* Interdealer broker cutting 210 jobs
* H1 revenue falls 15 percent to 360.3 mln stg
* Underlying profit before tax falls 30 percent to 43.2 mln
(Adds share price, analyst comment, details, background)
By Clare Hutchison
LONDON, July 29 Interdealer broker Tullett
Prebon is cutting around 210 jobs after revenues fell
15 percent in the first half, as the company tries to cut costs
to cope with big changes in its industry where regulators are
cracking down on risk.
Tullett, whose brokers match buyers and sellers of
currencies, bonds and swaps, is cutting around 160 front office
and 50 back office roles from its 2,328-strong workforce. Its
annual fixed costs will be reduced by 40 million pounds ($68
million), rather than the 20 million pounds it anticipated
It is also paying its brokers less. Compensation as a
percentage of broking revenue was 56.7 percent in the first
half, 1.5 percentage points lower than a year ago, the company
said on Tuesday.
Like rival ICAP, which said earlier this month it
was shrinking its voice broking division, Tullett has stepped up
its cost-cutting because of the tough environment.
Revenues have declined as investment banks pull back from
risky trading activities to comply with new rules brought in
after the financial crisis, while ultra-low interest rates have
further reduced banks' scope to trade.
A regulatory push to force more derivatives trading onto
electronic platforms in a bid to make the market more open and
safer has also hit trading volumes.
"The overall level of activity in the financial markets has
been subdued for the last two years reflecting persistently low
volatility, the more onerous regulatory environment for our
customers which has reduced their risk appetite and their
willingness and ability to trade," Tullett said.
"We expect that the benefit of the actions being taken to
further reduce headcount and other fixed costs will be reflected
in the results for the second half of this year," it said,
noting that the annualised operating profit benefit was
estimated to be 35 million pounds.
Tullett shares, which have fallen 35 percent so far this
year, were up 5.5 percent to 252.1 pence at 0956 GMT, against a
0.6 percent higher FTSE index of small- and mid-cap companies
"Tullett Prebon is clearly operating in an extremely
difficult environment but is at least focusing on what it can
actually control," Espirito Santo analyst Phil Dobbin said in a
note to clients.
Tullett earlier reported first half revenue was 360.3
million pounds ($611.5 million), 15 percent lower than a year
earlier. Underlying profit before tax was down more than 30
percent to 43.2 million pounds.
The interim dividend was unchanged at 5.6 pence per share.
Tullett has also been seeking to develop certain parts of
its business to diversify revenue streams. It said in May it had
agreed to buy independent oil broker PVM, one of four major
players in broking over the counter oil products in London. The
deal is awaiting regulatory approval.
It has built up its electronic broking, information sales
and risk management units. Revenue from those operations
accounted for 30 percent of total revenue in the first half,
Tullett's Chief Executive Terry Smith is stepping down at
the end of August. He will be succeeded by former Nomura
and Lehman Brothers executive John
($1 = 0.5885 British Pounds)
(Reporting by Clare Hutchison; Editing by Erica Billingham and