RNS Number : 0294D
Tullett Prebon PLC
10 May 2012
10 May 2012
Tullett Prebon plc
AGM Statement and Interim Management Statement
Tullett Prebon plc (the "Company") is today issuing its Interim Management Statement in relation to the period from 1 January 2012. This statement will be delivered to those attending the Annual General Meeting today.
Market conditions have continued to be challenging. The overall level of market activity in all three regions in the first part of the year has been slightly lower than in the same period last year.
Revenue in the four months to April was GBP305m, in line with that reported for the equivalent period last year. At constant exchange rates, and excluding the recent acquisitions of Convencao and Chapdelaine, revenue was 4% lower.
In the light of the challenging market and competitive conditions and the increased costs faced by the business relating to electronic platform development and other costs related to impending regulatory changes, a number of actions were taken towards the end of 2011 to reduce costs and to maintain flexibility in the cost base. Further actions have been taken in 2012, as discussed in the 2011 preliminary results announcement. These further actions now involve a reduction in headcount of 140, split broadly two-thirds front office, one-third support, with a cost to achieve of GBP14m, and an annual reduction in fixed costs of approximately the same amount. The cost of these actions will be included as an exceptional charge in the 2012 accounts.
On 22 March the Company announced that it had submitted a motion to the New York Court to confirm the arbitral award made by a tribunal of the American Arbitration Association in connection with claims by BGC that the Company's information sales subsidiary misused certain market data it was being supplied under a redistribution agreement. The arbitrator's award is that the Company should pay BGC $0.8m plus interest at the statutory rate from 1 January 2010. BGC's application for reasonable attorney's fees and costs was denied. In response to the Company's motion, BGC have cross moved seeking to vacate the arbitrator's award. The outcome of these motions is expected to be known later this year.
Legal action continues to be pursued against BGC and former employees in the United States. The FINRA arbitration on the claim brought by the subsidiary companies in the United States directly affected by the raid on the business by BGC in the second half of 2009 has commenced and is expected to continue through the remainder of the year. A separate action has also been brought by the Company in the New Jersey Superior Court, alleging, among other causes of action, violations under the NJ RICO Act. Since 1 January, GBP3.5m of costs have been incurred in relation to these actions. Consistent with the treatment adopted in 2011, these costs will be recognised as an exceptional charge in the 2012 accounts.
On 2 May, the Company announced that it had reached agreement to acquire Elevation LLC, an equities and equity derivatives interdealer broker based in New York, for a consideration of $13.0m to be settled in cash on completion. The acquisition is expected to complete before the end of the first half of the year.
The Company's financial position remains strong.
Nigel Szembel, Head of Communications, Tullett Prebon plc
Direct: +44 (0)20 7200 7722
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