REG - TP ICAP Group plc - Final Results
11/03/2025 07:15
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RNS Number : 0972A TP ICAP Group plc 11 March 2025
TP ICAP Group plc
LEI: 2138006YAA7IRVKKGE63
11 March 2025
TP ICAP Group plc ('TP ICAP' or the 'Group')
Financial and preliminary management report for the year ended 31 December
2024
Nicolas Breteau, CEO of the Group, said:
"We delivered record profits in 2024. Group adjusted EBIT(1) increased by
12%(2) (+8% in reported currency) to £324m, while reported EBIT increased by
89% to £236m. All divisions traded well, with Group revenue up 5% (+3% in
reported currency), underlining the power of our diversified business, and the
continued delivery of our strategy.
We are progressing strategic options for Parameta Solutions. Our focus is a
listing in the United States, with the Group maintaining a majority stake.
Should we proceed, with no certainty we will do so, the listing could occur as
early as Q2 2025. Our priority is to create sustainable shareholder value and
retain, for the long-term, the majority of any upside potential, while
providing Parameta with a greater ability to grow on a standalone basis.
We will today launch our fourth £30m buyback, with a total of £120m
completed or announced in the past 18 months. Our focus on productivity,
contribution, and balance sheet optimisation, means we now expect to generate
substantial cash over the medium-term. An update on the surplus cash to be
made available to shareholders over time will be provided at our Interim
Results, on 6 August 2025. In addition, should it go ahead, we would expect to
return most of the proceeds of any Parameta listing to our shareholders.
We look to the future with confidence. Our market-leading broking businesses
are well positioned to capitalise on ongoing market volatility. Our focus on
diversification presents real opportunities, including the ongoing turnaround
at Liquidnet and the upside potential at Parameta Solutions. We aim to grow
our business, invest in key franchises, and return more cash to shareholders."
Financial highlights
Adjusted results (excluding significant items - see income statement in
Financial and Operating Review).
2024 2023 2023 Reported change Constant currency(2) change
Reported currency (restated) constant currency
Revenue £2,253m £2,191m £2,142m 3% 5%
EBITDA(1) £398m £372m £359m 7% 11%
EBIT(1) £324m £299m £289m 8% 12%
EBIT Margin(1) 14.4% 13.6% 13.5% 0.8%pts 0.9%pts
Adjusted profit before tax(1) £303m £271m 12%
Attributable earnings £241m £227m 6%
Basic EPS 31.8p 29.2p 9%
1. Refer to appendix - Alternative Performance Measures.
2. In constant currency, which refers to prior year comparatives being
retranslated at current year foreign exchange rates.
Statutory results:
2024 2023 Reported
Reported currency (restated) change
Revenue £2,253m £2,191m 3%
EBIT £236m £125m 89%
Profit before tax £214m £96m 123%
Attributable earnings £167m £74m 126%
Basic EPS 22.1p 9.5p 133%
Weighted average shares in issue (basic) 756.9m 777.7m (3%)
A table reconciling Reported to Adjusted figures is included in the Financial
and Operating Review. The percentage movements referred to in the highlights,
CEO Review and the performance analysis below, are in constant currency
(unless stated otherwise). This is to reflect the underlying performance of
the business, before the impact of foreign exchange movements year-on-year.
Constant currency refers to prior year comparatives being retranslated at
current year foreign exchange rates. Approximately 60% of the Group's revenue
and approximately 40% of costs are US Dollar denominated.
Strong performance, all divisions trading well, tight cost management
• Group revenue up 5% (+3% in reported currency);
• Global Broking revenue increased 4% (+1% in reported currency). Strong H2
momentum: up 7%;
• Energy & Commodities revenue increased by 2% (+1% in reported currency)
following a strong 2023. Revenue base grew 22% in last two years;
• Record Liquidnet revenues: up 15% (+12% in reported currency). Strong Equities
performance, largest part of business, up 18%. Multi-Asset Agency Brokerage(3)
increased 10%;
• 2023 reported EBIT restated to £125m from £128m to reflect reclassification
of foreign exchange gains on non-GBP borrowings and related derivatives to net
finance expenses (adjusted EBIT restated to £299m from £300m).
• Parameta Solutions grew revenue by 8% (+5% in reported currency);
• Tight fixed cost control: Group management & support costs(4) broadly flat
despite inflationary pressures, ongoing investment programme;
• Strong cash conversion(5): 144% (2023: 124%).
Record profits, substantial contribution from non-broking businesses,
including Liquidnet
• Group adjusted EBIT up 12% (+8% in reported currency) to £324m. £53m from
Liquidnet as division's turnaround gathered pace (2023: £9m(6));
• Diversification delivering: Liquidnet and Parameta Solutions accounted for 42%
of Group adjusted EBIT (2023: 29%);
• Adjusted EBIT margin increased to 14.4% (2023: 13.5%(6));
• Reported EBIT grew 89% to £236m (2023 restated: £125m(7)); reported EBIT
margin of 10.5% (2023: 5.7%).
Dynamic capital management: more debt paydown, dividends, new buyback
• c. £100m debt/financing obligations paydown; leverage ratio(8) decreased from
1.9x to 1.6x;
• Board recommending a final dividend per share of 11.3 pence, up 13% (2023:
10.0 pence). Total full year dividend of 16.1 pence, up 9% (2023: 14.8 pence);
• Launching today, fourth £30m buyback programme in c. 18 months.
3. Multi-asset (equity derivatives, rates, futures and advisory services) Agency
Execution offering, including COEX
4. Partners, MidCap Partners, and Relative Value desks.
5. Excluding foreign exchange gains and losses.
6. Defined as: Free cash flow divided by adjusted earnings attributable to the
equity holders of the parent.
7. In constant currency.
8. 2023 reported EBIT restated to £125m from £128m to reflect reclassification
of foreign exchange gains on non-GBP borrowings and related derivatives to net
finance expenses (adjusted EBIT restated to £299m from £300m).
Strategic highlights
Diversification delivering
Parameta Solutions
Potential US listing
• Progressing options in relation to Parameta Solutions. Focus is a US listing
and maintaining a majority stake in the long-term, while keeping other options
open;
• Diversification delivering: Liquidnet and Parameta Solutions accounted for 42%
of Group adjusted EBIT (2023: 29%);
• Rationale for potential listing include:
For TP ICAP:
º Establishing baseline value of the business for TP ICAP shareholders;
º Would expect to return most of the proceeds of any Parameta listing to our
shareholders;
º Majority of future potential value upside would indirectly accrue to TP ICAP
shareholders;
º Underpins close relationship with Group's broking businesses, through
exclusive, long-term agreements, providing an annual income stream for TP
ICAP.
For Parameta Solutions:
º Enables Parameta Solutions to invest to grow, both organically and
inorganically, with TP ICAP shareholders indirectly benefiting;
º Potential opportunities for Parameta to obtain additional data sources from
other OTC market participants;
º Enhanced visibility in the marketplace for both Parameta Solutions and its
products, including enhancing its ability to attract and retain high-calibre
talent.
• Listing of minority stake could occur as early as Q2 2025, though there is no
certainty of proceeding.
Business developments
• New management team: CEO Silvina Aldeco-Martinez (previously at Morningstar,
S&P Global); CFO Chantal Wessels (formerly at Nasdaq, Thomson Reuters);
• Growth in direct distribution: 22% of 2024 revenue (2023: 19%, 2022: 15%);
• Innovative offerings (evidential data solutions, indices) account for 10% of
division's revenue (2023: 6%).
Liquidnet
• Increasing market share in US(9) and EMEA(10): number one share in EMEA 5x LIS
('Large-in-Scale')(11);
• Enhanced operational gearing: 14% reduction in total management & support
costs; 31% reduction in last two years;
• Key product launches:
º New SuperBlock™ proposition aimed at large/illiquid trades, a growing
segment;
º Multi-asset offering: range of asset classes through a single desk.
Energy & Commodities
• Focus on Energy Transition
º Major agreement with Amazon Web Services:
• To co-develop sustainability-focused trading solutions;
• Support Amazon suppliers to create decarbonisation plans, aligned with its
2040 net zero carbon ambition;
º Battery Metals desk launched.
• Enhanced bench strength:
º David Silbert, formerly Head of Commodities at Deutsche, and CEO at Trailstone
Group, leading US business;
º Joachim Emmanuelson, former partner at SCB, heading up EMEA;
º Tom Fox-Hughes promoted to CEO of APAC.
9. Source: Financial Industry Regulatory Authority ('FINRA').
10. Source: Bloomberg.
11. The European Securities and Markets Authority (ESMA) defines "Large in Scale"
('LIS') as thresholds that exempt large trades from certain pre-trade
transparency requirements under MiFID II. For highly liquid stocks, the
threshold is typically set at €100k or more; for less liquid stocks, the
threshold is typically €500k or more.
Dynamic capital management
The Group expects to generate substantial organic cash in the medium-term. For
business investment, debt reduction, dividend policy, more capital returns.
Organic cash generation
• Focus on productivity, contribution, and balance sheet optimisation: expect to
generate substantial cash in medium-term, in addition to previously announced
£50m (legal entity consolidation);
• Committed to releasing more cash for ongoing business investment, including
targeted M&A, where appropriate, debt reduction and further capital
returns;
• An update on the surplus cash to be made available to shareholders over time
will be provided at our Interim Results, on 6 August 2025.
