TP ICAP (LSE:TCAP) reported strong revenue growth for the third quarter as the crisis created by soaring energy prices led to higher trading volumes.
Revenues from its energy trading business rose 16% to £92mln in the three months to September 30 as energy market price volatility “provided client trading opportunities”, the FTSE-250 broker said in a trading statement.
The company cautioned that the acquisition of Liquidnet, the dark pool trader bought for US$700mln earlier this year, will generate full-year revenue at the lower end of the £160mln-£180mln range previously forecast due to lower equity market volumes globally during October.
TP ICAP said total broking revenues grew by 20% to £447mln in the third quarter and were 5% higher at £1.38bn in the first nine months of 2021.
The company said it expects full-year revenues to be in line with last year.
"TP ICAP capitalised on improved operating conditions during the third quarter compared with the same period last year, due to increased volatility and higher secondary trading volumes. This resulted in revenue growth across all our divisions, with particular strength in Energy & Commodities,” said chief executive Nicolas Breteau in a trading statement.
“These favourable trends continued through October 2021 and we continue to anticipate full-year revenue for the group, excluding Liquidnet, to be broadly in line with 2020 on a constant currency basis."
Revenues at the global broking business increased by 2% in the third quarter, driven by a good performance in equities, but partially offset by a weaker performance in rates. In the first nine months, revenues from global broking were 4% lower at £827mln.
TP ICAP’s agency execution revenue increased by 353% largely due to the inclusion of Liquidnet. Excluding Liquidnet, agency execution revenue increased by 13%.
Shares fell almost 6% to 147.78p in late morning trade.