Oil market volatility has been lucky for some – Tullett Prebon today said it expects its full-year profit margin to be higher than previously thought, thanks to the continued uncertainty surrounding black gold.
While oil explorers are crying into their (offline) wells, the FTSE 250-quoted interdealer broker said “the increased level of activity experienced throughout the year in the oil and related products markets has continued”. It added that the performance of its oil broker subsidiary PVM Oil Associates, acquired in November 2014, “has continued to be strong”.
“PVM’s main activities are in crude oil and petroleum products, and the business has continued to benefit from the pick-up in the level of activity in the oil and related products markets reflecting the significant changes in the oil price experienced since the start of the second half of 2014,” said the firm.
The price of Brent crude has plunged dramatically since its summer 2014 highs of $115 a barrel and is now languishing in the early $30s, with plenty of spikes in between, thanks to the continued stand-off between the Opec's de facto leader Saudi Arabia and US shale producers.
This increased activity has boosted Tullett’s coffers, with the company reporting a whopping 13 per cent rise in full-year revenue to £796m, if you include its oil business PVM.
But excluding PVM, the company would have seen its revenue decline two per cent at constant exchange rates over the same period.
Tullett now expects its full-year underlying operating profit margin to be around 13.5 per cent, mere months after warning that higher investment costs and lower revenues would eat into margins.
Unsurprisingly, investors loved this news. The company’s share price rose around nine per cent in early trading and settled 8.2 per cent higher at 340.9p.