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TP ICAP Q3 revenue jumps 17%, full-year guidance backed
1st Nov 2019 07:49
(Sharecast News) - TP ICAP posted a jump in third-quarter revenues on Friday as it backed its guidance for the year.
In the three months to 30 September, revenue rose 17% to £478m, reflecting "favourable market conditions". In the year to date, revenue was 6% higher at £1.4bn.
Revenue in the global broking division was up 10% during the period to £334m, with a strong performance in rates offsetting a weaker performance in credit and equities.
In the energy and commodities business, revenue was 24% higher at £98m, as a result of selective hires and recent acquisitions, with "encouraging" macro conditions across the majority of products, particularly oil.
Revenue in institutional services and data & analytics was 38% and 9% higher, respectively, at £11m and £35m.
TP ICAP maintained its full-year guidance of low single-digit revenue growth on a constant currency basis "despite a strong performance in the third quarter". It highlighted current geopolitical uncertainties and said these may have an impact on transaction volumes in the fourth quarter.
Chief executive officer Nicolas Breteau said: "Today's strong trading update demonstrates that TP ICAP's trading portfolio is well placed to capitalise on volatile macro market conditions.
"Separately, our ongoing investment in areas such as energy & commodities, institutional services and data & analytics already bears fruit and ensures a higher-growth, diversified revenue profile."
RBC Capital Markets said: "Overall we see the Q3 statement as encouraging, as the company has been able to capitalize on the favourable conditions seen in the period. We remain of the view that the TP ICAP shares are undervalued.
"TP ICAP is a core component of the OTC market structure, and as the world's largest inter-dealer broker we see it as well positioned to continue to expand its activities and customer base."
In the three months to 30 September, revenue rose 17% to £478m, reflecting "favourable market conditions". In the year to date, revenue was 6% higher at £1.4bn.
Revenue in the global broking division was up 10% during the period to £334m, with a strong performance in rates offsetting a weaker performance in credit and equities.
In the energy and commodities business, revenue was 24% higher at £98m, as a result of selective hires and recent acquisitions, with "encouraging" macro conditions across the majority of products, particularly oil.
Revenue in institutional services and data & analytics was 38% and 9% higher, respectively, at £11m and £35m.
TP ICAP maintained its full-year guidance of low single-digit revenue growth on a constant currency basis "despite a strong performance in the third quarter". It highlighted current geopolitical uncertainties and said these may have an impact on transaction volumes in the fourth quarter.
Chief executive officer Nicolas Breteau said: "Today's strong trading update demonstrates that TP ICAP's trading portfolio is well placed to capitalise on volatile macro market conditions.
"Separately, our ongoing investment in areas such as energy & commodities, institutional services and data & analytics already bears fruit and ensures a higher-growth, diversified revenue profile."
RBC Capital Markets said: "Overall we see the Q3 statement as encouraging, as the company has been able to capitalize on the favourable conditions seen in the period. We remain of the view that the TP ICAP shares are undervalued.
"TP ICAP is a core component of the OTC market structure, and as the world's largest inter-dealer broker we see it as well positioned to continue to expand its activities and customer base."