TP ICAP FY2020 Revenue and Operating Profits Slip

The broker is now expecting a lower revenue for the first quarter of 2021.

Interdealer broker, TP ICAP plc (LON: TCAP) announced its annual results for 2020, reporting a slide in its revenue and profits as the long-term impact of COVID-19 gripped its business.

The adjusted revenue of the company declined by 2 percent to £1.79 billion from 2019’s £1.83 billion. Additionally, operating profits went down from £279 million to £272 million, which was a yearly slide of 3 percent. However, the operating profit margin for both years remained the same at 15.2 percent.

The broker-dealer ended the year with a pre-tax profit of £223 million, which is 3 percent down from the previous year’s profit of £230 million.

Additionally, the filing with the London Stock Exchange (LSE) detailed that the company’s global broking revenue declined by 6 percent on a reported basis. However, diversified revenue, which combines its energy & commodities, institutional services, and data & analytics business, jumped by 6 percent.

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An Impressive Year Turned the Other Way

Similar to other financial service providers, TP ICAP’s business jumped in the first quarter of 2020 due to the impact of the Coronavirus spurring the economic lockdown, increasing trading markets. However, its business corrected sharply over the next consecutive quarters, resulting in an overall decline in revenue.

The company has now issued a warning on a lower 2021 first-quarter revenue as 2020 saw an excellent first quarter but did not end well.

Meanwhile, last year remained eventful for the interdealer broker. First, it confirmed the acquisition deal of Liquidnet, for which it had to raise around £315 million with rights issues, and then had to restructure its business to save its interests following Brexit.

“2020 was a transformational year for TP ICAP,” Nicolas Breteau, CEO of TP ICAP, said in a statement. “We set out a new strategy to deliver higher shareholder returns and made good progress in executing initiatives across all of our businesses to advance our strategic pillars of electronification, aggregation and diversification.”

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