Tullett Prebon Plc, the London-based interdealer broker run by Terry Smith, reported a loss as it wrote down the value of its U.S. operations and “challenging” markets weighed on revenue.
The 59 million-pound ($89.2 million) loss for 2012 compared with a profit of 89.4 million pounds in the year-earlier period, as revenue shrank 6.5 percent to 850 million pounds, the company said in a statement today. The firm took a 123 million-pound goodwill charge on its U.S. unit after rival interdealer broker BGC Partners Inc. poached a number of its employees in the country four years ago.
“Despite the action that has been taken to rebuild the scale of the North American business since the raid in the second half of 2009, and to reduce costs, its performance weakened further during 2012,” Tullett said in the statement. Legal action continues to be pursued against BGC and former employees, it said.
Inter-dealer brokers such as Tullett act as a go-between for banks that trade bonds, stocks, currencies, energy and derivatives. They typically handle more trades between banks during periods of greater market volatility.
The company also said it expects spending on regulatory compliance will more than offset its cost-cutting program, and that revenue for the first two months of 2013 is 5 percent lower than it was a year earlier.
Tullett, which split off from U.K. stockbroker Collins Stewart in 2006, competes against ICAP Plc, the biggest broker of transactions between banks.