FTSE 250 finance firm TP Icap’s share price surged after it announced a share buyback programme and upped its dividend.
The interdealer broker announced a £30m share buyback programme and increased its dividend by seven per cent to 4.8p.
The payouts came as pretax profit climbed to £91m from £72m last year thanks to a five per cent increase in revenue on a reported basis. Both of these were roughly in line with analyst consensus.
Its shares were up over 12 per cent in early morning trading.
TP Icap saw a strong performance from its energy and commodities business in particular, with revenue rising 12 per cent as the markets normalised following Russia’s invasion of Ukraine.
“We see continued strong demand for oil and natural gas, key segments for our business,” chief executive Nicolas Breteau said.
The firm noted it also saw trading in environmental – such as carbon credits and battery metals – as a “significant diversification opportunity” as the energy transition progresses.
Liquidnet, its equities trading business acquired back in 2021, saw revenue fall six per cent mainly thanks to a decline in block market volumes.
“Equity markets were challenging again,” Breteau said. “Whilst there was some improvement in stock market performances, many institutions maintained a ‘risk-off’ approach”.
Elsewhere, global broking revenue dropped one per cent while foreign exchange generated low single digit growth.
Analysts at Numis suggested that many brokers have been struggling with a depressed rates market for a number of years due to quantitative easing around the world. However, as central banks reversed this trend, interdealer brokers like TP Icap could reap the rewards.
“With central banks reducing their balance sheets again, this in our view implies more positive conditions going forward,” they wrote.