TP ICAP annual profits hit after writedowns

TP ICAP’s profits were dented after the interdealer broker booked a £65 million one-off charge related to the writedown of assets as it announced that it has put in place contingency plans for a no-deal Brexit.

Following a review after its £1.3 billion acquisition of ICAP two years ago, the firm wrote down the value of its Americas business by £58 million and the Asia Pacific business by £7 million.

The firm incurred a £44 million cost last year related to the integration of ICAP and expects to book no more than £160 million of total costs by the end of the integration process.

Pre-tax profits at TP ICAP fell to £62 million in 2018 from £72 million the year earlier.

Nonetheless share rose 6.8% to 324.1p in early trade as underlying pre-tax profits – before acquisition, disposal and integration costs, and one-off charges – increased to £245 million from £233 million.

Revenue rose 3% to £1.76 billion.

In his first set of full-year results since taking over the group last July, boss Nicolas Breteau said TP ICAP delivered “resilient” earnings and that his key priority has been to complete the Tullett Prebon and ICAP integration.

He said: “This combination enables the deepest and broadest pools of liquidity in the OTC (Over-The-Counter) market, which is a source of real value to our clients and our business. Whilst there is more work to do, real progress has been made with the integration in the past year.”

Mr Breteau added: “The political and economic environment continues to present us with both opportunities and challenges.

“However, I am confident that with a renewed strategy, founded on our strategic pillars, and renewed sense of purpose we are in a good position to navigate these successfully.”

As part of its contingency plans for Britain’s impeding departure from the European Union, TP ICAP has set up a new subsidiary in France and plans to open a branch in the Netherlands.

The firm is also relocating its electronic trading business i-Swap to Amsterdam and plans to increase the headcount of broking staff at its EU-based offices.

The company said around 90% of its broking revenues are largely unaffected by Brexit but the divorce is still a “significant regulatory and operational challenge for the group”.