Shares in Tullett Prebon rose over 5 per cent after the world's second largest inter-dealer broker reported a strong rise in half-year profits.
Once again, volatility in the world's financial markets worked in Tullett's favour. The group operates as an intermediary between banks trading in Treasury products, interest rate derivatives and fixed-income products in the so-called over-the-counter market, and trading volume was boosted by the huge increase in the issuance of government debt, notably in the US and the UK. Business also benefited from more customers using derivatives to hedge risk.
However, it has not been all plain sailing, and profits from trading in foreign exchange options, interest rate and equity derivatives were all lower. That said, the decline here was more than offset by a 47 per cent increase in revenue from fixed-income trading, principally government and corporate bonds in the US and Europe. Looking ahead, the group believes that the high levels of volatility seen in the second half of 2008 are unlikely to be repeated this year, but chief executive Terry Smith indicated that future income could be boosted by expansion into developing markets.
Broker Panmure Gordon expects full-year EPS of 44.4p (from 46.7p in 2008).
| TULLETT PREBON (TLPR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 379p | MARKET VALUE: | £815m | |
| TOUCH: | 378-379p | 12-MONTH HIGH: | 484p | LOW: 105p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 119p* | NET DEBT: | 17% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 468 | 74.5 | 22.6 | 4.75 |
| 2009 | 518 | 91.7 | 28.1 | 5.00 |
| % change | +11 | +23 | +24 | +5 |
Ex-div: 28 Oct Payment: 19 Nov *Includes intangible assets of £388m, or 180p a share | ||||
