* H1 operating profit down 25 percent to 144 mln pounds
* Revenue down 14 pct to 746 mln pounds
* CEO Spencer sees no imminent improvement
* Co says cost-cutting plan on track
* Shares down 5.7 percent, hit lowest in 3-1/2 years
(Adds analyst quote, share price)
By Luke Jeffs
LONDON, Nov 14 Brokerage ICAP Plc posted
core profit down by a quarter in the first half and its chief
Michael Spencer warned he saw no immediate improvement in poor
"I do not believe the negative environment will continue
indefinitely but equally I do not expect it to improve
imminently," Spencer said in an emailed statement, as ICAP
warned full-year earnings would be at the low end of the range
of analyst forecasts.
S hares in the company, which ranks as the world's largest
inter-dealer broker, were down 5.7 percent at 292.3 pence by
0907 GMT, having fallen as low as 284.5p, their lowest since
Brokerages such as ICAP and rival Tullett Prebon Plc
make money by matching buyers and sellers of bonds,
currencies and swaps, but they have been hit by a drop in
trading activity as investment banks cut back in the financial
"This has been one of the toughest periods in my 36 year
career in the wholesale financial markets," Spencer said.
"Trading volumes this year have fallen significantly across
nearly all asset classes."
ICAP posted a 25 percent drop in operating profit to 144
million pounds ($228.8 million) in the six months through
September on revenue down 14 percent at 746 million.
The group also said profits for the year to end of March
2013 would be at the lower end of the analyst range of 300
million pounds to 332 million. And some said the group may still
struggle to match that expectation.
"It is going to take a strong pick-up at the start of next
year for them to meet their profit guidance at the lower end of
the analyst range," said Richard Perrott, an analyst at
ICAP pledged drastic cost cuts in June this year and said on
Wednesday this plan was progressing well.
"Our cost reduction programme continues apace and we remain
on track to deliver in excess of 50 million pounds of savings
this year in addition to the 20 million achieved last year,"
The CEO added he had seen "a very significant increase in
activity" on ICAP's next generation swap trading platform,
called i-Swap, and said the company will launch U.S. dollar
interest rate swap broking in 2013.
Tullett Prebon said on Friday its revenue for the four
months through October fell 12 percent due to "challenging"
market conditions, sending its shares down more than 5 percent.
Tullett said in a trading update that revenue of 276 million
pounds ($440.8 million) reflected a particularly slow July and
August, in which its income was down 19 percent on last year.
Tullett shares, which had slumped to a 3-1/2 year low of
227.3p in the wake of the statement, were up 0.4 percent at
230.8p by 0920 GMT.
($1 = 0.6293 British pounds)
(Editing by David Holmes)