Use of proceeds from potential Parameta listing
• Would expect to return most proceeds of any Parameta listing to TP ICAP
shareholders;
• We do not anticipate any impact on the Group's dividend policy, in the event
Parameta is listed.
Transforming
Fusion
• Roll-out well advanced;
• Significant Fusion-related strategic collaboration with Amazon Web Services:
º More than halving new product development times; and
º Nearly doubling TP ICAP's IT workload on Cloud to > 80%.
Future-proofing our business: operational and IT excellence
• £50m annualised cost savings targeted by 2027; with £70m investment to
deliver efficiencies;
• Key levers: real estate optimisation, IT consolidation, vendor management
etc.;
• Transformation Office established, extensive planning stage well advanced.
Outlook
As is always the case, our outlook is largely subject to market conditions.
Geopolitical tension, and the uncertain outlook for trade policies, inflation,
as well as interest rate movements, should continue to drive volatility that
is supportive for our business.
The movement in foreign exchange rates, particularly Sterling vs US Dollar
(60% of Group revenue/40% of Group costs are US Dollar-denominated) will
continue to impact our results - with US Dollar strengthening having a
positive impact, and vice versa.
Against this backdrop, we will remain focused on executing our three strategic
pillars, namely transformation, diversification, and dynamic capital
management. We anticipate remaining well placed to deliver sustainable
shareholder value over the medium-term.
Subject to movements in foreign exchange rates, the Board is comfortable with
current 2025 market expectations for adjusted EBIT.
2024 results presentation
The Group will hold an in-person presentation and Q&A at 09:00 GMT today,
11 March 2025, in the Peel Hunt auditorium at 100 Liverpool Street, London,
EC2M 2AT. For those unable to attend in person, the presentation will also be
broadcast via a live video webcast.
A recording of the presentation will also be available via playback on our
website after the event at
https://tpicap.com/tpicap/investors/reports-and-presentations
(https://tpicap.com/tpicap/investors/reports-and-presentations) .
Forward looking statements
This document contains forward looking statements with respect to the
financial condition, results and business of the Group. By their nature,
forward looking statements involve risk and uncertainty and there may be
subsequent variations to estimates. The Group's actual future results may
differ materially from the results expressed or implied in these
forward-looking statements.
Enquiries:
Group Company Secretary
Vicky Hart
Email: companysecretarial@tpicap.com (mailto:companysecretarial@tpicap.com)
Analysts and investors
Dominic Lagan
Direct: +44 (0) 20 3933 0447
Email: dominic.lagan@tpicap.com (mailto:dominic.lagan@tpicap.com)
Media
Richard Newman
Direct: +44 (0) 7469 039 307
Email: richard.newman@tpicap.com (mailto:richard.newman@tpicap.com)
About TP ICAP
• TP ICAP connects buyers and sellers in global financial, energy and
commodities markets.
• We are the world's leading wholesale market intermediary, with a portfolio of
businesses that provide broking services, data & analytics and market
intelligence, trusted by clients around the world.
• We operate from more than 60 offices across 28 countries, supporting brokers
with award-winning and market-leading technology.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CEO REVIEW
Introduction
Our objective is to deliver sustainable shareholder value.
We do so through leveraging our strong franchises and delivering our strategy:
diversification, dynamic capital management, and transformation.
We are making good progress delivering our strategy: record profits, a strong,
broad-based performance across the Group, surplus cash being returned to
shareholders, and a range of major initiatives in place to generate more
shareholder value.
Now is an appropriate time to review our progress in 2024, including how we
have furthered the delivery of our strategic agenda.
Delivering in 2024
Market developments
Interest rates in Western countries remained at higher levels than many market
commentators expected. Stubborn inflation, particularly services-related, is
influencing the approach taken by central banks. The UK only cut rates twice
in 2024 after they had moved up to a 16-year high. Bond yields in many Western
countries have increased: the markets are taking stock of the significant
increase in bond issuance to fund higher public debt levels. Movements in
interest rates, and bond yields, are an important driver of activity for
Rates, our largest Global Broking franchise.
2024 was the election year par excellence. Elections were held in countries
accounting for roughly 49% of the world's entire population(12). While we
won't see this level of electoral activity in 2025, or the associated market
volatility, there is a growing view that volatility per se is becoming more
embedded. The UK regulator has noted that market events that might have
occurred just once in a decade are now happening more frequently. "Predictable
volatility", as it has been termed, is a trend to be closely monitored; it
may, in some circumstances but not all, be beneficial to our broking
businesses.
Several forces - geopolitical pressures, demand for Oil and Gas, and the
Energy Transition - are driving profound change in the energy sector. The
International Energy Agency believes we are moving towards the "age of
electricity". Oil and Gas demand will only moderate after 2030, and then not
by a great deal(13). Demand for critical metals, a key facilitator of the move
to more electricity, could double by 2030(13). Our Energy & Commodities
(E&C) division has launched a Battery Metals desk, led by the leading
broker in this sector.
2024 was a much better year for equities - a pleasing development for
Liquidnet. Following the US Presidential Election, November was the biggest
month for inflows into US equity funds since 2000(14). The institutional
commission wallet is growing: global commissions were up 11%(15) in September
year-to-date. Uncertainty around interest rates, and the impact of other US
policies like tariffs, will be important drivers for equity markets in 2025.
Demand for financial markets data is substantial and projected to grow(16).
Drivers include the need for financial institutions to underpin their
decision-making and risk systems, with high-quality, insightful data. Annual
global spend on financial markets data reached a record $42bn in 2023(16);
asset management and fixed income are the main sectors expected to drive
growth in the short term(16).
12. Source: TIME Magazine, The Ultimate Election Year: All the Elections Around
the World in 2024.
13. Source: International Energy Agency ('IEA'), World Energy Outlook, October
2024.
14. Source: Bank of America Global Fund Manager Survey.
15. Source: McLagan data, comparing Q3 2024 YTD with Q3 2023 YTD.
16. Source: Burton Taylor Consulting, Financial Market Data/Analysis Global Share
& Segment Sizing 2024.
Business performance
Group revenues increased by 5%(17), building on last year's performance.
Global Broking revenue was up 4%, including a particularly strong second-half
(+7%). We maintained our market-leading position, and leveraged Fusion.
Liquidnet's turnaround gathered pace: revenues were up a record 15%. Equities,
the biggest part of the division, increased revenues by 18%; at the
Multi-Asset Agency Brokerage(18) revenues were up 10%. Parameta Solutions
delivered an 8% increase in revenues. Following an exceptionally strong 2023,
when E&C grew revenues by 18%, growth came in this year at 2%. The
division has increased revenues by 22% in two years, underlining the strength
of its franchise.
All our divisions are market leaders. Parameta, with an estimated 70%(19)
market share of the OTC data market, has a business model distinguished by 97%
subscription revenue and very high client renewal rates (98%). Liquidnet has
recorded revenue growth for seven consecutive quarters in its key Equities
business. The business ranked number one by market share (up 11%) in the EMEA
5x LIS ('Large-in-Scale') segment(20), and number two (up 15%) in the US
Agency Alternative Trading Systems ('ATS') market(21).
Record profits, substantial contribution from non-broking businesses, tight
cost management
The Group adjusted EBIT(22) margin increased to 14.4% (2023: 13.5%(23)).
Adjusted EBIT was up by 12%, or 8% in reported currency, to £324m, a record
for the Group. Reported EBIT, including significant items, grew by 89% to
£236m (2023 restated: £125m(24)).
Three key factors drove the increase in our profits: revenue growth, continued
tight cost control, and the Liquidnet turnaround. Group management and support
costs were flat, despite inflation, and ongoing investment. Liquidnet recorded
a substantial increase in profitability driven by market share gains, enhanced
operational gearing, and growing revenues. The division contributed £53m of
adjusted EBIT for the year (2023: £9m(23)), or 16% of Group adjusted EBIT.
Our non-broking businesses accounted for 42% of adjusted EBIT (2023: 29%).
17. All percentage movements within the CEO review are in constant currency,
unless otherwise indicated.
18. 1 Multi-asset (equity derivatives, rates, futures and advisory services)
Agency Execution offering, including COEX
19. Partners, MidCap Partners, and Relative Value desks.
20. Considering 2023 data revenues from TP ICAP's peers: Fenics, TraditionData,
and Marex.
21. Source: Bloomberg. The European Securities and Markets Authority (ESMA)
defines "Large in Scale" (LIS) as thresholds that exempt large trades from
certain pre-trade transparency requirements under MiFID II. For highly liquid
stocks, the threshold is typically set at €100k or more; for less liquid
stocks, the threshold is typically €500k or more.
22. Source: Financial Industry Regulatory Authority ('FINRA').
23. Refer to appendix - Alternative Performance Measures.
24. In constant currency.
Diversification delivering
Parameta Solutions
Strategic developments
Maximising the value of our strategic assets is a key priority.
As previously announced, we are progressing strategic options in relation to
Parameta Solutions.
Our focus is a potential listing in the United States ('US'), with the Group
maintaining a long-term majority stake. Should we proceed, the potential
listing could occur as early as Q2 2025. There is, of course, no certainty
about a listing, or its location.
The rationale for a possible listing, while keeping other value recognition
options open, includes the potential to establish a baseline value for our
shareholders now. We know from our engagement with many of our shareholders
who actively manage their portfolios that this is a key factor. A minority
listing would also mean that the majority of any potential future upside would
indirectly accrue to TP ICAP shareholders - another key consideration.
