TIDMTCAP
RNS Number : 6987M
TP ICAP PLC
13 May 2020
TP ICAP PLC
13(th) May 2020
TP ICAP plc (the "Group")
Trading Update for the three months ended 31 March 2020 (the
"Period")
TP ICAP issues a scheduled trading update in relation to the
Period. Commentary on year on year performance is on a reported and
constant currency basis. Despite a very challenging macroeconomic
backdrop, the Group has reacted quickly to protect the interests of
all stakeholders and has delivered robust financial
performance.
Response to COVID-19 pandemic:
-- The Group fundamentally re-engineered its operations during
lockdown to maintain continuous global client services and
liquidity across all asset classes and desks by tactically
deploying new digital technology and changing workflows to allow
the vast majority of our employees to work from home.
-- This presented significant technological, management and
regulatory challenge coming as it did during a period of extremely
high volatility and a sharp increase in volumes but the Group
continued to serve clients and provide liquidity in the markets in
which it operates effectively.
-- The Group has not furloughed or reduced any of its permanent
workforce, nor has it requested any government aid in any of its
global locations as a response to the COVID-19 pandemic.
-- In response to COVID-19, we have directed our Disaster Relief
Fund toward global and local initiatives that support those
affected by the pandemic in the communities where we operate.
-- We have donated 20,000 face masks to health authorities in
the UK and US and have encouraged all of our UK staff to take part
in the 2.6 Challenge which aims to raise funds for UK charities
which have seen a decline in donations during the Period.
Revenue:
-- Revenue in the Period of GBP547m was 17% higher than the
GBP469m revenue reported for the equivalent period last year and
17% higher on a constant currency basis.
-- Revenue growth reflected higher client volumes due to the
volatile market conditions caused by the COVID-19 pandemic at the
end of the Period.
Revenue by division:
-- Global Broking revenue grew 10% in the Period relative to the
equivalent period last year on a reported basis (10% on a constant
currency basis) with all asset classes demonstrating strong revenue
growth. Rates and equities showed particular strength capitalising
on higher volatility and volumes.
-- Energy & Commodities performance was very strong across
all products and revenue grew 26% in the Period relative to the
equivalent period last year on a reported basis (27% on a constant
currency basis) as a result of favourable macro conditions amidst
increased volatility.
-- Institutional Services revenue grew by 85% in the Period on a
reported basis (85% on a constant currency basis) as it benefited
from new hires, on-boarding new clients and increased client
appetite.
-- Data & Analytics revenue grew 10% in the Period on a
reported basis (10% on a constant currency basis) against a strong
prior year comparative period as the business continues to benefit
from strategic initiatives to launch new products and deepen its
client relationships.
GBPm Three month period to 31 March
--------------------------------------------------
Constant Currency
Revenues 2020 2019 Reported Change Change
-------------------------------- ----- ----- ---------------- ------------------
Global Broking 359 325 +10% +10%
Inter-division revenues(2) 4 4 +0% +0%
-------------------------------- ----- -----
Total Global Broking 363 329 +10% +10%
-------------------------------- ----- -----
Energy & Commodities 117 92 +26% +27%
Inter-division revenues(2) 1 1 +0% +0%
-------------------------------- ----- -----
Total Energy & Commodities 118 93 +26% +27%
-------------------------------- ----- -----
Institutional Services(1) 37 20 +85% +85%
Data & Analytics 34 31 +10% +10%
Inter-division eliminations(2) (5) (5) +0% +0%
-------------------------------- ----- -----
Reported Revenues 547 469 +17% +17%
-------------------------------- ----- -----
Notes:
1. For Q1 2019, GBP7.2m of revenues have been reclassified
from Global Broking into Institutional Services as a result
of the transfer of Global Broking's Rates' Relative Value (RV)
business to Institutional Services, reflecting the mechanics
of the underlying business.
2. Inter-division charges have been made by Global Broking
and Energy & Commodities to reflect the value of proprietary
data provided to the Data & Analytics division. The prior year
Period has been restated in line with the new-presentation
format. The Global Broking inter-division revenues and Data
& Analytics inter-division costs are eliminated upon the consolidation
of the Group's financial results.
