ICAP Tumbles After Saying Full-Year Earnings Will Be LowerLiam Vaughan
ICAP Plc, the world’s largest broker of transactions between banks, fell the most in more than four months in London after indicating it expects full-year profit to be about 21 percent lower this year.
Pretax profit will be about 280 million pounds ($424 million), the low end of a range the company gave a month ago, London-based ICAP said in a statement today. That compares with about 354 million pounds in the year-earlier period. Revenue for the year through March will probably be 13 percent lower than the previous year, it said.
“While we had a better start to the fourth quarter, we are not yet seeing a sustained upturn, with market activity remaining fragile and unpredictable,” Chief Executive Officer Michael Spencer said in the statement. The “increased activity levels seen in January and February have not continued at the same rate in March,” the company said.
The stock fell 6.3 percent in London, the biggest decline since Nov. 14. The shares are down 1.5 percent so far this year for a market value of about 1.95 billion pounds.
ICAP has been seeking ways to bolster earnings as the financial crisis hurt transactions on its foreign-exchange and fixed-income trading platforms. The company said it “remains on track” to achieve cost-cuts of at least 60 million pounds by the year-end.
Interdealer brokers such as ICAP act as a go-between for banks that trade bonds, stocks, currencies, energy and derivatives. They profit when prices fluctuate because more traders use the products they trade.