(Alliance News) - Interdealer broker TP ICAP PLC on Monday unveiled a cost savings programme as it reported a slide in third quarter revenue.
Revenue for the first nine months of 2020 was GBP1.38 billion, down 2% on a year ago on a reported basis. Global Broking revenue was down 6%, reflecting "weaker trading volumes" in the third quarter against a strong prior year comparative.
Energy & Commodities revenue was up 4% and Institutional Services 28% higher, while Data & Analytics grew 7%.
For the third quarter, group revenue was down 19% to GBP388 million from GBP478 million a year ago. Global broking revenue was down 19% in the recent quarter and Energy & Commodities by 15%, but Data & Analytics revenue was up 9%.
"While transaction volumes were particularly subdued in the third quarter, we started to see increased activity in our broking businesses during October. In addition, investments made in the sales capability of the Data & Analytics business during the year, together with new product launches, means that we expect that business to exit the year with a double-digit growth rate," said TP ICAP.
Together with market volatility anticipated from the US election and Brexit, TP ICAP expects full-year revenue guidance to be in line with 2019 on a constant currency basis.
In addition to efficiency actions taken in its broking businesses during the second half, the firm is also seeking further improvement to its operating profit margin and has implemented a "targeted reorganisation" of the structure of broking businesses.
This is expected to yield annualised savings of around GBP35 million by the end of 2021.
"Over a nine-month period of substantial economic dislocation, TP ICAP's business has been resilient. We have implemented a targeted cost efficiency programme that will provide further support to our earnings power in an operating environment that remains uncertain," said Chief Executive Nicolas Breteau.
Shares in TP ICAP were down 0.5% at 197.41 pence in London on Monday.
By Lucy Heming;Â lucyheming@alliancenews.com
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TP ICAP (TCAP)