ICAP (IAP) chief executive Michael Spencer was quick to rebuff suggestions on a media call that the company was about to sell its electronic trading platforms. As well he might: the health of these platforms was one of the few positives in a difficult set of full-year results for the interdealer broker.
The top line was seriously dented by a 12 per cent fall in revenue in its global broking business, as the stricter regulation of banks restricted trading among its key customers. It could have been worse, though: second-half trading was boosted by increased volatility triggered by the eurozone quantitative easing programme and speculation over the timing of a US rate rise.
The company's post-trade risk and information business was the only division to increase its revenue overall. Here regulation helped the company, with a drive towards transparency in the trading of over-the-counter derivatives boosting ICAP's risk management tools. Turnover in the electronic markets businesses was near flat at constant currencies, but these remain a focus of investment. The performance of the foreign exchange trading platform was enlivened by the Swiss National Bank's decision to scrap its currency cap.
Analysts at Canaccord Genuity expect adjusted EPS of 31.6p for the current financial year, up from 28.7p in 2014-15.
| ICAP (IAP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 560p | MARKET VALUE: | £3.6bn | |
| TOUCH: | 559-560p | 12-MONTH HIGH / LOW: | 573p | 339p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 43 | |
| NET ASSET VALUE: | 150p* | NET DEBT: | 7% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.74 | 233 | 28.1 | 30 |
| 2012 | 1.68 | 217 | 21.1 | 22 |
| 2013 | 1.47 | 66 | 6.7 | 22 |
| 2014 | 1.38 | 121 | 15.7 | 22 |
| 2015 | 1.28 | 95 | 13.0 | 22 |
| % change | -7 | -21 | -17 | - |
Ex-div: 2 Jul Payment: 24 Jul | ||||
