TP ICAP Regulatory News (TCAP)

Trading update and directorate changes

Ahead of the interim results for the six months to 30 June 2018, to be announced on 7 August 2018, TP ICAP plc (the "Company") provides an update on trading and a change in leadership.

Trading update

Revenues for the six months to 30 June were 3% higher than the prior year at constant exchange rates and 2% lower as reported. This is consistent with 2018 full year revenue guidance provided in March, which remains unchanged. Both the Tullett Prebon and ICAP businesses continue to contribute to Group revenue growth.

Actions taken in the first half of the year have delivered additional synergy savings of around £5m in the period and we have exited H1 at an annualised run rate of around £65m.

The Board has reappraised its approach to the integration and the ongoing investment needs of the business in the light of the evolving industry landscape. As a result the Group is reducing its synergy target from £100m to £75m by the end of 2019 on an annualised basis.

Underlying operating profit for 2018 will be impacted by additional ongoing cost headwinds of around £10m, relating to Brexit, MIFID II, regulatory and legal costs and IT security. Market forces are expected to increase broker compensation in 2018 from 50.5% in FY 2017 to at least 51%. Near-term additional UK regulatory capital requirements and the refinancing of the revolving credit facility (RCF) are likely to increase finance costs in 2018 to around £35m. As a result, earnings per share for 2018 are expected to be slightly below the bottom-end of the range of analyst expectations1. 

2019 will see the cost associated with Brexit, regulatory and legal, and IT security increase from the above-mentioned £10m in 2018 to £25m. In addition, the Group plans to make strategic organic investments of around £15m in Global Broking, Energy & Commodities and the Data & Analytics divisions to accelerate the future growth of the TP ICAP business. The increased finance costs mentioned above will increase to around £40m in 2019. 

Directorate changes

TP ICAP announces that John Phizackerley is leaving his post as Chief Executive and as a member of the Board with immediate effect and has been replaced by Nicolas Breteau, subject to FCA approval. Nicolas joined Tullett Prebon in 2016 as Chief Commercial Officer and currently leads TP ICAP's largest business, Global Broking.

In addition, Robin Stewart has been appointed as Chief Financial Officer on a permanent basis, subject to FCA approval. Robin joined Collins Stewart Tullett Plc in 2003 as Head of Tax and has been acting as the Company's Interim Chief Financial Officer since November 2017.

Both Nicolas and Robin will become members of the Board with immediate effect.

Rupert Robson, Chairman, said: "The evolving landscape is driving up costs across our industry. The acquisition of ICAP has given us greater scale to withstand this pressure. The potential for these combined businesses remains extremely compelling and this will be evidenced in the coming years. However, it has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process. 

As part of our established succession plan, the Board and I are very pleased indeed to welcome Nicolas to his new role as Chief Executive. We are confident he has the skill-set to deliver the future growth of the business and conclude the integration. 

The Board and I are also delighted to confirm Robin as the Company's permanent Chief Financial Officer. We believe that Nicolas and Robin make an excellent team to lead the Company for the future."

For further information:

Analysts and Investors

Robin Stewart

Group Chief Financial Officer

robin.stewart@tpicap.com

+44 (0) 20 7200 7603

Sam Dobbyn

Group Head of Financial Planning and Analysis

sam.dobbyn@tpicap.com

+44 (0) 20 7200 7147

Media

Rebecca Shelley

Group Corporate Affairs Director

rebecca.shelley@tpicap.com

+44 (0) 20 7200 7750

Jamie Dunkley 

Group Media Relations Director

jamie.dunkley@tpicap.com

+44 (0) 20 7200 7524

1 Company-derived consensus, taking all analysts who have updated models since the Preliminary Results in March 2018 is for underlying EPS of 37.0p, with a range of 34.9p to 39.0p.

Notes to Editors:

About TP ICAP

TP ICAP Group manages a portfolio of businesses, providing intermediary services, contextual insights and intelligence, trade execution solutions and data and analytics. 

For further information on TP ICAP please visit www.tpicap.com. 

About Nicolas Breteau

Nicolas Breteau has extensive experience across the global broking industry. He joined Tullett Prebon as Chief Commercial Officer in 2016, and then moved to run TP ICAP's largest business, Global Broking.

Nicolas started his career in 1993 on the Listed Derivatives Exchange MATIF (later part of Euronext). From 1993 to 1998, he held several senior positions at the derivatives broker FIMAT, including Deputy CEO of the Paris Office. He then moved to London as Head of Risk for EMEA, and subsequently became Deputy CEO then CEO of the FIMAT London Branch.

In 2005, Nicolas was promoted to CEO of EMEA, a position he consolidated after Newedge was formed through the merger of FIMAT with Calyon Financial in 2008. He was appointed Global Head of Sales and Front-Office in 2009 and became Chief Executive of Newedge Group in 2010. He moved from Newedge in 2014 following the sale of the company to Société Générale, and became Senior Managing Partner of a consulting firm, 99 Advisory.

Nicolas graduated from Ecole Superieure de Commerce de Bordeaux. He has been a director of several Boards including the Futures and Options Association (UK), Futures Industry Association (USA), Altura (Spain), Citic/Newedge (China) and has been the chairman of i-swap since February 2018.

He is a trustee at PSE For a Child's Smile UK, which helps deprived children in Cambodia.

About Robin Stewart

Robin Stewart joined Collins Stewart Tullett plc in 2003 as Head of Tax, before becoming Head of Group Finance & Tax for Tullett Prebon plc in 2010. Prior to that he spent 13 years at Dresdner Kleinwort where he was Deputy Head of Tax, having started his career at Arthur Andersen.

He was involved in Collins Stewart Tullett's acquisition of Prebon Yamane, the demerger of Collins Stewart from Tullett Prebon plc, and the recent acquisition of the Global Broking and Information Business of ICAP.

Robin was appointed TP ICAP Interim CFO in November 2017 having been the Group Deputy CFO and Financial Controller at Tullett Prebon since 2010.

He was educated at the University of Manchester gaining a BSc in Geography.

No disclosure obligations arise under paragraphs (2) to (6) or LR9.6.13 of the UK Listing Rules.