Wednesday tips round-up: Icap, Homeserve

20th May 2015 15:57

Low levels of liquidity in markets, reflected in reduced trading volumes, impacted on Icap´s latest full-year figures. Global broking profits dropped by almost 30%, with the world´s largest lenders having curtailed fixed-income trading as a result of new legislation. The interdealer broker said pre-tax profits fell by 21% and its revenues by another 7% in the latest reporting period. Coming on the heels of fresh five-year highs for the share price, that gave the market pause for thought.However, the decline in trading is manageable, as it only accounts for a quarter of the firm´s profits. Indeed, the firm should now have more in common with the likes of Bloomberg and Thomson Reuters rather than Tullet Prebon. As the company continues to diversify towards its new business lines that should provide some comfort. "Hold for the long-term," says The Times´s Tempus.Homeserve´s investment in its US business is paying off and its units in France and Spain are starting to turn around. That has lit a fire under the company´s share price, which is up by about 20% since the start of the year. The emergency repairs insurer, which has also managed to overcome its recent mis-selling scandal, also rewarded the patience of its shareholders by awarding them a special dividend of 30p a share.Customer numbers Stateside are already close to those in the UK and other markets will come, although for now the company is focusing on making it easier for clients to use its digital services. British Gas´s boiler installation and insurance operations are a testament to the opportunity at hand. It achieved an annual profit of 300m pounds. Homeserve is ready to motor again. Buy, says Tempus.