ARE YOU IMPRESSED BY ICAP’S TRADING STATEMENT?
JUSTIN BATES DANIEL STEWART
“We had been concerned about falling volumes, particularly in the electronic business. However, the statement illustrates the inherent earnings power in ICAP’s diversified model. For electronic volumes to be down 28 per cent year on year, but revenues to be up six per cent is testament to the strength of the business.”
NITIN ARORA NOBLE
“With overall revenues increasing and e-broking volumes muted, there are no surprises in the trading statement. Given a small pre-tax profit miss in the first half, we are likely to reduce our full year pre-tax profit estimates by about two per cent. ICAP deserves to trade at a premium to rival inter-dealer broker Tullett.”
NIC CLARKE CHARLES STANLEY
“There is likely to be pressure on margins due to the increase in voice broking’s portion of the business. However, there are likely to be further efficiencies to come and high levels of recent investment should have a positive impact on revenues. With the group strongly cash generative our recommendation remains “accumulate”.”