Breteau, CEO of TP ICAP plc, commented:

We have delivered a resilient performance and maintained our operating margins despite a decline in trading amongst the investment banks, and additional costs driven by increasing regulation and Brexit. At the same time we have stepped up investment in a range of new initiatives to improve client service and to promote greater hybrid and electronic trading.

As we enter the final six months of the integration program, we will achieve the £75m of synergy savings and deliver the benefits derived from offering access to the deepest OTC liquidity pools for wholesale trading alongside high levels of client service.

During my first year as CEO, I have focused the business in those areas where we provide the greatest value to our clients and have the greatest competitive advantage. We have also made considerable organisational changes, made good progress on integration, are implementing an improved risk management framework and simplifying our legal entity structure.

We have made considerable progress on our strategic planning for growth from 2020 onwards in. Our budgeting and plans for this are underway and we will update the market in the New Year.

 

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TP ICAP releases steady results for the first half of 2019

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