Shares in TP ICAP PLC (LSE:TCAP) fell 8% on Wednesday morning after the interdealer broker posted a set of first-half results that fell short of expectations, prompting a wave of profit-taking following a strong run in the stock.
Shore Capital described the first-half update as “disappointing”, with adjusted operating profit of $239 million (£184 million) and a margin of 15% coming in below its estimate of $248 million, despite being up 10% year-on-year in constant currency.
Earnings per share at 17.6p also missed the mark, coming in just under forecasts.
Revenue for the second quarter grew 7% in constant currency, which Shore says was broadly in line, but it wasn’t enough to offset the drag from higher costs, likely linked to UK national insurance and ongoing investment across the business.
Still, there were some bright spots. The interim dividend rose 8% to 5.2p and TP ICAP confirmed a fresh £30 million share buyback. The company also reiterated its full-year guidance, which sees adjusted EBIT at around £345 million.
Looking ahead, Shore highlighted geopolitical uncertainty as a potential support for trading volumes, but warned that a weaker dollar and tougher year-on-year comparisons could weigh on second-half results.
The broker left its forecasts unchanged for now and maintains its 'buy' rating, noting that while upside to its 330p valuation is now limited, TP ICAP still offers solid income potential through its dividend and cash generation.
The stock fell 24.5p to 282.5p.