Interdealer broker ICAP Plc (IAP.L,IAPLY.PK,IAPLF.PK) reported Wednesday a decline in profit for the fiscal year 2012, reflecting lower trading volumes amid a difficult economic environment. Meanwhile, the board recommended an increase in final dividend.
Michael Spencer, chief executive officer of the company said, "The fact that we maintained profitability in a year when trading volumes were under such pressure is testament to the effectiveness of our diversified business, our global presence, our people and the actions we took to manage our cost base as market conditions changed."
Announcing its preliminary results, the company said its pre-tax profit for the fiscal year ended March 31, declined to 217 million pounds from 233 million pounds last year. Before acquisition and disposal costs and exceptional items, pre-tax profit was 354 million pounds, up 1 percent from a year ago.
Revenues declined 3 percent to 1.68 billion pounds from 1.74 billion pounds a year ago.
Electronic broking revenue declined 1 percent to 301 million pounds in the year, while Post trade risk and information services revenues increased 13 percent from a year ago.
Voice broking revenues were down 7 percent from last year. Voice revenue fell across all geographic regions, with the Americas declining 10 percent as the credit and rates markets suffered from reductions in volumes, the company stated.
ICAP also saw slow activity in April and early May, reflecting the ongoing euro crisis and regulatory uncertainty that depressed trading volumes.
During the year, the company delivered cost savings of 20 million pounds and expects significant further run-rate savings of at least 50 million pounds per annum by the end of March 2014.
Operating profit margin was 22 percent, unchanged from the prior year.
The board recommended a final dividend of 16 pence per share, up from 14.68 pence paid last year, to shareholders of record on June 29, 2012 payable on July 20. This will result in a full-year dividend of 22.00 pence per share, an increase of 2.05 pence from the previous year.
IAP.L is currently trading at 334 pence, down 1.3 pence or 0.39 percent, on a volume of 804 thousand shares on the LSE.
IAPLY.PK closed Tuesday's regular trading at $10.93.
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