A listing could enable Parameta Solutions to invest to grow, both organically
and inorganically, through access to financial resources beyond those
available to the Group, with our shareholders indirectly participating in any
such growth. Comprehensive, exclusive, long-term agreements would underpin the
close relationship between our broking businesses and Parameta Solutions,
providing us with a valuable annual cash income stream. Our intention, which
will be finalised in due course, is for the term of these agreements to be 30
years. Finally, we believe Parameta Solutions would have another meaningful
opportunity to grow by obtaining access to data from other OTC market
participants.
Turning to the potential location for any listing, for several reasons our
focus is on the US. Firstly, business model. While Parameta is a global
business, its business model is US-oriented: approximately 93% of its revenues
are USD-denominated. Secondly, liquidity: the US has the deepest, most liquid
public markets. Thirdly, market fit. The US is home to many of Parameta's
quoted peers and a greater concentration of relevant research analysts.
We will update on our progress in relation to Parameta Solutions, as and when
appropriate, to the extent that we are able to do so within the applicable
legal constraints.
Business developments
The financial data market is large and projected to grow(25). We believe that
greater regulatory complexity, and the increasing use by clients of benchmarks
and indices, may also drive the development of this market.
Parameta Solutions has a clear strategy. Firstly, it is enhancing its
distribution. About 78% of the division's 2024 revenue originated from
third-party channels; an increasing proportion (22%) is being generated from
direct channels like the cloud and industry standard feeds. Initiatives
include Fusion Connect, the newest direct delivery channel. Secondly, Parameta
is providing more innovative offerings: evidential data solutions, indices
etc. They already account for 10% of the division's overall revenues. In
addition, new data sets are being packaged and monetised, including the
break-even Inflation Swap Index series, iron ore, and US oil. Finally, the
business is winning more buy-side clients by enlarging the salesforce and
leveraging a more focused account management structure.
Parameta Solutions offers its clients 35 years of data underpinned by
long-term, exclusive Market Data Licensing Agreements with both Global Broking
and E&C.
25. Source: Burton Taylor Consulting, Financial Market Data/Analysis Global Share
& Segment Sizing 2024
Liquidnet
Liquidnet, a multi-asset, agency execution specialist operating in 57 equity
markets, provides the Group with client (buyside) and product diversification
(Cash Equities). The division is focused on enhancing its operational
leverage, diversifying the core equity franchise, and developing its
fast-growing Multi-Asset Agency Brokerage business.
Greater profitability driven by enhanced operational leverage and market share
gains
Liquidnet's adjusted EBIT margin increased from 2.9% in 2023 to 15.0% in 2024,
driven by more cost reduction, substantial revenue growth, and significant
market share gains.
We have reshaped the business: a 14% reduction in management and support costs
in 2024 brings the total reduction over the past two years to 31%. We took
advantage of that leaner cost base, alongside better market conditions, to
deliver record revenues, including a strong performance by Equities, the
biggest part of the division.
Enhancing the Equities franchise
Liquidnet is diversifying its Equities proposition. This means leveraging the
market-leading block trading and dark pool equities franchise to expand in
algorithmic and programme trading. We completed the largest ever Dark Pool
trade in Europe, followed by a record block trade in Hong Kong.
The average cash weightings held by institutions in 2024 fell to their lowest
level since 2001(26). Against that backdrop, we launched new, innovative
products: Superblock, a solution for clients who wish to trade exceptionally
large, illiquid blocks in a controlled environment; SmartDark, an algorithm to
help traders execute larger trades with better price stability.
Building the Multi-Asset Agency Brokerage business
Multi-Asset (non-cash equity) is a significant, and growing, market segment,
especially for hedge funds. Barclays Research estimates that Multi-Asset funds
have grown annually by about 19% compared to 3% for hedge funds. Liquidnet
capitalised on this trend, launching a new single-desk proposition providing
multi-asset liquidity from across the Group, and bespoke trading tools.
Revenues at the Multi-Asset Agency business are up 22% in two years, and now
account for 42% of the division's overall revenue base. We see more
opportunities to grow through a follow-the-sun model, and leveraging our
extensive geographical footprint.
26. Source: Bank of America Global Fund Manager Survey.
Energy & Commodities
Profound change underway
The energy sector is going through profound change. As the pre-eminent OTC
energy broker, we expect to benefit by (a) growing our current main businesses
(Oil, Power, and Gas). (b) growing Energy Transition products like renewables
and (c) monetising data in conjunction with Parameta Solutions.
The scale of the changes is exemplified by two key points. Global Liquefied
Natural Gas ('LNG') capacity, a key transition fuel, is by 2030 expected to
grow by 50%(27), a substantial increase. Global electricity use is forecast,
over the next ten years, to grow each year by the equivalent of Japan's annual
demand(27), the fourth largest economy in the world.
Our brokers, who provide the full suite of products, are well equipped to
assist their clients through these major changes.
We announced a major agreement with Amazon Web Services ('AWS') to (a)
co-develop sustainability-focused trading solutions and (b) support Amazon's
suppliers to create decarbonisation plans aligned with its 2040 net-zero
carbon ambition. Coupled with our focus on Norwegian and Australian Renewable
Energy Certificates ('RECs'), we are developing tools to create additional
liquidity in key markets like the US. The overall REC market is expected to
grow 28% a year, reaching over $80bn by 2030(28).
Alongside our substantial presence in the North American and European markets,
we are expanding in APAC, where we acquired Aotearoa Energy, a leading Power,
Gas and Renewables broker in New Zealand, complementing our well-developed
Australian franchise. The New Zealand Emissions Trading Scheme was set up in
2007 and, after the EU, is the oldest in the world(29).
27. Source: International Energy Agency ('IEA'), World Energy Outlook, October
2024.
28. Source: Research and Markets, Renewable Energy Certificates Market, 2023.
29. Source: Elsevier, Energy Economics, August 2023.
Dynamic capital management
2024 Developments
About 18 months ago, we launched our first ever buyback programme (£30m).
Since then, including another £30m buyback announced today, the Group has
completed, or announced, £120m of buybacks. The Board is also recommending a
final dividend per share of 11.3 pence (up 13%). This would bring the total
dividend to 16.1 pence per share, up 9% (2023: 14.8p). The final dividend will
be paid to eligible shareholders on 23 May 2025, with an ex-dividend and
record date of 10 April 2025 and 11 April 2025, respectively. Shareholders
appreciate this combination of dividends and capital returns.
Continued debt reduction is another important priority. We paid down
approximately £100m of our debt/financing obligations and our leverage
ratio(30) reduced from 1.9x in 2023 to 1.6x in 2024.
Overall approach
We are committed to releasing more cash for ongoing business investment,
including targeted M&A, where appropriate, debt reduction and further
capital returns. We continue to invest in our business: broker recruitment,
Fusion, Liquidnet, and Parameta Solutions.
In the short-term, in relation to inorganic cash generation, we would expect
to return most of the proceeds of any possible Parameta listing to our
shareholders, while retaining the majority upside potential through our
long-term ownership of this asset. In addition, we do not anticipate any
impact on the Group's dividend policy, in the event Parameta is listed.
In the medium-term, through organic means, we anticipate generating
substantial cash, in addition to the previously announced £50m we expect to
release through our legal entity consolidation initiative (see above). An
update on the surplus cash to be made available to shareholders over time will
be provided at our Interim Results, on 6 August 2025.
Generating substantial cash in the medium-term
Our confidence in our ability to generate substantial cash organically in the
medium term, and share it with our shareholders, can be attributed to several
factors.
We have benefited a great deal from our Jersey redomicile; it enabled the
creation of a series of specific opportunities to free up cash. In addition,
our focus on productivity and contribution, coupled with a positive outlook
for our business, means we will continue to prioritise profitable growth, and
cash flows, in the future.
Our previously announced three-year programme - legal entity consolidations
and operational efficiencies - is progressing well. We have already realised
£15m of annualised savings in 2024 through the operational and IT excellence
initiative (see Transformation below). Work is well underway on our legal
entity consolidation initiative.
30. Total debt (excluding finance lease liabilities) divided by adjusted EBITDA as
defined by our rating agency, Fitch.
Transformation
Enhanced bench strength
We are enhancing our bench strength as we transform the Group.
New senior leadership is in place at Parameta Solutions. Silvina
Aldeco-Martinez became CEO in March, joining us from PitchBook Data, a
Morningstar division, where she was CEO of Leveraged Commentary and Data.
Chantal Wessels was appointed CFO having previously been at Nasdaq and Thomson
Reuters. Silvina and Chantal have significant experience in data, analytics,
and business development.
The Energy Transition is replete with opportunity for our E&C business.
Joachim Emanuelsson, a founding partner at SGB, an environmental markets
brokerage, is now leading our EMEA business. David Silbert was appointed to
lead our US franchise having previously been Global Head of Commodities at
Deutsche Bank and CEO at Trailstone Group. Tom Fox-Hughes was promoted to CEO
of APAC.
Liquidnet Fixed Income
A changing market: our opportunity
Our Liquidnet electronic credit trading platform covers Primary and Secondary
Markets, offering a range of trading protocols, including Dark Pool and
Request-For-Quote (RFQ). The business is organised by asset class and led by
Global Broking, enabling it to leverage the division's extensive connectivity
and sell-side relationships.
