TP ICAP Group (TCAP) H1 2024 earnings summary

Executive summary

• Group revenue increased 3% in constant currency to £1,144m, with record adjusted EBIT up 9% to £170m and margin rising to 14.9%.

• Liquidnet and Parameta Solutions contributed 37% of group adjusted EBIT, reflecting successful diversification.

• Interim dividend maintained at 4.8p per share; third £30m buyback announced in 12 months.

• New efficiency programme targets at least £50m annualised cost savings and £50m surplus cash release by 2026.

• Tight cost control achieved, with group management & support costs down 4% and Liquidnet M&S costs reduced 18%.

Financial highlights

• Adjusted EBITDA up 7% to £206m; adjusted EBIT up 9% to £170m, margin 14.9%.

• Adjusted profit before tax up 10% to £160m; adjusted basic EPS up 8% to 16.2p; reported basic EPS up 43% to 12.0p.

• Net finance costs down 41% to £10m; effective tax rate increased to 28.8%.

• Significant items after tax reduced 37% to £32m, mainly non-cash.

• Net cash at period end £913m, down from £1,019m at year start due to seasonal outflows and debt repayments.

Outlook and guidance

• Board remains comfortable with FY 2024 market expectations for adjusted EBIT, subject to FX movements.

• Significant items guidance increased to £90m pre-tax, reflecting efficiency programme and transaction costs.

• Market conditions expected to be broadly supportive in H2, with volatility and potential rate cuts seen as positives.

• Parameta Solutions expected to benefit from rising demand for OTC pricing data.

• Dividend policy: 2x adjusted post-tax earnings cover, 30-40% payout of H1 earnings.