NESE GUNER | CITI
As we expected, ICAP announced that it has taken action to reduce its cost base and been realigning the biz by reducing headcount in areas of lowered profitability. The cost base has already been reduced by a net £20m (~1.5 per cent of underlying cost base) and we think there is room for more cost cuts.
PHILIP MIDDLETON | BOA MERRILL LYNCH
The company is displaying a shareholder-friendly attitude to cost manage alongside its traditional growth orientation. At current levels, ICAP is simply too cheap, unless you instead believe that the capital markets have suffered major structural damage recently. This is definitely not our view, and so we reaffirm our Buy on ICAP.
JAMES HAMILTON | NUMIS
Further cost saving could help and are likely next year. The immediate net £20m benefit is a mixture of reduced staff numbers (the Brazilian redundancies was announced last year) and lower bonus payments opposed to just redundancies.
