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Icap profit rises on e-trading

23 May 2007  |  734 views  |  0 Source: Icap

Icap (IAP.L), the world's premier interdealer broker, today announced its audited results for the year ended 31 March 2007.

  • Record revenues, profit and adjusted EPS following strong growth across the Group
  • Overall revenue rose by 20% to £1,106.3m
  • Electronic revenue increased by 103% to £199.1m helped by the acquisition of EBS
  • On an underlying basis(3) revenue grew by 12% and operating profit(4) by 16%
  • The Group's operating profit(4) margin rose to a record 22%
  • The Group continues to invest in people and technology, particularly further upgrades to the Group's electronic broking platforms
  • Strong free cash flow of £190.1m. Despite investing £290.2m in acquisitions ICAP has net cash of £19.5m
  • The directors recommend a final dividend per ICAP share of 9.3p, which will be paid on 24 August 2007. The full year dividend will be 12.3 p, an increase of 23%

Michael Spencer, Group Chief Executive Officer, said "These record results show a very strong performance from ICAP; especially when factoring in the very sharp decline in the value of the US dollar in which we earn the majority of our revenues.

"Last year's acquisition of EBS has proved an outstanding success. The combination of its electronic spot foreign exchange and ICAP's fixed income electronic broking businesses has created a global multi-product platform that we believe has enormous growth potential. The integration of the ICAP and EBS businesses is making very good progress and we are on track to deliver total technology and other related savings of at least $58m per annum by the financial year ending in March 2009.

"As the more liquid, standardised products continue to migrate to our electronic platforms, our voice broking franchise in structured and complex products, energy, credit, equity derivatives and less liquid markets continues to enjoy high growth. We believe that our voice broking activities also have material room for expansion due to product innovation. This year's results amply demonstrate the success of our strategy of retaining market leadership in both voice and electronic broking.

"Our markets continue to display strong, long-term structural growth. We currently estimate that the underlying annual growth rate of industry revenues, in the medium term, will be between 7% and 9%, though there are periods when volatility and volumes in our markets can be very high. While we have not experienced high levels of volatility at the beginning of this year, underlying revenues are ahead of last year."

(1) Excludes amortisation and impairment of intangibles arising on consolidation and exceptional items.
(2) Profit is defined as pre-taxation profit before amortisation and impairment of intangibles arising on consolidation and exceptional items.
(3) Adjusted to exclude the impact of foreign exchange and acquisitions.
(4) Operating profit excluding amortisation and impairment of intangibles arising on consolidation and exceptional items.

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