As expected, headline figures for TP ICAP’s (TCAP) 2019 financial year were not that impressive. On an adjusted basis – which helps to account for the final stages of the Tullett Prebon-ICAP merger – profits were flat and the operating margin dipped from 15.7 to 15.2 per cent year on year.
That was partly due to a slight decrease in global broking revenues, as a decent outing for the interdealer broker’s rates business was offset by weaker credit and equities earnings. Cost growth also outpaced the rise in the top line.
Yet it increasingly looks as though issues around business integration and earnings growth are in the rear-view mirror. Most notably, revenues are diversifying via growth in non-broking businesses such as the institutional services and data & analytics divisions, which increased 23 per cent and 15 per cent, respectively, in the period.
Analysts at Numis, which expect earnings per share of 35.4p in 2020 and 38.7p in 2021, reckon the first quarter was strong, but acknowledged that “calling Q2 and Q3 remains difficult at this stage... despite the strong strategic momentum in the business”.
| TP ICAP (TCAP) | ||||
| ORD PRICE: | 369p | MARKET VALUE: | £2.08bn | |
| TOUCH: | 368-369p | 12-MONTH HIGH: | 425p | LOW: 265p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 304p* | NET DEBT: | 9%^ | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 0.80 | 106 | 34.0 | 16.85 |
| 2016 | 0.89 | 57 | 17.8 | 16.85 |
| 2017 | 1.76 | 72 | 15.8 | 16.85 |
| 2018 | 1.76 | 62 | 5.7 | 16.85 |
| 2019 | 1.83 | 93 | 12.0 | 16.85 |
| % change | +4 | +50 | +111 | - |
| Ex-div: | 2 Apr | |||
| Payment: | 19 May | |||
| *Includes intangible assets of £1.57bn, or 279p a share. ^Includes lease liabilities of £140m | ||||
