Tp Icap Share Discussion Threads

[spob] 10/7/2018 21:10

just to be clear

not saying it will actually get to £2

just saying I might consider buying IF it does

[spob] 10/7/2018 21:05

I might consider buying at £2 or lower

but will let the dust settle for now

There 'may' be further warnings

[spob] 10/7/2018 21:03

I make that around 28p from Numis

I'll be conservative and stick with my 25p or lower because the ceo sacking suggests things might be worse than they are letting on

[spob] 10/7/2018 20:56

Numis.

Short-term costs associated with Brexit, regulation and IT security are not really a surprise or problem, but forecasts are impacted by the lower synergy targets, higher cost/ income and the need to invest in parts of the business, which lead to a major change to 2019 estimates - early estimate of around a third lower

[spob] 10/7/2018 20:56

Okay, so let's get Tullett out of the way first.

11:23 am
TP ICAP PLC (TCAP:LSE): Last: 267.20, down 153 (-36.41%), High: 321.70, Low: 265.00, Volume: 10.64m
BE

Profit warning, albeit quite mild.


BE

Rather more importantly, the cost guidance for the 2016 acquisition of ICAP's voice broking bit has been fundamentally rebased
11:25 am
BE

And John Phizackerley's off.

BE

I'll let Peel Hunt talk us through the cost stuff, which is the most important stuff.

BE

Although actions taken in H1 have delivered additional synergy savings of c£5m (the annualised run rate is now around £65m), after reassessing integration and ongoing investment needs, management has reduced its annualised synergy target from £100m to £75m by the end of 2019. In addition, 2018 profits will be impacted by additional ongoing costs of c£10m, relating to Brexit, MIFID II, regulatory and legal costs and IT security. Broker compensation is also expected to increase in 2018 from 50.5% in 2017 to at least 51%. Near-term additional UK regulatory capital requirements and the refinancing of the RCF are likely to increase finance costs in 2018 to c£35m.


11:27 am
BE

As a result, EPS for 2018 is expected to be slightly below the bottom end of the range of analyst expectations – we were at the bottom of the range on 34.9p (34.9p to 39.3p) so our reduction will be relatively modest, but the downgrade to consensus is likely to be c7-10%. This will continue into 2019 where the additional ongoing costs will rise to £25m (from £10m in 2017). In addition, TP ICAP plans to make investments of c£15m in Global Broking, Energy & Commodities and the Data & Analytics divisions to accelerate growth. Increased finance costs will move to c£40m in 2019.


BE

Peel Hunt's house broker here, isn't it?

BE

Despite that they had a "reduce" on TP
11:28 am
BE

And Numis.

BE

Short-term costs associated with Brexit, regulation and IT security are not really a surprise or problem, but forecasts are impacted by the lower synergy targets, higher cost/ income and the need to invest in parts of the business, which lead to a major change to 2019 estimates - early estimate of around a third lower

BE

While we are still reviewing our forecasts the likely impact on our 2019 forecasts will be around £107m: costs (Brexit, Reg, IT) +£25m, Investment + £15m, cost income +£32m or 2% move on £1.6bn of revenue, Synergies +£10m (worse than our previous target of £85m) and finance costs +£25m. This represents around a third of our previous forecast of £322m of Adj PBT in 2019, although there will be some benefit from recent $ strength.


11:31 am
BE

And one line from the excellent daily sector wrap put together by FinnCap's Jeremy Grime.
BE

When Theresa May has her bad days she can console herself that she isn’t a voice broking IDB. Its hard to see any catalyst for this one. Only Tradition could come to the rescue but that would be a reverse so the shares will get a lot cheaper over the coming months.


BE

So, yeah, 36% doesn't look too aggressive in that context.
11:31 am

[spob] 10/7/2018 20:25

TP Icap boss sacked as broking giant sheds £700m on warning

by RUSSELL LYNCH

Evening Standard


Broking giant TP Icap took a hammering in the City on Tuesday after it unceremoniously sacked its boss alongside a dire profit warning which slashed more than £700 million off the value of the firm.

Chief executive John Phizackerley, who joined Tullett Prebon in 2014 and oversaw its merger with the voice broking arm of Michael Spencer’s Icap empire in 2016, was ousted last night by chairman Rupert Robson.

The inter-dealer broker dramatically slashed estimated savings via the deal from £100 million to £75 million. Phizackerley said he was “very surprised” by the move.

Shares in TP Icap plunged 127p, or 30%, to 293.2p as TP Icap warned of an extra £10 million in costs this year, coping with challenges such as Brexit and the new Mifid II regime.