Electronification is taking hold: around 65% of US Treasuries, a key asset
class, are now traded electronically; half that volume is coming through
RFQ(31).
The market for electronically traded corporate bonds is also growing. As of
the end of November 2024, 43% of total volume traded in both investment-grade
and high-yield bonds was executed electronically(32), compared with
approximately 19% and 2% respectively in 2015(33).
Our New Issue Trading protocol had a record year. Volumes on the platform,
which is integrated with Fusion, saw significant growth, with over 470 buy-
and sell-side users submitting approximately $16bn of firm, actionable
liquidity - an increase of circa 2.6x compared to 2023. Other initiatives
included advancing the rollout of Fusion for dealers and partnering with
Boltzbit, a Gen AI solutions specialist, enabling us to rapidly receive,
process, and display newly announced bond deals.
Fusion
Fusion, our flagship digital platform, provides best in class functionality
for our clients, and connectivity to our deep liquidity.
Technology is a strategic advantage for us, and key to our client engagement.
We are building on that advantage through a major agreement with Amazon Web
Services ('AWS'), the world's leading cloud provider. With them, we will
accelerate the development of Fusion, halving new product development times,
and nearly doubling our IT workload on the cloud. We will leverage AWS's
generative AI capabilities, like Amazon Bedrock, to increase productivity and
better respond to client needs, and establish an AI and Innovation Lab to
scale and accelerate solutions.
We see more opportunities to employ Fusion to assist clients with regulatory
supervision, a growing area. Fusion generates high-quality data insights,
which our collaboration with AWS should enhance, and which Global Broking is
sharing with Parameta Solutions through their Market Data Licensing Agreement.
Operational and IT excellence
A major operational and IT excellence initiative is in place alongside our
focus on more legal entity consolidations (see Dynamic Capital Management).
This change initiative, generating at least £50m in annualised savings over
three years, will future-proof our business: we will be more agile and faster
at rolling out new products and initiatives. Key levers include real estate
optimisation (the footprint has reduced by 30% since 2021), technology
consolidation, our operating model, vendor management, and procurement.
We are making good progress. Detailed bottom-up planning is well underway; a
Transformation Office is in place. Technology is at the heart of our
transformation. Our IT function will become a value enabler: we are
simplifying our processes and plan to reduce the number of IT applications by
about 20%. More cloud migration, and a greater focus on engineering
excellence, are integral to the programme.
31. Source: Federal Reserve Bank of New York, All-to-All Trading in the U.S.
Treasury Market, November 2024.
32. Source: Crisil Coalition Greenwich: December Spotlight: Corporate Bond Market
Sees Liquidity Improve in Record Year.
33. Source: Crisil Coalition Greenwich: September Spotlight: Corporate Bond
E-Trading on a Roll.
Outlook
As is always the case, our outlook is largely subject to market conditions.
Geopolitical tension, and the uncertain outlook for trade policies, inflation,
as well as interest rate movements, should continue to drive volatility that
is supportive for our business.
The movement in foreign exchange rates, particularly Sterling vs US Dollar
(60% of Group revenue/40% of Group costs are US Dollar-denominated) will
continue to impact our results - with US Dollar strengthening having a
positive impact, and vice versa.
Against this backdrop, we will remain focused on executing our three strategic
pillars, namely transformation, diversification, and dynamic capital
management. We anticipate remaining well placed to deliver sustainable
shareholder value over the medium-term.
Subject to movements in foreign exchange rates, the Board is comfortable with
current market expectations for 2025 adjusted EBIT.
Nicolas Breteau
Executive Director and Chief Executive Officer
11 March 2025
Financial and operating review
All percentage movements quoted in the analysis of financial results that
follow are in reported currency, unless otherwise stated.
Introduction
The Group had a record 2024, achieving a 3% increase in full year revenue to
£2,253m (+5% in constant currency). This strong performance was driven across
all divisions trading well and complemented by tight cost control.
Liquidnet reported a record 12% increase in revenue (+15% in constant
currency), capitalising on improved equity markets and delivering significant
market share gains. Equities, the largest part of the division, increased
revenue by 15%. This strong revenue performance combined with a 14% reduction
in management and support costs (excluding depreciation and amortisation),
have significantly enhanced the operational leverage of Liquidnet, resulting
in a record adjusted EBIT(1) of £53m and 15.0% margin, compared to £10m and
3.2% in 2023.
Parameta Solutions reported a 5% revenue growth (+8% in constant currency), as
it continues to expand its product offerings and broaden its client base,
through the strength of its distribution network.
Global Broking, which contributed 57% of the Group's revenue in 2024,
delivered revenue growth of 1% (+4% in constant currency), with a stronger
revenue performance in the second half of the year, as the division benefited
from greater market volatility. Energy & Commodities delivered 1% revenue
growth (+2% in constant currency), consolidating on the strong prior year that
saw double digit growth across Oil, Power and Gas, compared with 2022.
Our focus on continued cost discipline, enhanced broker productivity (average
revenue per broker +9% in constant currency) and Liquidnet's turnaround, led
to an increase in the Group's adjusted EBIT to £324m and an improved margin
of 14.4% (2023(2): £299m and 13.6%).
The Group incurred significant items of £91m pre-tax (2023: £180m), of which
around 60% were non-cash (2023: 85%). Consequently, the Group's reported EBIT
grew 89% to £236m (2023(2): £125m).
We are managing our capital dynamically. The Group reduced gross debt by
c.£80m in the year resulting in an improved leverage ratio(3) of 1.6x,
compared with 1.9x in 2023. We delivered strong cash generation, with a cash
conversion ratio(4) of 144% (2023: 124%). A three-year programme launched in
2024 to release at least £50m of surplus cash through legal entity
consolidations, and a further £50m in annualised cost savings through
operational efficiencies, is progressing well. In 2024, we started to realise
benefits from these initiatives to moderate inflationary pressures. In the
past 12 months, the unrestricted cash(5) has increased by c.£70m, which is
after the majority of two £30m buybacks, an increase in the total dividend
and operational efficiencies programme investment. We have announced a further
share buyback programme of £30m, our fourth in 18 months, demonstrating our
commitment to return surplus capital to shareholders. Finally, in line with
our dividend policy, the Board is proposing a final dividend of 11.3 pence per
share representing a full year 2024 dividend of 16.1 pence per share, up 9%.
Robin Stewart
Executive Director and Chief Financial Officer
11 March 2025
1. Refer to appendix - Alternative Performance Measures.
2. 2023 adjusted EBIT restated to £299m from £300m to reflect reclassification
of FX gains on non-GBP borrowing and related derivatives to net finance
expense. Reported EBIT restated to £125m from £128m.
3. Total debt (excluding finance lease liabilities) divided by 12 months adjusted
EBITDA as defined by our Rating Agency.
4. Defined as: Free cash flow divided by adjusted earnings attributable to the
equity holders of the parent.
5. Unrestricted cash includes cash required for working capital purposes, and
cash in excess of that required for regulated capital and liquidity
requirements, show capital/settlement cash and collateral .
Key financial and performance metrics
£m 2024 2023 2023 Reported Constant
reported currency constant currency currency
currency
change
change
restated(3) restated(3)
Revenue 2,253 2,191 2,142 3% 5%
Reported
- EBIT 236 125 123 89% 92%
- EBIT margin 10.5% 5.7% 5.7% +4.8%pts +4.8%pts
Adjusted(1)
- Contribution 867 848 829 2% 5%
- Contribution margin 38.5% 38.7% 38.7% (0.2)%pts (0.2)%pts
- EBITDA 398 372 359 7% 11%
- EBIT 324 299 289 8% 12%
- EBIT margin 14.4% 13.6% 13.5% +0.8%pts +0.9%pts
Average:
- Broker headcount 2,542 2,556 2,556 (1%) (1%)
- Revenue per broker(2) (£'000) 732 716 669 2% 9%
- Contribution per broker(2) (£'000) 265 268 250 (1%) 6%
Period end:
- Broker headcount 2,572 2,523 2,523 2% 2%
- Total headcount 5,270 5,179 5,179 2% 2%
1. 'Adjusted' is one of the alternative performance measures ('APM') which is
useful to enhance the understanding of business performance. Refer Income
statement section below for details.
2. Revenue per broker and contribution per broker are calculated as external
revenue and contribution of Global Broking, Energy & Commodities and
Liquidnet (excluding the acquired Liquidnet platform) divided by the average
broker headcount for the year.
3. 2023 reported EBIT restated to £125m from £128m to reflect reclassification
of FX gains on non-GBP borrowing and related derivatives to net finance
expense (adjusted EBIT restated to £299m from £300m).
Income statement
While not a substitute for reported IFRS, management believe adjusted figures
provide relevant information to better understand the underlying business
performance. These adjusted measures, and other alternative performance
measures ('APMs'), are also used by management for planning purposes and to
measure the Group's performance.
