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(Alliance News) - TP ICAP Group PLC on Tuesday reported a declining profit in the first half of 2021, as a lack of volatility in financial markets hurt the trading firm.
Pretax profit narrowed substantially to GBP28 million for the six months ended June 30, from GBP78 million a year before.
Shares were down 5.1% to 187.00 pence in London on Tuesday morning, the worst performer in the FTSE 250.
TP ICAP cut its interim dividend to 4.0 pence per share, down from 5.6 pence a year before.
First-half revenue fell 1.2% year-on-year on a constant currency basis to GBP936 million from GBP947 million, the company said. On a reported basis, revenue fell 5.5% from GBP990 million.
Excluding Liquidnet, which has contributed GBP55 million in revenue since TP ICAP acquired it in March, revenue was down 7% at constant currency and 11% on a reported basis.
The decline reflects quieter markets compared with the extraordinary volumes seen in March 2020, the London-based company said. TP ICAP provides broking and other services to markets including stocks, commodities and currencies, and benefits from high trading volume and volatility.
Trading in July and August was generally in-line with the prior year, the company noted.
Full-year revenue is expected to be "broadly in line with 2020 on a constant currency basis," excluding Liquidnet. In 2020, the company made GBP1.79 billion in revenue and a GBP129 million pretax profit. The group's earnings in 2021 have been hit by the stronger pound, with the company not engaged in currency hedging.
"In the first half we made good progress executing our strategy to better position the group to drive sustainable earnings growth," Chief Executive Nicolas Breteau said.
"Revenues excluding Liquidnet were broadly in line with the equivalent period of 2019, which saw more normal trading conditions compared to the exceptionally high volumes in the first quarter of 2020."
By Will Paige; willpaige@alliancenews.com
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