Icap’s caution sees investors become wary

INTERDEALER broker Icap, run by former Tory party treasurer Michael Spencer, said yesterday that the pace of growth in its post-trade unit, an area in which it has invested heavily in recent years, was not yet meeting its medium-term targets.

Despite confirmation that it still expects to hit its profit guidance of £333-357m for the year ending 31 March, the news saw ICAP shares slip 0.6 per cent to 545p.

Analyst at Panmure Gordon, Vivek Raja said: “My reading is that management are uncomfortable with analysts who have upgraded beyond their guidance.

“Icap’s statements are typically positive. There’s more of an element of caution than investors are used to seeing.”

The largest interdealer money broker in the world also raised concern among investors over its post-trade business, one of the more highly rated earnings streams within the group, after it said the unit was not yet meeting its medium-term targets.

Icap, which has invested heavily in its post-trade business in recent years, said: “Post-trade risk and information continues to grow revenues, but the pace of growth is below what we expect in the medium term.”

Analysts at Shore Capital said: “(This) may be viewed as a disappointment given the importance attached to post trade services in the group’s strategy”.