Financial position and liquidity:
-- The Group regularly assesses the strength of its financial
position and liquidity under different market scenarios and stress
scenarios. These assessments have been updated to include both
current market conditions caused by COVID-19 and further extreme
stress scenarios.
-- The Group believes that it has a strong balance sheet,
sufficient cash resources and access to incremental liquidity under
the various adverse scenarios assessed.
-- As at the end of the Period, GBP250m of the Group's Revolving
Credit Facility ("RCF"), which matures in December 2022, remains
undrawn. This facility remains available to meet the Group's
liquidity needs and this can be used for general corporate
purposes. The Group has no bond maturities until 2024.
2020 full year guidance and outlook:
-- While the Group has performed strongly in the Period, our
full year guidance of low single-digit revenue growth remains
unchanged at this point. The Group believes that it is too early to
fully assess the impact of the COVID-19 pandemic on TP ICAP and its
customers. We will continue to monitor the impact on the Group
through the remainder of the year.
-- The Group notes that much of the targeted investment spending
we guided to in March will be deferred and re-evaluated as the
Group prudently manages its resources as a response to the adverse
impact from COVID-19.
-- The Group notes that trading activity in April 2020 has
returned to more normal levels compared with levels seen during the
period and is in line with the Group's full year guidance.
2019 AGM, investor update and redomiciliation timetable:
-- The Group will host its Annual General Meeting later today.
-- The Group has decided to reschedule its announced 17 June
2020 Investor Update. This is to ensure the safety and well-being
of our employees, investors and other stakeholders due to the
ongoing impact of COVID-19. The Group plans to host an Investor
Update during the second half of 2020 and will update on an exact
date in due course.
-- It continues to be the Group's intention to restructure the
Group under a new holding company in Jersey. The Group is currently
in the process of seeking the relevant regulatory approvals, which
have taken longer than originally anticipated due to COVID-19, and
will in due course seek shareholder approval for the restructuring.
The Group currently expects to post the relevant shareholder
documentation by the end of 2020 with completion anticipated in
early 2021.
Nicolas Breteau, Chief Executive Officer said:
"I would like to take this opportunity, on behalf of TP ICAP, to
express our sympathy to all those who have been affected by the
COVID-19 pandemic. While these are challenging times for all
companies to navigate, I am extremely proud of, and grateful to, my
colleagues at TP ICAP who have worked tirelessly since the outbreak
started. I am also thankful to our clients who have faced similar
challenges to ourselves. We have worked closely with them, and will
continue to do so, in order to continue to provide them with the
high standards of service they expect from us."
"Thanks to the support of our staff and our clients, our Group,
as a systemically important market infrastructure provider, has
been able to continue to support and provide the essential
liquidity to keep the wholesale financial and commodities markets
in which we operate open and functioning in an orderly manner."
"Today's strong trading update demonstrates not only the
resilience of our business and that critical role we play as part
of the global financial infrastructure, but also the
professionalism and dedication of our colleagues. We have been
tested to the extreme and have responded powerfully. Our Group has
performed strongly in Q1, but it is too early to fully assess the
impact of the COVID-19 pandemic to our full year outlook. We will
use everything we have learned in the past few weeks to strengthen
our business further as the financial world slowly returns to more
normal conditions and in the meantime we approach the remainder of
2020 with confidence."
For further information:
Analysts and investors
Al Alevizakos, Head of Investor Relations and FP&A
Direct: +44 (0) 20 3933 3040
Mobile: +44 (0) 79 9991 2672
E-mail: Alevizos.Alevizakos@tpicap.com
Media
William Baldwin-Charles, Group Media Relations Director
Direct: +44 (0) 20 7200 7124
Mobile: +44 (0) 78 3452 4833
E-mail: William.Baldwin-Charles@tpicap.com
Neil Bennett, Maitland
Direct: +44 (0) 20 7379 5151
E-mail: tpicap-maitland@maitland.co.uk
About TP ICAP
-- TP ICAP brings together buyers and sellers in global
financial, energy and commodities markets.
-- It is the world's largest wholesale market intermediary, with
a portfolio of businesses that provide broking services, data &
analytics and market intelligence, trusted by clients around the
world.
-- We operate from offices in 26 countries, supporting
award-winning brokers with market-leading technology.
Further information on the company and its activities is
available on the Company's website: www.tpicap.com
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END
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