Volatile October markets make good business for TP ICAP

TP ICAP said volatile markets in October supported revenue at its interest rate trading and data divisions as the interdealer broker stuck to reduced guidance for annual results.

Reporting on trading in the previous four months the broker said annual results would meet guidance it had downgraded in July.

Revenue for the four months to 31 October rose 1% from £562m a year earlier as global broking and energy and commodities revenue were unchanged from a year earlier. Rates and equities performed well, the FTSE 250 company said. Revenue for the first nine months of the year dropped 1% from £1.49bn a year earlier.

The company said business was good in October when the US central bank’s decision to increase interest rates. Interdealer brokers do well when markets are volatile, triggering trading by their banking clients.

The FTSE 250 group has been through a turbulent period, firing former CEO John Phizackerley in July after warning rising costs would force it to miss expectations for annual profit. It said a different boss was needed to extract savings from the merger of Tullett Prebon and ICAP and develop the business.

Nicolas Breteau, former head of global broking and now TP ICAP’s chief executive, said: "Today's trading update demonstrates that TP ICAP is well placed to grow in mixed market conditions, characterised by periodic volatility that we saw in October following the US Federal Reserve's rates decision.

“This underlines our firmly held belief that investing in growth areas such as data and analytics will benefit TP ICAP over the longer-term as we develop solid and scalable revenues across our global businesses.”

The company announced the purchase of Axiom Commodity Group, an energy and commodities broker based in the US for an initial $15.1m (£11.6m) in cash with an agreed further payment of $3.1m over three years and a further $10.9m depending on performance of the business.

TP ICAP shares rose 1.6% to 292.90p at 09:05 GMT.