Business
Trading update and directorate changes
Trading update and directorate changes.
About this update from Tp Icap Group Plc
[{"type":"text","content":"\n \nRNS Number : 0855U TP ICAP PLC 10 July 2018 \n\nTrading update and directorate changes\nAhead of the interim results for the six months to 30 June 2018, to be announced on 7 August 2018, TP ICAP plc (the \"Company\") provides an update on trading and a change in leadership.\nTrading update\nRevenues for the six months to 30 June were 3% higher than the prior year at constant exchange rates and 2% lower as reported. This is consistent with 2018 full year revenue guidance provided in March, which remains unchanged. Both the Tullett Prebon and ICAP businesses continue to contribute to Group revenue growth. \nActions taken in the first half of the year have delivered additional synergy savings of around £5m in the period and we have exited H1 at an annualised run rate of around £65m.\nThe Board has reappraised its approach to the integration and the ongoing investment needs of the business in the light of the evolving industry landscape. As a result the Group is reducing its synergy target from £100m to £75m by the end of 2019 on an annualised basis.\nUnderlying operating profit for 2018 will be impacted by additional ongoing cost headwinds of around £10m, relating to Brexit, MIFID II, regulatory and legal costs and IT security. Market forces are expected to increase broker compensation in 2018 from 50.5% in FY 2017 to at least 51%. Near-term additional UK regulatory capital requirements and the refinancing of the revolving credit facility (RCF) are likely to increase finance costs in 2018 to around £35m. As a result, earnings per share for 2018 are expected to be slightly below the bottom-end of the range of analyst expectations1. \n2019 will see the cost associated with Brexit, regulatory and legal, and IT security increase from the above-mentioned £10m in 2018 to £25m. In addition, the Group plans to make strategic organic investments of around £15m in Global Broking, Energy & Commodities and the Data & Analytics divisions to accelerate the future growth of the TP ICAP business. The increased finance costs mentioned above will increase to around £40m in 2019. \nDirectorate changes\nTP ICAP announces that John Phizackerley is leaving his post as Chief Executive and as a member of the Board with im...