After adding back £60m of exceptional items, as well as £157m relating to impairment and amortisation costs, interdealer broker ICAP's (IAP) adjusted full-year pre-tax profit fell 20 per cent year on year to £284m. That was largely in line with analysts' expectations and a relief rally boosted the shares by 6 per cent on the day these figures appeared. However, the final dividend was cut 4 per cent on last year's final payout to 14.5p - leaving the total payout unchanged - and ICAP's performance is suffering amidst weak trading volumes and low interest rates.
Indeed, all three of ICAP's divisions are under pressure The global voice broking unit's operating profit slipped 31 per cent to £105m as banks reduced their trading activities in the face of the ongoing eurozone crisis and US deficit uncertainties. And while the profit margin on electronic trading business was maintained at 42 per cent, lower volumes trimmed operating profits here by 11 per cent to £113m. Post-trade risk and information revenue was flat at £207m and profits slipped 2 per cent to £90m. But annualised cost savings reached £80m - £20m ahead of expectations.
Broker Numis Securities expects adjusted pre-tax profit of £301.8m for 2014, giving EPS of 33.8p (from £284m and 33p in 2013).
| ICAP (IAP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 316p | MARKET VALUE: | £2.04bn | |
| TOUCH: | 315-316p | 12-MONTH HIGH: | 381p | LOW: 273p |
| DIVIDEND YIELD: | 7% | PE RATIO: | 47 | |
| NET ASSET VALUE: | 171p* | NET CASH: | £25m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 1.59 | 190 | 28.2 | 17.1 |
| 2010 | 1.61 | 247 | 25.5 | 17.6 |
| 2011 | 1.74 | 233 | 28.1 | 30.0 |
| 2012 | 1.68 | 217 | 21.1 | 22.0 |
| 2013 | 1.47 | 66.0 | 6.70 | 22.0 |
| % change | -13 | -70 | -68 | - |
Ex-div: 26 Jun Payment: 19 Jul *Includes intangible assets of £1.16bn, or 180p a share | ||||
