The knives have been out at Tullett Prebon (TLPR). Last year the interdealer broker posted underlying operating profit of £101m, a 13 per cent decline on 2013, as historically low interest rates continue to reduce traffic in fixed income and currency trades. Management had little choice but to cut fixed costs in response.
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The broker vacated office space and culled 166 front-office staff, in addition to 51 ancillary workers. These measures will reduce annual costs by around £45m, an estimated three-quarters of which will flow through into operating profits. The full benefits of the rationalisation have yet to emerge, but last year it helped keep the operating margin broadly flat at 14.3 per cent (from 14.4 per cent in 2013).