Interim Management Statement (0294D)
May 10 2012 - 1:00AM
UK Regulatory
TIDMTLPR
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.
Business Update
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.
Enquiries:
Nigel Szembel, Head of Communications, Tullett Prebon plc
Direct: +44 (0)20 7200 7722
This information is provided by RNS
The company news service from the London Stock Exchange
END
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