Revenue from Information Sales and Risk Management Services was 17% higher than last year. The Information Sales business has benefited from the growing client demand for independent data and for enhanced validation of information sources, and has increased revenue by adding new data content sets and through broadening its customer base, with an increasing number of information feeds to client IT applications. The investment in sales and marketing in the Risk Management Services business has resulted in increased market share in USD and Asia Pacific currencies.

Revenue from Treasury Products (FX and cash) was 3% lower, with lower activity in Europe and some products in Asia Pacific partly offset by a stronger performance in the Americas.

Revenue from Interest Rate Derivatives (swaps and options) was 6% higher than last year, reflecting the sporadic volatility in interest rates in Europe during the period and improved market conditions for JPY products in Asia Pacific.

The 11% decline in revenue from Fixed Income reflects the low liquidity and levels of activity in the European government and corporate bond markets, and in the North American government and agency bond markets, partly offset by higher revenue in corporate bonds in North America including that generated by the brokers hired from Murphy & Durieu at the beginning of the year.

The Equities businesses in Europe and the Americas both performed well during the period but this was offset by lower activity in equity derivatives in Asia Pacific reflecting lower levels of client trading.

 
 Revenue by region             H1 2015   H1 2014   Change   Change 
                                  GBPm      GBPm    Incl.    Excl. 
                                                      PVM      PVM 
 
 Europe and the Middle East      241.9     208.1     +16%      -4% 
 Americas                        117.9     110.9      +6%      +1% 
 Asia Pacific                     55.9      49.7     +12%      +5% 
 At constant exchange rates      415.7     368.7     +13%      -1% 
 Exchange translation                      (8.4) 
 Reported                        415.7     360.3     +15%      +1% 
                              ========  ========  =======  ======= 
 

Europe and the Middle East

Revenue in Europe and the Middle East was 16% higher including PVM, and was 4% lower excluding PVM. The base broking revenue in the region was 6% lower than last year, partly offset by growth in revenue from Information Sales.

The region continues to face difficult market conditions in many of the traditional major product areas. Revenue from forward FX and cash, and from government and corporate bonds, which account for a significant proportion of the revenue in the region, was lower than last year. This was partly offset by higher revenue in Interest Rate Derivatives reflecting the sporadic volatility in interest rates in Europe during the period, and by higher revenue from Energy and commodities, particularly in oil and from the development of our activities in base and precious metals. The Equities business has also performed well compared with a difficult period in the first half of 2014.

Including PVM, Energy is the largest product group by revenue in the region, and accounts for over one third of the region's broking revenue in the first half.

Average broker headcount in the region, excluding PVM, was 7% lower than last year with average revenue per broker up 1%. Period end broker headcount, including PVM, was 831.

Americas

Revenue in the Americas was 6% higher including PVM and was 1% higher excluding PVM.

Revenue in the product areas where the business is particularly dependent on serving the traditional interdealer broker client base, most notably Interest Rate Derivatives and government and agency Fixed Income, was lower than last year reflecting the lower level of market activity. This was offset by higher revenue in Treasury products (FX and cash), particularly in emerging markets' currencies, by the further development of the business's presence in corporate bonds through the addition of brokers from Murphy & Durieu at the beginning of the year, and by the benefit of the investments made last year in the Equities business.

We have improved the quality of our Energy business in the Americas through our withdrawal from broking power contracts for end-users by disposing of our standalone subsidiary Unified Energy Services. We have invested in establishing our presence in emissions broking. Including PVM, our Energy activities in the Americas accounted for over 10% of the total revenue in the region, and this will be further boosted by the acquisition of MOAB.

Average broker headcount in the Americas, excluding PVM, was 6% higher than in 2014, with average revenue per broker 5% lower. Period end broker headcount in the Americas, including PVM, was 554.

Asia Pacific

Revenue in Asia Pacific was 12% higher than last year including PVM and was 5% higher excluding PVM. The growth in base broking revenue in the region was boosted by the increased revenue from the Risk Management Services business which is operated from the region.

The growth in base broking revenue has been achieved despite the slowdown in client trading in volatility products in regional currencies and in equity derivatives compared with last year, and reflects the continued development of the offshore Renminbi market, improved market conditions for JPY interest rate swaps, and the development of the Energy and commodities broking activities in the region. Including PVM, Energy and commodities now accounts for around one sixth of the region's total broking revenue. We are also developing the Fixed Income broking capability in the region, and we have hired a team to build our presence in corporate and sovereign bonds in the region who will start with the business during the second half.

Average broker headcount in the region, excluding PVM, was 5% lower than in 2014 reflecting the actions taken to improve the cost base, with average revenue per broker up 8%. Period end broker headcount in Asia Pacific, including PVM, was 365.

Underlying Operating profit

The revenue, underlying operating profit and operating margin by region shown below are as reported.

 
                                   Revenue                Underlying Operating 
                                                                 profit 
                         ---------------------------  --------------------------- 
 GBPm                     H1 2015   H1 2014   Change   H1 2015   H1 2014   Change 
 
 Europe and the Middle 
  East                      241.9     209.0     +16%      46.3      43.0      +8% 
 Americas                   117.9     102.7     +15%       7.1       2.7    +163% 
 Asia Pacific                55.9      48.6     +15%       7.2       4.6     +57% 
                         --------  --------  -------  --------  --------  ------- 
 Reported                   415.7     360.3     +15%      60.6      50.3     +20% 
                         ========  ========  =======  ========  ========  ======= 
 
 
 Underlying Operating margin by region    H1 2015   H1 2014 
 
 Europe and the Middle East                 19.1%     20.6% 
 Americas                                    6.0%      2.6% 
 Asia Pacific                               12.9%      9.5% 
                                         --------  -------- 
                                            14.6%     14.0% 
                                         ========  ======== 
 

The GBP46.3m underlying operating profit in Europe and the Middle East was 8% higher than last year, but the underlying operating margin has reduced to 19.1%. The actions taken under the cost improvement programme last year have resulted in a 10% reduction in fixed broker employment costs in the first half, excluding PVM, compared with the same period a year ago, but this benefit has been offset by the operational leverage effect of the decline in base broking revenue and from the investments being made in strengthening and developing the business.

The significant improvement in profitability in the Americas reflects the benefit of building scale in the region and the cost improvement programme. Fixed broker compensation costs in the base business in North America were 17% lower than last year. The 163% increase in underlying operating profit to GBP7.1m has resulted in the underlying operating margin improving to 6.0%.

Underlying operating profit in Asia Pacific has increased by 57% to GBP7.2m, and the underlying operating margin in the region has increased to 12.9%. Fixed broker employment costs in the first half, excluding PVM, have been reduced by 8% compared with the first half of 2014. The benefit of the higher contribution margin has been complemented by the operational leverage effect of the higher broking revenue and by the increased revenue and operating profit from Risk Management Services.

Financial Review

The results for the first half of 2015 compared with those for the first half of 2014 are shown in the tables below.

 
 H1 2015 
--------------------------------------  -------------  -----------------  ----------- 
                                                             Exceptional 
   Income Statement                                      and acquisition 
   GBPm                                    Underlying            related     Reported 
                                                                   items 
 
 Revenue                                        415.7                           415.7 
                                        -------------  -----------------  ----------- 
 
 Operating profit                                60.6                            60.6 
 Credit relating to major legal 
  actions                                                           64.4         64.4 
 Amortisation of acquisition deferred 
  consideration                                                    (5.2)        (5.2) 
 Amortisation of intangible assets 
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