TP ICAP turns the page

On the face of it, these were not stellar numbers. Exclude acquisition, disposal and integration costs, and underlying profits and margins were essentially flat year on year. The core global broking segment – which continues to operate under the separate Tullett Prebon and ICAP brands – was hit by both geopolitical and monetary policy uncertainty, and depressed activity for interest rate products.

Consequently, revenues at constant exchange rates dropped 6 per cent to £648m. That has prompted another push to reduce front and back office costs, which one imagines might focus on total broker compensation. Yet the latter rose 2.5 per cent year on year, despite a fall in both average headcount and an unchanged average contribution per broker.

However, the balance of the business looks in better shape. Product diversification and bolt-on acquisitions pushed up turnover in the energy and commodities division by 8 per cent. A shift to large hedge funds helped institutional services turnover to climb 28 per cent. And the data analytics business – take note, LSE – cemented its position as the leading provider of over-the-counter pricing data globally. The ICAP deal is also set to complete in the next six months, providing further savings to re-invest in technology and new service lines.

Analysts at Numis forecast earnings of 29.2p a share this year, rising to 32.7p in 2020.