Tullett Prebon, the world's second largest inter-dealer broker, pushed profits ahead last year, despite lower volatility levels. Acting as an intermediary between banks trading in Treasury products, derivatives and fixed income products in the over-the-counter (OTC) market, the group was up against some testing comparatives - that included the period following the collapse of Lehman Brothers.
Chief executive Terry Smith reckons that volatility levels have now returned to more normal levels and he concedes that income in the first two months of 2010 is running around 5 per cent down from a year ago, a trend he expects to reverse in the second half. Meanwhile, the group is a hostage to ongoing discussions about the possibility of bringing OTC transactions under greater regulatory control.
Meanwhile, the broader trading picture demonstrated a much tougher environment. The US side was hit by the resignation of 77 brokers who defected to a rival organisation and, while group turnover showed a nominal rise, this was flattered by sterling's weakness against the dollar. In fact, on a constant currency basis, operating profits fell 11 per cent.
Numis Securities expects pre-tax profits to fall to £134.8m for 2010, giving EPS of 41.4p (2009: £156.7m/48.1p).
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| TULLETT PREBON (TLPR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 309p | MARKET VALUE: | £ 665m | |
| TOUCH: | 309-310p | 12-MONTH HIGH: | 436p | LOW: 133p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 144p* | NET CASH: | £9m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 654 | 125 | 39.7 | 11.0 |
| 2007 | 754 | 114 | 34.7 | 12.0 |
| 2008 | 944 | 137 | 44.4 | 12.8 |
| 2009 | 948 | 157 | 51.8 | 15.0 |
| % change | - | +15 | +17 | +18 |
Ex-div:28 Apr Payment:20 May *Includes intangible assets of £381m or 177p a share | ||||
