ICAP half year Revenues and Profits up double digits, EBS flat


Markets operator and provider of post trade risk mitigation and information services ICAP plc (LON:IAP) has announced its results for the six months ended 30 September 2016.

  • The transaction with Tullett Prebon has received FCA clearance and remains on track to complete this year, subject to outstanding change of control consents
  • Group revenue from continuing operations increased by 11%, and was flat on a constant currency basis
  • Trading profit before tax from continuing operations decreased 7% to £51 million
    Profit before tax from continuing operations increased 78% to £66 million
  • Signed three year $65 million deal with China Foreign Exchange Trade System (CFETS) to deliver technology for electronic execution services
  • Market share gains in trading activity on Electronic Markets in US Treasuries, Asian NDFs and FX Forwards
  • Added ENSO Financial Analytics (ENSO) and Abide Financial to the Group, complementing our ability to support customers across the transaction lifecycle
  • ICAP’s global hybrid voice broking and information business’s trading profit before tax for the period increased 28% to £59 million; trading profit margin increased by 2 percentage points to 14%
  • Interim dividend payment to shareholders maintained at 6.6p per share

Electronic Markets

For the six months ended September 30, 2016, Electronic Markets revenue decreased by 2% on a constant currency basis and increased by 8% on a reported basis to £139 million (H1 2016/16 – £129 million) as a result of its dollar exposure. The trading operating profit decreased to £43 million (H1 2015/16 – £44 million) and the trading operating profit margin decreased to 31%.

BrokerTec’s revenue for the six months ended September 30, 2016 was flat on a constant currency basis and increased by 9% on a reported basis to £70 million (H1 2015/16 – £64 million) as a result of the platform’s dollar exposure. This performance reflects a 10% decrease in US Treasury average daily volume to $154 billion, a 1% increase in US repo to $213 billion and a 3% decrease in European repo to €173 billion. The revenue impact was partly offset by BrokerTec’s tariff structure which provides for volume-based tiered pricing.

Michael Spencer, Group Chief Executive Officer, commented:

Michael Spencer
Michael Spencer

Throughout ICAP’s 30 year history, we have always prided ourselves on being forward thinking for the benefit of our customers. Our strategic advantage lies in our unique networks, our strong product pipeline and our compelling value proposition. That is why we recently won the CFETS mandate and we continue to see market share gains at BrokerTec and EBS Direct. We have recently added both ENSO and Abide to the Group, complementing our ability to support our customers across the transaction lifecycle.

These are uncertain times for global financial markets as we try to understand the impact of both the Brexit vote and the very recent US election. Despite this uncertainty, it is important that we continue to invest wisely in our product portfolio and financial technology incubator, Euclid Opportunities, to achieve long term profitable growth. In the absence of unforeseen circumstances, we plan to hold the dividend at 22.0p for this year.

I am excited to be in the final phase of the Transaction before the launch of NEX Group plc. We are pleased that the FCA has recently cleared the Transaction with Tullett Prebon. We remain optimistic that the Transaction will complete by the end of the year, however the Transaction requires other change of control consents to be received before completion can occur. Tullett Prebon is responsible for and working to secure those outstanding clearances.

While we continue along the slow journey to more normal market conditions I am confident that the fundamental strengths of the business will provide an excellent platform for NEX Group plc’s long term growth and success.

To see the complete report, click here.

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ICAP half year Revenues and Profits up double digits, EBS flat

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