2024 Adjusted Significant Reported
items
£m
Revenue 2,253 - 2,253
Employment, compensation and benefits (1,396) (8) (1,404)
General and administrative expenses (467) (35) (502)
Depreciation and impairment of PPE and ROUA (42) (6) (48)
Amortisation and impairment of intangible assets (32) (42) (74)
Operating expenses (1,937) (91) (2,028)
Other operating income 10 - 10
- FX (5) - (5)
- Other items 3 3 6
Other gains/(losses) (2) 3 1
EBIT 324 (88) 236
Net finance expense (21) (1) (22)
Profit before tax 303 (89) 214
Tax (80) 17 (63)
Share of net profit of associates and joint ventures 21 (2) 19
Non-controlling interests (3) - (3)
Earnings 241 (74) 167
Basic average number of shares (millions) 756.9 - 756.9
Basic EPS (pence per share) 31.8 - 22.1
Diluted average number of shares (millions) 785.7 - 785.7
Diluted EPS (pence per share) 30.7 - 21.3
2023 restated Adjusted restated Significant Reported restated(2)
items
£m
Revenue 2,191 - 2,191
Employment, compensation and benefits (1,354) (6) (1,360)
General and administrative expenses (469) (38) (507)
Depreciation and impairment of PPE and ROUA (45) (11) (56)
Amortisation and impairment of intangible assets (28) (130) (158)
Operating expenses (1,896) (185) (2,081)
Other operating income 14 8 22
- FX (11) 3 (8)
- Other items 1 - 1
Other gains/(losses) (10) 3 (7)
EBIT 299 (174) 125
Net finance expense (28) (1) (29)
Profit before tax 271 (175) 96
Tax (67) 27 (40)
Share of net profit of associates and joint ventures 25 (5) 20
Non-controlling interests (2) - (2)
Earnings 227 (153) 74
Basic average number of shares (millions) 777.7 - 777.7
Basic EPS (pence per share) 29.2 - 9.5
Diluted average number of shares (millions) 794.2 - 794.2
Diluted EPS (pence per share) 28.6 - 9.3
1. Significant items are categorised, as per details in the Significant items
section.
2. Prior year numbers have been restated to reflect net £4m FX loss in reported
currency, from General and administrative expenses to net finance expense on
retranslation of non-GBP cash and operating assets and liabilities (£3m gains
Reported, £1m gains Adjusted and £2m gains in Significant items) and to
Other gains/(losses) on fair value gains/(losses) of assets and liabilities
(£7m losses Reported, £10m losses Adjusted and £3m gains in significant
items). Reported EBIT decreased by £3m (£1m losses in Adjusted and £2m
losses in Significant items).
All percentage movements quoted in the analysis of financial results that
follow are in constant currency, unless otherwise stated. Constant currency
refers to prior year comparatives being retranslated at current year foreign
exchange rates to support comparison on an underlying basis.
Revenue by division
Total Group revenue in 2024 reached £2,253m, a 5% increase over the prior
year (+3% in reported currency). Global Broking revenue rose by 4% (+1% rise
in reported currency), after a slow first quarter, as the division regained
momentum following persistent geopolitical uncertainties, leading to an
increase in trading volumes across all regions, particularly benefiting the
Rates, FX and Money Markets businesses. Energy & Commodities revenue
increased by 2%, driven by continued demand for energy sources in Oil, Power
and Gas. Liquidnet's revenue grew significantly by 15% as it benefited from
the recovery in equity markets, increased volatility from global elections
and growth in market share. Parameta Solutions revenue increased by 8%,
benefiting from increased demand for over-the-counter data, the expansion of
its product offerings, diversification of its client base and higher client
retention rates.
2024 2023 2023 Reported Constant
currency
currency
change
change
£m (reported (constant
currency)
currency)
By business division
Rates 574 566 551 1% 4%
FX & Money Markets 318 312 306 2% 4%
Equities 241 237 233 2% 3%
Credit 117 121 118 (3)% (1)%
Inter-division revenue(1) 24 22 22 9% 9%
Global Broking 1,274 1,258 1,230 1% 4%
Energy & Commodities 458 455 447 1% 2%
Inter-division revenue(1) 3 3 3 0% 0%
Energy & Commodities 461 458 450 1% 2%
Liquidnet 354 315 308 12% 15%
Data & Analytics 191 185 179 3% 7%
Inter-division revenue(1) 7 4 4 75% 75%
Parameta Solutions 198 189 183 5% 8%
Inter-division revenue(1) (34) (29) (29) 17% 17%
Total revenue 2,253 2,191 2,142 3% 5%
1. Inter-division revenues have been recognised in Global Broking, Energy &
Commodities and Parameta Solutions to reflect the value of proprietary data
provided to Parameta Solutions and services it supplies to the other
divisions. The inter-division revenue and inter-division costs are eliminated
upon the consolidation of the Group's financial results.
Operating expenses
The table below sets out operating expenses, divided principally between front
office costs and management and support costs. Front office costs tend to have
a large variable component directly linked to the output of our brokers. The
largest element of this is broker compensation and other front office costs,
which include travel and entertainment, telecommunications and information
services, clearing and settlement fees as well as other direct costs. The
remaining cost base represents the management and support costs of the Group.
£m 2024 2023 2023 Reported Constant
(reported currency) (constant currency) currency currency
change
change
restated(2) restated(2)
Front office costs
- Global Broking 781 762 745 2% 5%
- Energy & Commodities 319 304 298 5% 7%
- Liquidnet 218 207 202 5% 8%
- Parameta Solutions 72 71 69 1% 4%
Total front office costs(1) 1,390 1,344 1,314 3% 6%
Management and support costs
- Employment costs 333 319 314 4% 6%
- Technology and related costs 90 93 92 (3)% (2)%
- Premises and related costs 27 29 29 (7)% (7)%
- Depreciation and amortisation 74 73 70 1% 5%
- Other administrative costs 23 38 38 (40)% (40)%
Total management and support costs 547 552 543 (1)% 1%
- Significant items 91 185 183 (51)% (50)%
Total operating expenses 2,028 2,081 2,040 (3)% (1)%
1. Includes all front office costs, including broker compensation, sales
commission, travel and entertainment, telecommunications, information
services, clearing and settlement fees as well as other direct costs.
2. Prior year numbers have been restated to reflect net £4m FX loss in reported
currency, from Other administrative costs to net finance expense on
retranslation of non-GBP cash and operating assets and liabilities (£3m gains
Reported, £1m gains Adjusted and £2m gains in Significant items) and to
Other gains/(losses) on fair value gains/(losses) of assets and liabilities
(£7m losses Reported, £10m losses Adjusted and £3m gains in significant
items).
Total front office costs increased by 6% to £1,390m (+3% on a reported
currency) compared with 2023, in line with the increase in revenue. Total
management and support costs of £547m were flat despite inflationary
pressures, reflecting our commitment to cost control.
Total operating expenses decreased by 1% to £2,028m (-3% in reported
currency) driven by the reduction in significant items costs, which was offset
by the increase in front office costs.
The Group continues to focus on cost management to drive sustained value
creation through operational efficiency. The change initiatives announced in
August 2024 and focusing on technology and data, target operating model,
procurement and vendor management, and real estate optimisation will deliver
annual run-rate cost savings of £50m by 2027. These savings will help us
moderate the impact of inflationary pressure over the period. We are on track
to deliver the efficiency initiatives, targeting actions that will achieve
more than half of the annualised cost savings by 2026.
FX gains/(losses) are reported separately from the total operating expenses,
to better reflect the underlying nature of these costs. Refer to the income
statement section for details.
Capital and liquidity management
Capital management
The Group is committed to releasing cash for further capital returns, debt
reduction, and ongoing business investment, including targeted M&A, where
appropriate.
We launched a third £30m buyback programme in August, which was completed in
January 2025. We are announcing another £30m buyback programme, bringing the
total share buybacks to £120m since the first announcement of the programme
in August 2023.
Our focus on strategic financial management has led to a £70m increase in
unrestricted cash in 2024, which is after the majority of two £30m share
buybacks, an increase in the final dividend and investment into the
operational efficiencies programme. The Group debt and other financing
obligations also reduced by c.£100m over the past 18 months. This helped
lower our net finance costs and improved our investment grade headroom.
The gross debt to EBITDA leverage ratio is now 1.6x, lower than the 1.9x
reported in our full year 2023 results.
Liquidity management
The Group successfully extended the £350m syndicated Revolving Credit
Facility ('RCF') to May 2027. Additionally, in March 2024, the Yen RCF, with a
Japanese strategic partner, increased from ¥10bn to ¥20bn and extended to
August 2026, enhancing our liquidity management and financial flexibility.
Significant items
Significant items distort comparisons due to their size, nature or frequency
and are therefore excluded from adjusted performance measures in order to
provide better understanding, comparability and predictability of the
underlying trends of the business, to arrive at adjusted operating and profit
measures.
Significant items are categorised as below:
Restructuring and related costs
Restructuring and related costs arise from initiatives to reduce the ongoing
cost base and improve efficiency to enable the delivery of our strategic
priorities. These initiatives are significant in size and nature to warrant
exclusion from adjusted measures. Costs for other smaller scale restructuring
are retained within both reported and adjusted results.
Disposals, acquisitions and investments in new businesses
Costs and any income related to disposals, acquisitions and investments in new
business are transaction dependent and can vary significantly year-on-year,
depending on the size and complexity of each transaction. Amortisation of
purchased and developed software is contained in both the reported and
adjusted results as these are considered to be core to supporting the
operations of the business.
Impairment
The Group conducts its goodwill, intangible asset and investments in
associates and joint ventures impairment test annually in September, or more
frequently if indicators of impairment exist. Impairment assessments are
performed by comparing the carrying amount of assets or cash generating units
('CGUs'), with its recoverable amount. Judgement is involved in estimating the
future cash flows and the rates used to discount these cash flows.
