TP ICAP says October volatility lifted rates trading, data units

TP ICAP, the UK interdealer broker, said full-year results would be in line with its lowered market guidance as October’s market volatility boosted turnover at its interest rates trading and data units.

Revenue for the four months to the end of October rose 1 per cent from the £568m it recorded a year ago, the group said in a trading update on Friday. Turnover in the ten months of the year was 1 per cent lower than the £1.5bn it reported in 2017, it added.

The London broker also confirmed it would buy Axiom Commodity Group, a Texas-based energy broker, which has 22 brokers. It will pay an initial $15.1m in cash, with deferred payments totalling up to $14m over the next three years.

The deal is the first under new chief executive Nicolas Breteau.

TP ICAP has been recovering from a turbulent summer, in which it removed chief executive John Phizackerley and issued a profit warning, saying it needed to scrap an annualised cost savings target for 2019. Departing chairman Rupert Robson argued the company needed to invest to meet evolving industry trends. That includes spending on Mifid II, Brexit and legal and IT costs.

In the last few months trading conditions have been steady in interest rates and equities trading, and remained challenging in energy, TP ICAP said. However it said its data and badytics unit had risen 11 per cent in the period, owing to changes implemented by new management.

“This underlines our firmly-held belief that investing in growth areas such as data and badytics will benefit TP ICAP over the longer-term,” said Mr Breteau.

The Axiom purchase will support TP’s energy and commodities business, which made £167m in revenues in the first half, just under a fifth of total group turnover. Axiom made a pre-tax profit of $5.3m last year.