ICAP interims

ICAP is an interdealer broker and provider of post trade risk mitigation and information services.  I have a holding in my income portfolio (epic code: IAP).

ICAP announced their interim results today with group revenue decreasing by 9% on a constant currency basis and 14.6% on a reported basis to £620m, in line with their trading announcement on 30 September, commented on here.

 

Trading operating profit (that excludes acquisition & disposal costs and exceptional items) for the six months was £100m, down 26% on a constant currency basis and 33.8% on a reported basis. Trading EPS was 10.1p down 37.7%, although reported EPS was up 51.7% at 4.4p due to lower acquisition disposal costs and exceptional items.  A maintained interim dividend of 6.6p was declared.

 

Free cash flow was a negative £17m and along with the final dividend payment of £99m were the main causes of net debt increasing from £96m at the beginning of the year to £204m.  

 

The current restructuring programme is expected to deliver annualised savings in excess of £60m, of which £43m will be realised this year, the majority in the second half.

 

Management's expectations for the full year remain unchanged, despite seeing some increased activity and positive sentiment, as they feel it is too early to predict whether those current activity levels will persist.

 

In a separate announcement ICAP stated they were in discussions to combine ICAP Shipping with Howe Robinson Group Pte Ltd, the leading ship-broking group to create one of the world's leading businesses in the sector. The newly formed ship-broking company is expected to be operational in the second quarter of 2015.  Further announcements will be made on the details of the deal. 

 

The SP fell 10% today to 386p, back to where the price was after the trading announcement on 30 September.  So no change really and the company is still seeking a replacement for the FD Torrens who announced his departure on that day.