TP ICAP PLC (LON:TCAP) has reported profit and revenue growth in its first half following what the group said was a fundamental re-engineering of its operations during the pandemic lockdown.
For the six months ended June 30, the inter-dealer broker reported an underlying pre-tax profit of £136mln, up from £134mln in 2019, while revenues rose to £990mln from £922mln.
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The largest revenue growth came from the company’s Institutional Services business, where revenues jumped 50% amid increased client appetite and more capacity to service new accounts.
TP ICAP also reported 2% growth in global broking, 15% in energy & commodities and 9% in data & analytics, while the interim dividend was retained at 5.6p per share.
Looking ahead, the company said July trading activity had “slowed down and is materially lower than 2019 levels” and as a result, it maintained its guidance of low single-digit revenue growth for the full year.
Meanwhile, TP ICAP said targeted investment spending for March will be partially deferred to manage resources in response to the pandemic, saying they intended to invest £15mln in 2020.
"Against the [coronavirus] backdrop, our primary focus has been to protect the wellbeing of our staff and ensure continuity of service excellence for our clients. We achieved this by deploying new technology and workflows that enabled the majority of our staff to work from home while maintaining seamless, global client coverage”, said chief executive Nicolas Breteau.
“Despite the challenges posed by the pandemic, we have grown revenues and underlying profitability whilst advancing our strategic priorities of aggregating liquidity across our brands, increasing electronification and diversifying our revenue streams. We paid our full year dividend and have declared an interim dividend. Our performance is a testament to our operational strength, scale and diversified business portfolio, as well as the hard work and dedication of our teams”, he added.
In a note on Friday, analysts at house broker Peel Hunt reiterated their ‘buy’ rating and 420p target price on TP ICAP, saying while the shares had been “relatively weak recently, there remains the prospect of attractive shareholder returns”.
“Revenue growth has slowed from an exceptional [first quarter], but the results also show the benefit of a diverse business”, they added.
TP ICAP shares dropped 11% to 298.8p in mid-morning trading.
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