TIDMIAP
RNS Number : 0082A
ICAP PLC
01 October 2009
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Press Release
ICAP plc Trading Statement
London - 1 October 2009. ICAP plc (IAP.L), the world's premier interdealer
broker, announces the following trading update ahead of the close period
following its financial half year ended 30 September 2009. ICAP expects to
announce its results for the half-year ended 30 September 2009 on 17 November
2009.
Commenting on the half year and outlook, Michael Spencer, Chief Executive of
ICAP, said "We made a solid start to the year across many markets ahead of
a pronounced seasonal slowdown during the summer. Higher market activity levels
have now returned. Group revenue is expected to increase by approximately 6% in
the half year ended 30 September 2009 compared with the same period in the
previous year.
Our business is broadly diversified; many of the markets in which we operate are
benefiting from the continuing low short-term interest rates, steep yield curves
and substantial corporate and government bond issuance. Both credit and equity
derivatives have experienced more difficult conditions. Overall activity levels
in commodities have remained strong. In electronic broking, markets have been
quieter than the very active conditions a year ago; cost reductions and other
measures have helped to hold margins. Higher volumes are being reported across
the post-trade service business.
Our investment is continuing in new organic initiatives to support the long-term
growth of this business and in IT to further enhance the existing competitive
advantage of our electronic broking platforms. Revenues from these
initiatives continue to grow and are expected to show further growth in the next
six months, but the increase in voice broking's portion of the overall business
will be reflected in the Group margin this financial year. However, in the
current environment they represent an excellent opportunity to accelerate the
development of our business. The Group continues to be highly cash generative
to support these investments and benefits from a strong balance sheet.
The cost reduction programme to bring costs down by a further GBP23 million in
2009/10 has been completed. These savings partially offset the investment in our
focus areas, many of which are still in their development phase.
As a result of the continued investment in new business and the change in the
mix of our revenues, profit before tax, amortisation and impairment of
intangibles arising on consolidation and exceptional items in the half-year 30
September 2009 is expected to be slightly lower than the same period in the
previous year.
The debate about strengthening financial regulation, supervision and market
infrastructure and ensuring efficient, safe and sound OTC derivatives markets is
continuing. Both the US and European authorities recognise that competition
between different regulated trading venues in the OTC derivatives markets
increases market efficiency. The merits of clearing of OTC derivatives are well
established and headway has been made to ensure non-discriminatory access
between competing trading venues.
We expect our electronic broking businesses will be substantial beneficiaries of
a shift to more efficient and transparent markets arising from increased
electronic trading and clearing of standardised contracts. Demand for
improvements in market infrastructure will continue to provide
major opportunities for our expanding post-trade service business. Voice broking
will continue to be required for less liquid products which are unsuitable for
electronic broking and clearing. It is the range, depth and value of these
opportunities which underpins our significant investment spend in the business.
After continuing to invest significantly in the future growth of the business,
profit before tax, amortisation and impairment of intangibles arising on
consolidation and exceptional items for the financial year ending 31 March 2010
is anticipated to be in line with current analysts' expectations, assuming that
exchange rates remain at today's levels for the remainder of the financial
year."
Notes
1. The current forecasts for ICAP plc pre-tax profits referred to in this
announcement are based on forecasts of profit before tax, amortisation and
impairment of intangibles arising on consolidation and exceptional items
provided by 11 equity analysts. The range of those forecasts for the year to
March 2010 is from GBP309 million to GBP354 million. This compares with the
results for the year to March 2009 when ICAP plc's profit before tax,
amortisation and impairment of intangibles arising on consolidation and
exceptional items increased by 5% to GBP346 million. The source of these
forecasts is Bloomberg, Reuters and the analysts.
2. 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 forward-looking statements.
________________________________________________________________________________
Contacts:
+--------------------------------------+--------------------------------------+--------------------------------------+
| Michael Spencer | Group Chief Executive | +44 (0) 20 7050 7400 |
+--------------------------------------+--------------------------------------+--------------------------------------+
| Mike Sheard | Director of Corporate Affairs | +44 (0) 20 7050 7103 |
+--------------------------------------+--------------------------------------+--------------------------------------+
| Neil Bennett | Maitland | +44 (0) 20 7379 5151 |
+--------------------------------------+--------------------------------------+--------------------------------------+
About ICAP: ICAP is the world's premier voice and electronic interdealer broker
and provider of post trade services. The Group delivers specialist intermediary
broking services to trading professionals in the wholesale financial markets.
ICAP covers a very broad range of OTC (over-the-counter) financial products and
services in commodities, foreign exchange, interest rate, credit and equity
markets. ICAP plc was added to the FTSE 100 Index on 30 June 2006. For more
information go to www.icap.com
This information is provided by RNS
The company news service from the London Stock Exchange
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