Shares in inter-dealer broker TP ICAP jumped as much as 15 per cent on Wednesday after its half-year profit beat market expectations and it launched a third share buyback programme.
The FTSE 250 firm, which connects buyers and sellers in finance, energy and commodities markets, reported a 10 per cent rise in adjusted pretax profit for the first half of 2024 to £160m.
It was boosted by eight per cent revenue growth in its energy and commodities unit and “tight fixed cost management”. A company-compiled analyst consensus estimate had forecast an adjusted pretax profit of £156m.
TP ICAP’s stock price hit its highest level since May 2021 following the results, which came alongside the announcement of a £30m share buyback programme to reward investors.
The company also unveiled a new three-year programme to free up at least £50m of surplus cash through more legal entity consolidations and generate at least £50m of annualised cost savings through “more operational efficiency initiatives”.
TP ICAP added that it was considering a US listing for a minority stake in its data and analytics arm Parameta Solutions as it continues to mull spinning out part of the business.
The group has faced shareholder pressure to offload Parameta as part of calls to improve its share price, with Parameta outpacing TP ICAP’s flagship broking business in revenue growth.
TP ICAP’s total revenue rose one per cent in the first half of this year, while Parameta’s fees increased seven per cent.
The firm said its diversification strategy was delivering, with non-broking businesses Liquidnet and Parameta now representing for 37 per cent of the group’s adjusted earnings before tax (EBIT), compared to 23 per cent in 2022.
“Ongoing geopolitical uncertainty should continue to drive volatility that is supportive for global broking and energy & commodities, while the prospect of some interest rate reductions should be positive for Liquidnet,” the firm said.