Legal and regulatory matters
Costs, and recoveries, related to certain legal and regulatory cases are
treated as significant items due to their size and nature. Management
considers these cases separately due to the judgements and estimation
involved, the costs and recoveries of which could vary significantly
year-on-year.
The table below shows the significant items in 2024 versus 2023, of which
around 60% of the total 2024 costs are non-cash (2023: 85%).
£m 2024 2023
Restructuring and related costs
- Property rationalisation(1) 4 15
- Liquidnet integration - 9
- Group cost saving programme(2) 10 2
Subtotal 14 26
Disposals, acquisitions and investment in new business
- Amortisation of intangible assets arising on consolidation 42 44
- Liquidnet acquisition related - 10
- Strategic project costs(3) 20 -
- Deferred consideration - (3)
Subtotal 62 51
Legal and regulatory matters - subtotal(4) 8 11
Impairment of goodwill and intangible assets
- Liquidnet impairment of goodwill - 47
- Liquidnet impairment of customer relationship - 39
Subtotal - 86
Other Significant Item
- Auditor transition fees(5) 4 -
Subtotal 4 -
Total pre-financing cost 88 174
- Interest on VLN's, amortisation of discount on deferred consideration and 1 1
GIP provision
Total post-financing cost 89 175
- Associate impairment 2 5
Total post-financing cost and impairment 91 180
- Tax relief (17) (27)
Total 74 153
1. Includes costs to rationalise our US property footprint.
2. Includes costs on the operational efficiencies programme launched in 2024.
3. Project costs in relation to assessment of Parameta Solutions strategic
options.
4. Includes costs related to significant legal proceedings and regulatory
matters.
5. Reflects external auditor transition related costs.
Net finance expense
The adjusted net finance expense of £21m (reported £22m) is £7m lower
compared with 2023 due to an increase in interest income, leveraging a
favourable interest rate environment.
Tax
The effective rate of tax on adjusted earnings is 26.4% (2023: 24.7%). This is
lower than our guidance due to one-off credits on finalisation of the tax
position for earlier years. The effective rate of tax on reported earnings is
29.4% (2023: 41.7%).
Basic EPS
The average number of shares used for the 2024 basic EPS calculation is 756.9m
(2023: 777.7). This is based on:
- 788.7m shares in issue as at 31 December 2023;
- Plus 5.0m of time-apportioned issuance of new shares;
- Less 9.6m held by the Group's Employee Benefit Trust ('EBT') comprised of 9.5m
shares at 31 December 2023, and the time-apportioned movements of 0.1m during
2024;
- Less 27.2m of treasury shares acquired through the share buyback programme
comprised of 16.6m at 31 December 2023, and the time-apportioned movements of
10.6m during 2024.
The Group's EBT has waived its rights to dividends.
The reported basic EPS for 2024 was 22.1 pence (2023: 9.5 pence) and adjusted
basic EPS for 2024 was 31.8 pence (2023: 29.2 pence).
Dividend
The Board is recommending a final dividend for 2024 of 11.3 pence. Together
with the interim dividend of 4.8 pence, this results in a total dividend for
the year of 16.1 pence, an increase of 9% from the previous year. This
recommendation aligns with the Group's dividend policy, which targets a
dividend cover of approximately 2x on adjusted post-tax earnings. The final
dividend will be paid on 23 May 2025 to shareholders on the register at close
of business on 11 April 2025. The ex-dividend date will be 10 April 2025.
The Company offers a Dividend Reinvestment Plan ('DRIP'), where dividends can
be reinvested in further TP ICAP Group plc shares. The DRIP election cut-off
date will be 1 May 2025.
Guidance for 2025
- The Group is comfortable with the current market expectations for adjusted
EBIT, subject to FX movements, as we expect cost savings from the operational
efficiency program to moderate the impact of inflation;
- Group net finance expense in the range of £30m to £35m, as we expect to
refinance our bond that matures in 2026;
- Group effective tax rate on adjusted earnings to return to normalised level of
c.28%;
- Significant items are expected to be c.£115m before tax and excluding
potential income and costs associated with legal and regulatory matters. This
will be driven by the costs of delivering operational efficiencies and costs
relating to the strategic options being pursued for Parameta Solutions;
- Dividend cover of c.2x adjusted post-tax earnings
Parameta Solutions medium-term outlook
- Should we proceed with the listing of Parameta Solutions, our intention would
be to return most of the proceeds to our shareholders;
- We do not anticipate any impact on the Group's dividend policy, in the event
Parameta Solutions is listed;
- Revenue growth rates expected to rise low to mid teens(1) by 2027;
- Adjusted EBITDA(2) margin expected to reduce temporarily to mid-30s in
2025-26, following incremental investment in the business, and then rise to
around 40% by 2027.
Substantial medium-term cash generation
- Over the medium term, we expect to generate substantial cash organically, in
addition to previously announced £50m through legal entity consolidation;
- We will achieve this by focusing on productivity, contribution, and balance
sheet optimisation;
- We expect to provide an update on surplus cash generation at the Interim
Results in August.
1. In constant currency.
2. In the event that we proceed with the listing of Parameta Solutions, adjusted
EBITDA would exclude share-based payments and significant items, but would
also include incremental costs of being a listed business. Accordingly, on a
proforma basis, Parameta Solutions' 2024 margin would be around 2 percentage
points lower than that reported for 2024.
Performance by primary operating segment (divisional basis)
The Group presents below the results of its business by primary operating
segment with a focus on revenue and APMs used to measure and assess
performance.
2024
Corp/
£m GB(1) E&C(1) LN PS(1) Elim Total
Revenue:
- External 1,250 458 354 191 - 2,253
- Inter-division(1) 24 3 - 7 (34) -
1,274 461 354 198 (34) 2,253
Total front office costs:
- External (781) (319) (218) (72) - (1,390)
- Inter-division(1) (7) - - (27) 34 -
(788) (319) (218) (99) 34 (1,390)
- Other gains/(losses) 4 - - - - 4
Contribution 490 142 136 99 - 867
Contribution margin 38.5% 30.8% 38.4% 50.0% n/a 38.5%
Net management and support costs:
- Management and support costs (253) (76) (75) (13) (56) (473)
- Other gains/(losses) - - - - (6) (6)
- Other operating income 2 - - - 8 10
Adjusted EBITDA 239 66 61 86 (54) 398
Adjusted EBITDA margin 18.8% 14.3% 17.2% 43.4% n/a 17.7%
- Depreciation and amortisation (34) (10) (8) (3) (19) (74)
Adjusted EBIT 205 56 53 83 (73) 324
Adjusted EBIT margin 16.1% 12.1% 15.0% 41.9% n/a 14.4%
Average broker headcount 1,802 602 138 - - 2,542
Average sales headcount - - 110 - - 110
Revenue per broker (£'000)(4) 707 766 1,137 - - 732
Contribution per broker (£'000)(4) 272 236 290 - - 265
2023 (constant currency)
Corp/
£m GB(1) E&C(1) LN PS(1) Elim Total
Revenue:
- External 1,208 447 308 179 - 2,142
- Inter-division(1) 22 3 - 4 (29) -
1,230 450 308 183 (29) 2,142
Total front office costs:
- External(2) (745) (298) (202) (69) - (1,314)
- Inter-division(1) (4) - - (25) 29 -
(749) (298) (202) (94) 29 (1,314)
- Other gains/(losses)(2) 1 - - - - 1
Contribution 482 152 106 89 - 829
Contribution margin 39.2% 33.8% 34.4% 48.6% n/a 38.7%
Net management and support costs:
- Management and support costs(3) (254) (74) (85) (11) (50) (473)
- Other gains/(losses)(3) 1 - - (1) (10) (11)
- Other operating income 3 1 - - 10 14
Adjusted EBITDA 232 79 21 77 (50) 359
Adjusted EBITDA margin 18.9% 17.6% 6.8% 42.1% n/a 16.8%
- Depreciation and amortisation (30) (8) (12) (2) (18) (70)
Adjusted EBIT(3) 202 71 9 75 (68) 289
Adjusted EBIT margin 16.4% 15.8% 2.9% 41.0% n/a 13.5%
Average broker headcount 1,815 599 142 - - 2,556
Average sales headcount - - 107 - - 107
Revenue per broker (£'000)(4) 678 749 1,009 - - 669
Contribution per broker (£'000)(4) 266 252 244 - - 250
2023 (reported currency, restated)
Corp/
£m GB(1) E&C(1) LN PS(1) Elim Total
Revenue:
- External 1,236 455 315 185 - 2,191
- Inter-division(1) 22 3 - 4 (29) -
1,258 458 315 189 (29) 2,191
Total front office costs:
- External(2) (762) (304) (207) (71) - (1,344)
- Inter-division(1) (4) - - (25) 29 -
(766) (304) (207) (96) 29 (1,344)
- Other gains/(losses)(2) 1 - - - - 1
Contribution 493 154 108 93 - 848
Contribution margin 39.2% 33.6% 34.3% 49.2% n/a 38.7%
Net management and support costs:
- Management and support costs(3) (259) (75) (87) (14) (44) (479)
- Other gains/(losses)(3) - - - - (11) (11)
- Other operating income 3 1 - - 10 14
Adjusted EBITDA 237 80 21 79 (45) 372
Adjusted EBITDA margin 18.8% 17.5% 6.7% 41.8% n/a 17.0%
- Depreciation and amortisation (31) (9) (11) (2) (20) (73)
Adjusted EBIT(3) 206 71 10 77 (65) 299
Adjusted EBIT margin 16.4% 15.5% 3.2% 40.7% n/a 13.6%
Average broker headcount 1,815 599 142 - - 2,556
Average sales headcount - - 107 - - 107
Revenue per broker (£'000)(4) 681 759 972 - - 716
Contribution per broker (£'000)(4) 272 257 262 - - 268
GB = Global Broking; E&C = Energy & Commodities; LN = Liquidnet; PS
= Parameta Solutions, Corp/Elim = Corporate Centre, eliminations and other
unallocated costs.
