IAP.L Regulatory News (IAP)

29 Mar 2007 07:04

ICAP PLC29 March 2007 ICAP Pre Close Period Trading Statement London, 29 March 2007. ICAP plc (IAP.L), the world's largest interdealer broker,announces the following trading update ahead of the close period for itsfinancial year ending 30 March 2007. ICAP's preliminary results will beannounced on 23 May 2007. ICAP enjoyed an active end to the financial year benefiting from the significantrise in market volatility and volumes. These volatile conditions were especiallyprevalent in emerging markets, mortgage backed securities, corporate bonds,credit and equity derivatives. The flight to quality away from many of theseasset classes also boosted volumes and benefited our business in governmentbonds, repo and interest rate swaps. The active conditions in global financial markets also led to a significantincrease in volumes on ICAP's electronic broking platforms (EBS and Brokertec).Daily electronic broking volumes exceeded $1 trillion ($1,000 billion) for thefirst time on two successive days in March. This $1 trillion of trading activitycomprised more than 175,000 transactions on each day by various counterpartiesin more than 40 countries. Average daily electronic broking volume rose to $678billion in the second half of the year. The integration of the ICAP and EBS electronic businesses continues to make goodprogress. As previously stated, total technology and other related savings areon track to deliver at least $45 million per annum by the financial year endingin March 2009. ICAP estimates that the combination of ICAP electronic broking and EBS accountsfor about 45% of the total global electronic interdealer broking revenues in2006. Given its growth profile, it is estimated that the proportion of ICAP'sgroup operating profit coming from the electronic broking and informationbusiness will increase from approximately a third in the financial year to 30March 2007 to approaching 40% in the financial year to 30 March 2008. As highvolume markets move to electronic broking the electronic business is expected togrow more rapidly than the voice broking business. ICAP also enjoyed an increasing share of the global interdealer voice brokingmarket revenues in 2006. ICAP continues to focus on developing its businesses inthe faster-growing products in energy, transport, credit derivatives, equityderivatives, emerging markets and structured products Growth in these marketshas been a key part of the recent success of the Group's voice broking business. In January 2007 the Group became subject to the new Capital RequirementsDirective. ICAP submitted to the FSA an application for a waiver fromconsolidated supervision under the Directive. The waiver has now been grantedand ICAP is not required to deduct goodwill arising on consolidation from thecalculation of its Financial Resource Requirement. As a result ICAP is expectedto have regulatory capital that exceeds the Requirement by approximately £300million. ICAP's strategy is to grow both its voice and electronic businesses, bothorganically and by selective acquisition. There continue to be a number ofopportunities for further consolidation of both voice and electronic brokingbusinesses. ICAP is very well placed to make further acquisitions using itsexisting financial resources and by raising additional debt financing. Despite further weakening of the dollar/sterling exchange rate, profit (beforetax, amortisation and impairment of intangibles arising on consolidation andexceptional items) for the financial year ending 31 March 2007 is anticipated tobe in line with the consensus of the analysts' current forecasts. Note: The current forecasts for ICAP plc pre-tax profits referred to in thisannouncement are based on forecasts of profit before tax, amortisation andimpairment of intangibles arising on consolidation and exceptional itemsprovided by six equity analysts. The consensus of those forecasts for the yearto March 2007 is £250 million, with a range of £241 million to £256 million,compared with the results for the year to March 2006 when ICAP plc's profitswere £204 million. The source of these estimates was Reuters. Contacts: Michael Spencer Group Chief Executive (44) 20 7050 7400Mike Sheard Director of Corporate Affairs (44) 20 7050 7103Neil Bennett Maitland (44) 20 7379 5151 About ICAP: ICAP is the world's largest interdealer broker with a daily average transactionvolume in excess of $1.5 trillion, more than 50% of which is electronic. TheGroup is active in the wholesale markets in interest rates, credit, commodities,foreign exchange and equity derivatives. In June 2006 ICAP acquired EBS, theworld's leading provider of FX trading and market data solutions. ICAP plc wasadded to the FTSE 100 Index on 30 June 2006. For more information go towww.icap.com This information is provided by RNS The company news service from the London Stock Exchange