It is also being forced to pay bigger salaries to its army of more than 2800 brokers and facing higher capital requirements, meaning profits this year will be even lower than the most pessimistic City forecasts.

Next year the cost pressures intensify and TP Icap plans to spend £15 million on its broking and data and analytics divisions, which insiders say have been starved of investment since the merger.

Robson said the combination of the two companies remains “extremely compelling”.

But he twisted the knife into Phizackerley, saying: “It has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process.”

Phizackerley said he was “proud” of his work and wished the next management team “great success”.

“I was very surprised by the actions of the chairman yesterday particularly in the light of a board meeting we had on June 20 — that was not their position then. I have been let go of with immediate effect and frankly the financial implications are not as interesting to me as my reputation.”

He is likely to get six months of his basic £600,000 annual salary.

Robson is “not on my Christmas card list today”, he added.

Phizackerley — a former senior investment banker with Lehman Brothers — will be succeeded by Nicolas Breteau, the head of TP Icap’s global broking arm and an appointment which should go down well on the trading floor. Brokers had been irked by recent cost-saving drives including limits on client entertaining.

The merger of the two brokers — which sit between investment banks trading large blocks of shares and other securities — was originally driven by rising cost pressures and a squeeze on margins.

[spob] 10/7/2018 20:21

" There is no way the update today warrants a 36% fall. "

Does it warrant sacking the CEO ? LOL

[90paul] 10/7/2018 16:24

I bought @ 421 thought after fall & dir, + 20k may be cheap just average @ 267
hope @ bottom !

[highlands] 10/7/2018 16:20

No one knows this business better than Spencer!

[highlands] 10/7/2018 16:19

Michael Spencer sold out at the peak and others should have followed his lead.

[wllmherk] 10/7/2018 16:14

took some at 272p including costs. Read trading update and thought a fall in the share price justified, but, not -36%. Fortune favours the brave,

wllm :)

[90paul] 10/7/2018 16:10

gosh hope to see director buying overdone perhaps

[bluemango] 10/7/2018 15:27

Agree that once the dust settles a fall of this magnitude looks to be a gross over-reaction.

[eastbourne1982] 10/7/2018 14:49

When there is total gloom it's the time to start buying, I did today and I will look to add.

There is no way the update today warrants a 36% fall.

[shirley83] 10/7/2018 14:28

No recovery just gloom

[tsmith2] 10/7/2018 10:36

would expect US interest, expecting a decent recovery this afternoon..In at 2.75

[eastbourne1982] 10/7/2018 09:34

With the CEO going and the share price crashing this must now be a takeover candidate.

[tsmith2] 10/7/2018 09:23

I would imagine 2019 would be 35-40pbut haven't seen anything yet..

[spob] 10/7/2018 09:09

i say we

but i have no position here

just watching

[spob] 10/7/2018 09:09

are we looking at March 19 eps of around 25p ?

[spob] 10/7/2018 09:06

what will be the new consensus for March 2019 after today ?

[spob] 10/7/2018 09:04

1 Company-derived consensus, taking all analysts who have updated models since the Preliminary Results in March 2018 is for underlying EPS of 37.0p, with a range of 34.9p to 39.0p.

[spob] 10/7/2018 08:58

TP ICAP fires chief Phizackerley as it warns on higher costs

Shares plummet 32% in early trading


Philip Stafford 2 hours ago

FT

Shares in TP ICAP, the largest interdealer broker, fell by 32 per cent after it fired chief executive John Phizackerley and warned it would need to change its targets for integrating its ICAP purchase and raise spending in coming years.

The London broker said on Tuesday it was reducing its annualised cost savings target for 2019 from around £100m to £75m as it needed to invest to meet evolving industry trends. That includes spending on Mifid II, Brexit and legal and IT costs.

The increased finance costs will increase to around £40m in 2019, it added. The previous savings target had been set by Mr Phizackerley as part of the integration of its £1.3bn purchase of the global broking business of ICAP.

The update sent shares in the broker dealer down by as much as 32 per cent in early trading, to 283p a share.

Rupert Robson, chairman, said: “The evolving landscape is driving up costs across our industry. The acquisition of ICAP has given us greater scale to withstand this pressure. However, it has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process.”

Mr Phizackerley told the Financial Times he had been told of the decision only on Monday. He added that it was not the position of the board at its last meeting, in New York, on June 20 when the half-year numbers were discussed. He declined to comment further. He will be replaced by Nicolas Breteau, the group’s head of global broking, subject to regulatory approval.

The statement added that revenues for six months to June 30 were 3 per cent higher than a year earlier, at constant exchange rates.

[eastbourne1982] 10/7/2018 08:57

Bought some at £2.85.