ICAP reveals drop in annual pre-tax profit and revenue

ICAP's annual pre-tax profit fell 20 per cent to 284m pounds compared to the previous year as the broker was hit by the weak global economy, low interest rates and regulatory reforms.

The UK-based voice and electronic dealer broker and provider of post-trade risk services revealed a 12% decrease in revenue to £1.4bn in the year to March 31st 2013 and a 18% decline in earnings per share to 33p.

Electronic markets and post trade risk contributed 66% of operating profit which dropped 17% to £308m.

Chief Executive Officer, Michael Spencer, said it has been tough year in the wholesale financial markets.

"Trading activity across all asset classes was negatively affected by a combination of cyclical and structural factors including the depressed global economy, a low interest rate environment and lack of clarity around some aspects of regulatory reform," he said. "ICAP's financial performance reflects these extremely challenging conditions."

During the year, the company made major developments including the creation of its global broking division, the strengthening of its Electronic Broking Services arm and the launch of electronic trading platform i-Swap in US dollars.

The firm delivered cost savings of £60m, which was £10m more than previously announced.

ICAP had net cash of £25m, compared to the prior year's net debt of £82m. A full-year dividend of 22p remained unchanged from the previous year.

"Despite the current climate, we're keeping our focus on the long term, delivering on our strategic goals and priorities," Spencer said.

"We're investing, innovating and adapting the business to ensure it will thrive in the new financial landscape that is being shaped by profound regulatory changes. Wholesale financial markets are vital to the global economy and ICAP plays a critical role in increasing the transparency and efficiency of the markets and reducing risk."

RD