TP ICAP reports first-half growth, launches third share buyback

(Sharecast News) - TP ICAP reported steady growth across key metrics in its first-half results on Wednesday, as it launched its third share buyback programme valued at £30m. The FTSE 250 company reported a 1% increase in revenue to £1.14bn, with adjusted EBIT rising 4% to £170m, reflecting an improved EBIT margin of 14.9%.

Statutory EBIT saw a significant 20% jump to £131m, translating to an 11.5% margin.

The company said its diversification strategy continued to pay off, with significant contributions from non-broking businesses.

Liquidnet and Parameta Solutions now accounted for 37% of the group's adjusted EBIT, up from 23% in 2022.

Liquidnet, in particular, recorded an 8% revenue increase, driven by strong performance in equities.

Parameta Solutions saw a 10% revenue rise, underlining the growing demand for OTC pricing data.

TP ICAP said its tight control on fixed costs contributed to higher profitability, with management and support costs reduced by 4% year-on-year.

The company maintained its interim dividend at 4.8p per share, aligning with its dividend policy of a 50% payout ratio of adjusted post-tax earnings.

At the same time, TP ICAP announced a third £30m share buyback programme, following the near-completion of its second buyback.

The board said the initiative was part of its dynamic capital management strategy, focussed on returning capital to shareholders, reducing debt, and investing in growth opportunities.

It said the new buyback programme would take place alongside a three-year initiative to release £50m of surplus cash and achieve £50m in annualised cost savings.

Looking ahead, TP ICAP was optimistic about the second half, anticipating that ongoing geopolitical uncertainty and potential interest rate changes would continue to support its broking and commodities divisions.

The company said it was also set to generate additional cost savings through operational efficiencies and further legal entity consolidations.

"We are announcing today, and commencing shortly, our third £30m buyback in 12 months," said chief executive officer Nicolas Breteau.

"The group is committed to generating more cash to return to shareholders, reduce debt, and invest in the business.

"We are launching a three-year programme to release at least £50m of surplus cash through more legal entity consolidations, and generate at least £50m of annualised savings through a range of operational efficiency initiatives."

Breteau added that TP ICAP was progressing strategic options in relation to Parameta Solutions, as previously announced.

"They include a potential offering, which might entail a listing in the United States, with the group maintaining a majority stake.

"There is, of course, no certainty about either a public offering or its location.

"We will update on progress, as and when appropriate."

At 0840 BST, shares in TP ICAP Group were up 9.22% at 230.46p.

Reporting by Josh White for Sharecast.com.