1. Inter-division charges have been made by Global Broking and Energy &
Commodities to reflect the value of proprietary data provided to the Parameta
Solutions division. The Global Broking inter-division revenue and Parameta
Solutions inter-division costs are eliminated upon the consolidation of the
Group's financial results.
2. Prior year reported numbers have been restated to reflect £1m
reclassification of fair value gains on trading derivatives from external
costs to Other gains/(losses) in front office costs.
3. Prior year numbers have been restated to reflect net £4m FX loss in reported
currency, from Management and support costs to net finance expense on
retranslation of non-GBP cash and operating assets and liabilities (£3m gains
Reported, £1m gains Adjusted and £2m gains in Significant items) and to
Other gains/(losses) on fair value gains/(losses) of assets and liabilities
(£7m losses Reported, £10m losses Adjusted and £3m gains in significant
items). Reported EBIT decreased by £3m (£1m losses in Adjusted and £2m
losses in Significant items).
4. Revenue per broker and contribution per broker are calculated as external
revenue and contribution of Global Broking, Energy & Commodities and
Liquidnet (excluding the acquired Liquidnet platform) divided by the average
brokers for the year. The Group revenue and contribution per broker excludes
revenue and contribution from Parameta Solutions and Liquidnet Division.
Global Broking
Global Broking's revenue of £1,274m, which represents 57% of total Group
revenue, increased by 4% in constant currency (+1% in reported currency).
Market volatility picked up in the second half of the year, driven by
geopolitical and economic factors, notably the US election, and high levels of
government indebtedness, which supported trading activity in Rates, FX and
Money Markets.
Rates revenue of £574m, representing 45% of Global Broking and 25% of Group,
saw continued growth in Asia and Europe, while the Americas maintained strong
results against an exceptional prior period. FX & Money Markets revenue
increased by 4% driven by strong growth in Asia and Europe. Credit revenue
decreased by 1%. Equities revenue increased by 3% against the prior year,
aligning to improved market conditions.
Front office costs, most of which are variable with revenue were 5% higher
(+3% in reported currency). Consequently, the contribution margin dropped
marginally to 38.5% from 39.2%.
The division maintained its market-leading position. Revenue per broker
increased by 4%, as we continue to focus on broker productivity.
Management and support costs, including depreciation and amortisation and net
of other operating income, increased by 2% to £285m, driven by increased
investment in the deployment of our electronic platform, Fusion.
Adjusted EBIT was £205m, with a margin of 16.1%, 0.3%pts lower than the prior
period (2023: £202m and 16.4% in constant currency, £206m and 16.4% in
reported currency), as the division continues to invest in transforming the
business through technology.
Energy & Commodities
Energy & Commodities revenue increased to £461m, accounting for 20% of
total Group revenue. A 2% rise over the prior period (+1% in reported
currency) was driven by gains across its major asset classes, Oil, Power, and
Gas fuelled by ongoing geopolitical uncertainty. Oil demand decreased,
especially in China, while supply remained relatively high, keeping prices
within a narrow range. Gas prices were stable in 2024, with demand driven by
Asia. The Power sector was supported by a rebound in electricity demand. The
Asia and Europe regions saw a significant increase (12% and 6% respectively)
in revenues compared to the prior year, while the Americas faced challenging
market opportunities in a highly competitive environment, resulting in a 7%
decrease.
Front office costs increased by 7% to £319m, driven by continued competition
for broker talent amid high levels of activity in the sector, leading to a
decrease in the contribution margin to 30.8% from 33.8% in the prior year.
Revenue per broker increased by 2% compared to the prior year.
Management and support costs, including depreciation and amortisation and net
of other operating income, increased by 6% to £86m, driven by investment in
the deployment of our electronic platform, Fusion. As a result, the adjusted
EBIT fell by 20% to £56m, achieving a margin of 12.1% (2023: £71m and 15.8%
in constant currency, £71m and 15.5% in reported currency).
Liquidnet(1)
Liquidnet's revenue increased significantly to £354m, and now represents 16%
of total Group revenue. Revenue was 15% higher (+12% in reported currency),
driven by strong momentum in the core equities franchise as well as favourable
volatile market conditions in the Relative Value business. Institutional block
market activity benefited from increased activity arising from falling
inflation and the expectation of interest rate cuts.
Equity market conditions improved significantly compared to the prior year as
inflation subsided, global elections increased volatility levels and clients
reallocated to equities. As a result, institutional activity increased
compared to the prior year. The global commission wallet increased by 11%
year-on-year while total revenue for Liquidnet Equities grew 18%,
outperforming the market. Revenues in block trading further increased by 23%
underpinned by significant block market share gains. In the US, ATS block
market share increased by 4%, to 28% and in EMEA, the LIS market share
increased by 4% to 40%, compared with 2023. Block market volumes also rose
across all regions. In the US, block market volumes by the top five Agency
Alternative Trading System ('ATS') venues were up 28% compared with 2023. In
EMEA, the Large in Scale transactions ('LIS') volumes were up 28% in 2024. In
Australia, the Block Market was up 23%.
The Relative Value businesses continued to benefit from the interest rate and
political environments, reporting strong 25% growth.
Front office costs of £218m were 8% higher than prior period, aligning with
the revenue growth. The contribution margin for Liquidnet improved to 38.4%
from 34.4%.
Management and support costs, including depreciation and amortisation, net of
other operating income, totalled £83m for the year, which was 14% lower than
the prior year, driven by the outcome of targeted cost reduction initiatives
and tight cost management over the last three years.
This enhanced operational leverage resulted in the adjusted EBIT and margin
increasing more than fivefold to £53m and 15.0%, (2023: £9m and 2.9% in
constant currency, £10m and 3.2% in reported currency).
Parameta Solutions
Parameta Solution's revenue of £198m, constituting 9% of total Group revenue,
increased by 8% compared with the prior year (+5% in reported currency). This
growth was driven by both indicative pricing data and innovative offerings,
benefiting from the substantial demand for financial markets data.
Subscription-based recurring revenue as a percentage of total revenue was 97%
(up from 96% in the prior year), with Annual Recurring Revenue (ARR) growing
by 9% year-on-year. This demonstrates our ability to retain, upsell, and grow
our revenue from the existing client base. Growth was particularly strong
across EMEA, with increased revenue from both buy-side and sell-side clients.
We continued to expand our indicative pricing data service with 20 new product
launches. This includes the first environmental offerings in Energy &
Commodities, where we have introduced Guarantees of Origin and US Carbon
Pricing.
Contribution margin increased to 50.0%, up +1.4%pts (+0.8%pts in reported
currency) primarily driven by increased revenues.
Management and support costs, including depreciation and amortisation, net of
other operating income increased by £2m to £16m. As part of establishing
Parameta Solutions as an increasingly independent entity, the increase in
costs are essential to enhance independent governance and drive the
performance and efficiency of operations.
The adjusted EBITDA was £86m, with a margin of 43.4%, an increase of 1.3%pts
from the prior year.
Adjusted EBIT was £83m, with a margin of 41.9%, 0.9%pts higher than the prior
year (2023: £75m, and 41.0% in constant currency, £77m and 40.7% in reported
currency).
1. The Liquidnet division comprises of the Liquidnet platform, COEX Partners,
ICAP Relative Value and MidCap Partners businesses..
Cash flow
The table below shows the changes in cash and debt for the years ending 31
December 2024 and 31 December 2023.
2024 2023
restated(1)
EBIT reported 236 125
Depreciation, amortisation and other non-cash items 152 229
Movement in working capital
- change in net Matched Principal balances 46 (20)
- change in net stock lending balances (38) (4)
- change in other working capital balances 71 108
Income taxes paid:
- periodic tax paid (52) (57)
- accelerated tax paid - (32)
Net interest and loan facility fees paid (23) (33)
Capital expenditure (64) (55)
Dividends received from associates and joint ventures 20 22
Dividends paid to non-controlling interests (2) (2)
Free Cash Flow(2) 346 281
Receipt UK pension surplus, net of pension tax payment - 30
Sale/(purchase) of financial assets 24 (19)
Net other investing activities 1 8
Deferred consideration paid on prior year acquisitions (50) (1)
Dividend paid to TP ICAP shareholders (113) (99)
Share buyback (48) (29)
Net borrowings (76) 39
Payment of lease liabilities (27) (29)
Other financing activities (11) (10)
Total other investing and financing activities (300) (110)
Change in cash 46 171
Foreign exchange movements 1 (40)
Cash at the beginning of the year 1,019 888
Cash at the end of the year 1,066 1,019
1. 2023 reported EBIT restated to £125m from £128m to reflect reclassification
of FX gains on non-GBP borrowing and related derivatives to net finance
expense.
