TP ICAP releases steady results in H1 2018


TP ICAP volumes

TP ICAP plc has announced its results for the six months ended 30 June 2018.

Business highlights

  • Solid performance achieved from our diversified business portfolio
  • Revenues of £910m, 2% lower than H1 2017 at actual exchange rates and 3% higher at constant exchange rates
  • Strong performance in Global Broking’s Rates and Equities businesses, with revenues up 7% and 20% compared to the previous half year at constant exchange rates
  • Energy & Commodities continues to benefit from our strong position in oil despite challenging power and commodities markets in the US
  • Total broking contribution increased by 5% to £325m (H1 2017: £309m) at constant exchange rates

Strategic outlook

  • A rebased integration programme that balances cost efficiency with the requirement to invest in people and technology to deliver growth
  • £13m of synergy savings achieved in the period taking the cumulative run rate to £65m, and a target of £10m to achieve by the completion of the programme at end of 2019
  • Accelerating our investment in the Data & Analytics business
  • Reaffirming our commitment to develop our buyside business at a more realistic pace

Financial highlights

Underlying (before acquisition, disposal and integration costs, and exceptional items)

  • Revenue of £910m (2017: £925m)
  • Operating profit £155m (2017: £144m)
  • Operating margin 17.0% (2017: 15.6%)
  • Profit before tax £139m (2017: £129m)
  • Basic EPS 19.2p (2017: 18.3p)

Statutory (after acquisition, disposal and integration costs, and exceptional items)

  • Operating profit of £50m (2017: £86m) after a £58m goodwill impairment charge
  • Operating margin 5.5% (2017: 9.3%)
  • Profit before tax £34m (2017: £71m)
  • Basic EPS 2.3p (2017: 10.3p)

The average number of shares used for the basic EPS calculation for the period is 556.3m.

Dividend

A 5.6p per share interim dividend (2017: 5.6p) will be paid on 9 November 2018 to shareholders on the register at close of business on 5 October 2018.

The company has previously said that the dividend will remain at 16.85p throughout the integration period. Our dividend policy remains unchanged.

Outlook

Commenting on the results, Nicolas Breteau, Chief Executive of TP ICAP plc, said:

I am pleased to report my first set of interim numbers. We now have a clear view of the integration plan and cost base challenges and have recently updated the market with changed synergy targets and cost expectations, which I am confident we can deliver.

There remains much work to be done in fully harmonising support and operational functions to establish a strong platform for growth. From 2020 onwards we will start to benefit from the organic investments we are making in the business.

TP ICAP is a business with strong fundamentals. I am looking forward to driving the business forward, building a robust and sustainable business for the future and capitalising on our leading position in the interdealer broking market.

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TP ICAP releases steady results in H1 2018

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