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Prices & Quotes - UK Markets - TP Icap Group (TCAP)

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Share Price:
Down 131.18p
Change Today:
-6.32p
Market Cap:
1,034.58m
Sector:
Financial Services

TP Icap revenues fall amid quieter first-half markets

By Josh White

Date: Tuesday 03 Aug 2021

LONDON (ShareCast) - (Sharecast News) - TP Icap reported a 1% fall in first-half revenue in a trading update on Tuesday, to 936m on a constant currency basis, with revenue declining 5% on a reported basis.
The FTSE 250 company said the revenue decline reflected quieter markets compared with the "extraordinary volumes" seen in March 2020.

Excluding Liquidnet's revenue of 55m, revenue in the period was 7% lower than the prior year on a constant currency basis, and 11% lower on a reported basis.

The company said its global broking divisional revenue declined 7% compared with the prior year on a constant currency basis, in an environment where wholesale market activity in the first half was "generally subdued" compared with 2020.

Performance for the period was in line with market activity, and the firm said it maintained its "industry-leading" market share.

Across rates, credit and foreign exchange, TP Icap said it made "substantial progress" in advancing iots hub strategy to "electronify" its platforms and aggregate liquidity across its brands.

In the energy and commodities division, revenue was down 9% on a constant currency basis, with the strong prior-year period characterised by the record pandemic-driven oil trading volumes of the first quarter.

Over the period, energy markets were less active than in the same period in 2020, with TP Icap noting that the cadence of energy-related trading activity followed a similar pattern to most financial asset classes, with "robust" first-quarter volumes followed by a weaker second quarter.

Agency execution revenue leapt 84% in the period on a constant currency basis, largely due to the inclusion of Liquidnet.

Following its acquisition on 23 March, TP Icap said Liquidnet contributed revenue of 55m in the first half.

The board said the process to integrate Liquidnet into the group was progressing "well", adding that it had advanced its plans to realise new revenue streams for equities and credit, increased its marketing of the business in continental Europe, and identified cost synergies.

In Parameta Solutions, the data and analytics business achieved double-digit revenue growth of 11% on a constant currency basis, as it continued to benefit from its strategy to launch new and higher-value products, expand distribution channels and "deepen and diversify" its client relationships.

Post-trade solutions revenues declined 17% on a constant currency basis due to lower market-wide volumes, and overall, revenue grew 6% in the period on a constant currency basis.

Given the subdued trading conditions in the first half, as well as continuing uncertainty caused by quiet markets and the disruption from the Covid-19 pandemic, TP Icap said it expected full-year revenue for the group, excluding Liquidnet, to be broadly in line with 2020 on a constant currency basis.

It reiterated its guidance on investment spending on its organic strategy, and noted that sterling-dollar year-on-year appreciation was acting as a headwind against its reported revenues and operating margin.

The foreign exchange impact and investment spending on organic strategy and Liquidnet were expected to have an adverse impact on its operating margin as well.

"Our revenue performance reflects challenging trading conditions caused by the combination of very quiet secondary markets and the ongoing disruption from Covid-19," said chief executive officer Nicolas Breteau.

"Against this market backdrop, we have focused on those areas that we can control: namely, executing on our strategy and managing costs.

"In terms of corporate development, this has been a busy and successful period."

Breteau noted that in February, the company completed the redomicile of its holding company from the UK to Jersey, and realised tangible capital benefits as a result.

"We also completed the Liquidnet acquisition in March and the subsequent integration is successfully progressing at pace.

"We have continued to execute our organic strategy to electronify our business to improve margins over time, connect clients with liquidity more efficiently and diversify our revenue mix.

"In addition, we have continued to innovate, going live with a new fully-automated Spot FX matching platform and announcing the launch of a pioneering wholesale trading platform for spot crypto-assets."

TP Icap said it would report its 2021 interim results on 7 September.

At 0843 BST, shares in TP Icap were down 3.73% at 192.54p.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

 

TP Icap Group Market Data

Currency UK Pounds
Price 131.18p
Change Today -6.32p
52 Week High 262.50p
52 Week Low 130.77p
Volume 1,172,985
Shares Issued 788.67m
Market Cap 1,034.58m
Beta 1.07

Performance Indicators

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What The Brokers Say

Strong Buy 5
Buy 0
Neutral 1
Sell 0
Strong Sell 0
Total 6
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

TP Icap Group Dividends

  Latest Previous
  Interim Final
Ex-Div 30-Sep-21 08-Apr-21
Paid 05-Nov-21 18-May-21
Amount 4.00p 2.00p

Trades for 26-Nov-2021

Time Volume / Share Price
16:00 5,671 @ 132.10p
16:49 20,622 @ 131.18p
16:35 267,161 @ 131.18p
16:29 102 @ 131.54p
16:29 750 @ 131.40p

TP Icap Group Key Personnel

CEO Nicolas Breteau
CFO Robin Stewart
Chair Richard Berliand