To say TP Icap’s (TCAP) integration of the voice broking acquisition has not gone smoothly would be an understatement. After the annual synergy target was reduced by a quarter to £75m last month, management revealed it had secured £65m in run-rate savings and should achieve the remainder by the end of 2019. However, the cost of the integration was £101m during the first half and management expects to incur a further £60m by the end of next year, which will be recognised as exceptional charges over the next 18 months.
Revenue was 3 per cent to the good at constant exchange rates, driven by a 5 per cent rise in global broking sales to £672m on the same basis. Rates trading benefited from rising volatility on the back of increases in the US federal funds rate, the end of European Central Bank quantitative easing, and the Italian election. However, credit markets continued to suffer from a lack of new issuance, causing an 8 per cent decline in sales there. The energy and commodities business also recorded a 3 per cent dip in sales to £167m, due to weaker US energy markets and lower coal and iron ore revenues.
Analysts at Numis expected adjusted pre-tax profits of £245m for the year to December 2018, giving EPS of 34.3p (£232m and 32.5p in 2017).
| TP ICAP (TCAP) | ||||
| ORD PRICE: | 290.2p | MARKET VALUE: | £ 1.63bn | |
| TOUCH: | 290.1-290.2p | 12-MONTH HIGH: | 561p | LOW: 246p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 318p* | NET DEBT: | 4% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 925 | 71 | 10.3 | 5.6 |
| 2018 | 910 | 34 | 2.3 | 5.6 |
| % change | -2 | -52 | -78 | |
| Ex-div: | 04 Oct | |||
| Payment: | 09 Nov | |||
| *Includes intangible assets of £1.65bn, or 293p a share | ||||
