ICAP sees EBS revenues rise in H1 2015/16

A busy day for ICAP plc (LON:IAP)…

Along with an announcement of a deal that will see it sell its Global Broking and associated information business to Tullett Prebon, ICAP posted its financial report for the six months to September 30, 2015.

Total revenues for the period were £595 million ($899m), down 4% from the equivalent period a year earlier, with the results of the Global Broking division weighing on the overall performance. The division posted a 14% drop in revenues.

Electronic Markets, however, performed much better, posting a rise in revenues during the first half of fiscal year 2015/16.

EBS, an electronic FX business, saw revenue increase by 7% on a constant currency basis and by 14% on a reported basis to £64 million in the six months ended 30 September 2015, reflecting a 15% increase in average daily volumes to $94 billion.

BrokerTec, a global electronic platform for the trading of US Treasuries, European government bonds and US and European repos, saw revenue decrease by 3% on a constant currency basis and increase by 3% on a reported basis to £64 million (H1 2014/15 – £62 million) as a result of the platform’s dollar exposure.

The Group reported a trading operating profit of £110 million, up 10% year on year.

The Group’s trading operating profit margin widened to 19% (H1 2014/15 – 16%).

The proportion of the Group’s trading operating profit generated from the Electronic Markets and Post Trade Risk and Information divisions was 77%.

Profit before tax for the period was £83 million (H1 2014/15 – £36 million), reflecting a £10 million decrease in acquisition and disposal costs and £22 million of exceptional items recognised in the prior year.

Basic EPS increased by 167% to 12.0p.

Below is the report for the Electronic Markets division:



An interim dividend of 6.60p per share (H1 2014/15 – 6.60p per share) covering the six month period to 30 September 2015 will be paid on 5 February 2016 to shareholders on the register at 8 January 2016.

Management comments

Michael Spencer, Group Chief Executive Officer, said:

“We have continued to make progress against our strategic priorities. Our first half performance benefited from the investment we have made in our people, technology and products, and we’ve made good progress with new business initiatives. It’s been an active six months during which EBS BrokerTec significantly increased FX volume in Asian emerging market currencies, strong revenue growth continued at TriOptima driven by demand for risk reduction and reconciliation services, and Euclid made further strategic investments.

“Since our Q1 trading update low levels of volatility have continued in both rates and G7 currencies, risk appetite remains subdued and the timing of any interest rate moves remains uncertain. Despite this challenging backdrop, we remain well positioned to benefit from any future improvement in trading conditions.

“Today we announced that we have agreed terms to sell our Global Broking and associated information services business to Tullett Prebon. This compelling opportunity will create a significant value for ICAP shareholders and represents a step change in transforming ICAP into a focused electronic and post trade services Group.”

To view the full announcement from ICAP on its financial metrics, click here.

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