Tullett First-Half Profit Declines on Weaker Trading Revenue
Tullett Prebon Plc (TLPR), a London-based inter-dealer broker, said first-half profit fell 5.4 percent after a drop in revenue from trading in foreign exchange and bonds.
Underlying pretax profit in the six months to June 30 slipped to 62.8 million pounds ($96 million) from 66.4 million pounds a year earlier, the company said in a statement today. Revenue fell to 439.8 million pounds from 455.1 million pounds. It will pay an interim dividend of 5.6 pence a share.
“Activity in the financial markets has been subdued for the last twelve months,” Chief Executive Officer Terry Smith said in the statement. “There was some pick-up in the level of activity toward the end of the first half, but it would be prudent to expect that market conditions will continue to be challenging.”
Inter-dealer brokers such as Tullett and ICAP Plc (IAP) act as a go-between for banks that trade bonds, stocks, currencies, energy and derivatives. Profits have been squeezed as regulators push more trading onto exchanges and financial markets remain subdued during the sovereign debt crisis.
Revenue from treasury products, which includes currency and money markets, fell to 115.4 million pounds from 121.4 million pounds a year ago, reflecting a drop in trading FX forwards such as in Asia, the company said. Fixed income revenues also declined as banks reduced activity in corporate bonds.
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