ICAP PLC (IAP) - Trading Statement
RNS Number : 1713N
26 September 2012
ICAP plc Trading Statement
London, 26 September 2012 - ICAP plc (IAP.L), the world's leading interdealer
broker and provider of post trade risk and information services, announces its
trading update ahead of the close period for the half year ending 30 September
Activity in the global capital markets remained subdued due to the Eurozone
crisis and the well-recorded difficulties faced by the global economy.
Performance across ICAP's voice and electronic businesses has remained more
muted than anticipated at the time of the AGM in July 2012. There has been,
however, some improvement in trading volumes in September. As a result, Group
revenue in the six months ending 30 September 2012 is expected to be around
14% lower than the previous year.
The Group continues to make good progress with its structural review of
recurring costs, and is on schedule to deliver at least £50 million per annum
of run-rate savings by the end of the current financial year.
Notwithstanding the more recent pick up in volumes, activity levels remain
difficult to predict and it is not yet clear whether signs of improved
confidence are sustainable. Due to the successful cost reduction programme,
the Group anticipates that if volumes in the second half remain at current
depressed levels, then pre-tax profits^1 for the year to 31 March 2013 will be
within the current analyst range of £307 million to £346 million.
ICAP's voice division was reorganised in August to create a single, global
voice broking division which was renamed Global Broking. This will enable the
Group to execute a more globalised strategy for broking services. Global
Broking activity has been slow, in part due to the London Olympics and the
ensuing extended holiday season.
In September, EBS, ICAP's leading electronic foreign exchange platform,
announced system and policy changes following extensive consultation with its
customers to improve the performance of the platform. EBS's performance has
been impacted by a decrease in volumes across the FX market and by two of its
main currencies, the Swiss Franc and Japanese Yen, being subject to
intervention, which has resulted in significantly decreased volatility.
Overall volumes on BrokerTec, ICAP's leading fixed income platform, have also
been affected by low rates and a flat yield curve. BrokerTec has, however,
seen an improvement in its market share following the recent significant
upgrade to the platform. ICAP's electronic platform for euro interest rate
swaps, i-Swap, saw a substantial increase in activity towards the end of the
first half and continues to maintain its market leading position.
Overall demand for ICAP's post trade, risk mitigation and information products
and services remained solid. Traiana, in particular, saw very strong
double-digit revenue growth.
Commenting on the first half and outlook, Michael Spencer, Group Chief
Executive Officer of ICAP, said: "The macroeconomic environment remains
difficult and it's too early to judge if recent actions by the Federal Reserve
and the European Central Bank will result in a sustained improvement in market
confidence. In any event, we will continue to take the necessary action to
constrain our cost base as well as position ICAP optimally for upcoming
financial regulatory reform."
"We have a strong balance sheet and continue to convert profit very
efficiently into cash. Our diversified business, together with multiple
initiatives in our electronic and post trade businesses, will ensure that we
benefit from regulatory and market changes and build on our position as the
1. Profit is defined as pre-tax profits from continuing operations excluding
acquisition and disposal costs and exceptional items.
2. ICAP expects to publish its results for the half-year ending 30 September
2012 on 14 November 2012.
3. This document contains forward-looking statements with respect to the
financial condition, results and business of ICAP plc. By their nature,
forward looking statements involve risk and uncertainty and there may be
subsequent variations to estimates. ICAP plc's actual future results may
differ materially from the results expressed or implied in these
A conference call for analysts and investors will be held at 8.15am on 26
September 2012 to discuss this statement. To dial in, please call +44 (0) 20
3003 2666. The access password is ICAP.
Brigitte Trafford Director of Corporate Affairs +44 (0) 20 7050 7103
Alex Dee Head of Investor Relations +44 (0) 20 7050 7123
Neil Bennett Maitland +44 (0) 20 7379 5151
This information is provided by RNS
The company news service from the London Stock Exchange
TSTEQLBLLKFZBBX -0- Sep/26/2012 06:01 GMT
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