TP ICAP numbers strong as integration continues

Revenue at TP ICAP jumped to £925m from £828m on an underlying basis year-on-year in its first half, it reported on Tuesday, while operating profit improved to £144m from £117m.

The FTSE 250 company said its operating margin during the six months to 30 June was 15.6%, improving from 14.1% in the first half of last year, while its underlying profit before tax was £129m, rising from £111m.

It confirmed basic earnings per share were 18.3p, compared to 16.1p in the first half of 2016.

On a statutory basis, it reported operating profit of £86m, with an operating margin of 9.3% and profit before tax of £71m, and basic earnings per share of 10.3p.

“The first six months of 2017 marked the beginning of our journey as TP ICAP and I'm pleased to note that our integration is fully under way and progressing to plan,” said chief executive John Phizackerley.

“The group has delivered a solid set of results and a resilient performance throughout the first half, despite a mixed environment.”

On the operational front, TP ICAP’s board reported “strong” performance in its rates business, while energy and commodities was buoyed by growth in oil despite the “challenging” power and commodities markets.

The company made further investment in regulatory, governance and strategic initiatives during the half, the board said, while its average revenue per broker improved in all regions.

“We are focused on meeting our integration and synergy targets as we harmonise and simplify our systems, processes and structures,” Phizackerley explained.

“We continue to build and diversify our global presence and use our enhanced technological capabilities and data to develop and deploy new products across the group.”

When it comes to the ongoing integration of the business, which was formed late last year from the previous firms Tullett Prebon and ICAP, the board said “good progress” was made during the period.

It reported £8m in synergy savings had been delivered during the half, which was ahead of schedule, along with a headcount reduction of 175 in the six months.

A new, “streamlined” management team was now in place, the board confirmed, and the rationalisation of real estate was now underway.

“Looking ahead to the rest of the year, although short-term uncertainty remains, we are confident that our clear strategy and focus on operational excellence will ensure we remain well-positioned for future growth,” added John Phizackerley.

“We intend to build on our position as the world's largest interdealer broker and most trusted source of liquidity in the OTC markets, consistently delivering the very best for all our stakeholders.”

The board declared a 5.6p per share interim dividend, which will be paid on 10 November to shareholders on the register at close of business on 13 October.