2. Refer to appendix - Alternative Performance Measures.
The Group's net cash balance of £1,066m, increased by £47m in the year.
Free cash flow is presented to show a more sustainable view of cash generation
and to better understand the conversion of adjusted earnings into cash. This
measure reflects the cash and working capital efficiency of the Group's
operations, and aligns tax with underlying items and interest received with
the operations of the Group.
We delivered strong cash generation with a free cash flow of £346m
representing a 144% conversion of adjusted attributable earnings into cash
(2023: 124%). This includes a temporary cash inflow of £46m from Matched
Principal trade settlement balances, offset by temporary outflow of £38m from
increase in stock lending balance. Other working capital inflow of £71m
(2023: £108m) is driven by higher payables and other accruals resulting from
increased trading activity. Tax payments are lower than the prior year, which
included £32m of accelerated payments.
Total other investing and financing activities includes a £50m payment of
Liquidnet deferred consideration, £48m outflow from the share buyback
programmes announced in March 2024 and August 2024, £113m outflow from
increased dividends paid in 2024 (2023: £99m), £76m outflow from repayment
of the remaining £37m of 2024 Sterling Notes and £39m Liquidnet Vendor Loan
Notes and £24m inflow arising mainly from maturity of UK Gilts, no longer
required to support trade settlement following legal entity rationalisation.
Debt finance
The composition of the Group's outstanding debt is summarised below.
At 31 December At 31 December
2024 2023
£m £m
5.25% £247m Sterling Notes January 2024(1) - 37
5.25% £250m Sterling Notes May 2026(1) 251 250
2.625% £250m Sterling Notes November 2028(1) 249 249
7.875% £250m Sterling Notes April 2030(1) 251 251
Sub Total 751 787
Revolving credit facility drawn - Totan - -
Revolving credit facility drawn - banks - -
3.2% Liquidnet Vendor Loan Notes - 40
Overdrafts 2 10
Debt (used as part of net (funds)/debt) 753 837
Lease liabilities 221 251
Total debt 974 1,088
1. Sterling Notes are reported at their par value net of discount and unamortised
issue costs and including interest accrued at the reporting date.
The Group's total debt, excluding lease liabilities, reduced to £753m from
£837m as at 31 December 2024. This resulted mainly from the repayment of the
remaining £37m of the 2024 Sterling Notes and the Liquidnet Vendor Loan
Notes.
The Group's £350m main bank revolving credit facility, maturing in May 2027,
and the ¥20bn Totan facility, maturing in August 2026, were both undrawn as
at the year end.
Exchange rates
The income statements and balance sheets of the Group's businesses whose
functional currencies are not GBP are translated into GBP at average and
period end exchange rates respectively. The most significant currencies for
the Group are the USD and the Euro. The financial statements for 2024 were
prepared using the average and period end exchange rates listed below.
In 2024, foreign exchange translation negatively impacted the Group's P&L.
The average exchange rates for GBP against USD and EUR were higher than 2023,
adversely affecting the Group's trading performance, with around 60% of
Group revenue and 40% of costs in USD. The overall strengthening of GBP,
against currencies in which the Group operates, over the 12 month period
resulted in a total £6m loss in the P&L (2023: £11m loss) from the
retranslation of non-GBP cash, borrowings and related derivatives and
operating assets and liabilities. The FX loss on retranslation of non-GBP
borrowings and related derivatives amounting to £1m in 2024 (2023: £3m gain)
is reflected in net finance expense, to better reflect the nature of these
costs.
Average Period end
2024 2023 2024 2023
US Dollar $1.28 $1.24 $1.25 $1.27
Euro €1.18 €1.15 €1.21 €1.15
Regulatory capital
The Group's regulated broking entities are obliged to meet the prudential
regulatory requirements imposed by the local regulator of the jurisdiction in
which they operate. The Group maintains an appropriate excess of financial
resources in such regulated entities to support capital, liquidity and credit
needs.
The FCA is the lead regulator of the Group's UK businesses, for which the
capital adequacy requirements under the Investment Firms Prudential Regime
('IFPR') apply. This sub-group maintains an appropriate excess of financial
resources.
Climate change considerations
We are committed to the ongoing assessment and management of climate risks and
opportunities. As part of this work, we incorporate climate change
considerations into our financial planning processes to monitor the impacts of
climate-related issues on our financial performance and position. In 2023, we
completed a detailed qualitative, and quantitative, climate scenario analysis
to deepen our understanding of how climate-related issues could affect the
Group and its finances. The analysis was reviewed for appropriateness in 2024
and concludes that the Group is not expected to be materially impacted
financially by climate change over the time frames and climate scenarios
considered. We will keep this analysis under review in line with regulatory
and stakeholder expectations.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Consolidated Income Statement
for the year ended 31 December 2024
2024 2023
(restated)(1)
Notes £m £m
Revenue 3 2,253 2,191
Employment, compensation and benefits (1,404) (1,360)
General and administrative expenses (502) (507)
Depreciation of property, plant and equipment and ROUA (42) (45)
Impairment of property, plant and equipment and ROUA (6) (11)
Amortisation of intangible assets (72) (72)
Impairment of Intangible assets (2) (86)
Total operating costs 4 (2,028) (2,081)
Other operating income 5 10 22
Other gains/(losses) 6 1 (7)
Earnings before interest and tax 236 125
Finance income 7 42 34
Finance costs 8 (64) (63)
Profit before tax 214 96
Taxation (63) (40)
Profit after tax 151 56
Share of results of associates and joint ventures 19 20
Profit for the year 170 76
Attributable to:
Equity holders of the parent 167 74
Non-controlling interests 3 2
170 76
Earnings per share
- Basic 9 22.1p 9.5p
- Diluted 9 21.3p 9.3p
1. As set out in Note 2(d) the Group changed its accounting policy regarding the
presentation of certain gains and losses previously reported within 'General
and administrative expenses'. These items are now reported within 'Other
gains/(losses)' and 'Finance costs'. For 2023 there is no overall change to
Profit before tax, with Total operating costs reducing by £4m, Earnings
before interest and tax reducing by £3m and Finance costs reducing by £3m
against those items previously reported.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
£m £m
Profit for the year 170 76
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit pension schemes - 46
Equity investments at fair value through other comprehensive income 5 -
Taxation - (16)
5 30
Items that may be reclassified subsequently
to profit or loss:
(Loss)/gain on translation of foreign operations (7) (83)
Taxation - 2
(7) (81)
Other comprehensive (loss)/income for the year (2) (51)
Total comprehensive income for the year 168 25
Attributable to:
Equity holders of the parent 168 24
Non-controlling interests - 1
168 25
Consolidated Balance Sheet
as at 31 December 2024
2024 2023
Notes £m £m
Non-current assets
Intangible assets arising on consolidation 11 1,567 1,605
Other intangible assets 134 110
Property, plant and equipment 80 92
Investment properties 3 12
Right-of-use assets 122 136
Investment in associates 49 51
Investment in joint ventures 31 38
Other investments 18 19
Deferred tax assets 17 41
Retirement benefit assets 2 3
Other long-term receivables 27 33
2,050 2,140
Current assets
Trade and other receivables 12 2,998 2,279
Financial assets at fair value through profit or loss 13 171 569
Financial investments 17 160 189
Cash and cash equivalents 17 1,068 1,029
4,397 4,066
Total assets 6,447 6,206
Current liabilities
Trade and other payables 14 (3,067) (2,372)
Financial liabilities at fair value through profit or loss 13 (189) (541)
Loans and borrowings 15,17 (9) (93)
Lease liabilities 17 (31) (28)
Current tax liabilities (39) (35)
Short-term provisions 18 (17) (14)
(3,352) (3,083)
Net current assets 1,045 983
Non-current liabilities
Loans and borrowings 15,17 (744) (744)
Lease liabilities 17 (190) (223)
Deferred tax liabilities (24) (51)
Long-term provisions 18 (34) (31)
Other long-term payables (22) (5)
Retirement benefit obligations (3) (4)
(1,017) (1,058)
Total liabilities (4,369) (4,141)
Net assets 2,078 2,065
Equity
Share capital 199 197
Other reserves (1,049) (963)
Retained earnings 2,910 2,814
Equity attributable to equity holders of the parent 2,060 2,048
Non-controlling interests 18 17
Total equity 2,078 2,065
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
Equity attributable to equity holders of the parent
Share Re- Re- Hedging Treasury Own Retained Total Non-controlling Total
capital organisation valuation and shares shares earnings interests equity
reserve reserve translation
2024 £m £m £m £m £m £m £m £m £m £m
Balance at 1 January 197 (946) 3 29 (29) (20) 2,814 2,048 17 2,065
Profit for the year - - - - - - 167 167 3 170
Other comprehensive - - 5 (7) - - - (2) - (2)
(loss)/income for the year
Total comprehensive (loss)/income for the year - - 5 (7) - - 167 165 3 168
Transfer of gain on disposal of equity instruments at FVTOCI - - (4) - - - 4 - - -
197 (946) 4 22 (29) (20) 2,985 2,213 20 2,233
Transactions with owners in their capacity as owners:
Issuance of ordinary shares 2 - - - - - (2) - - -
Dividends paid - - - - - - (113) (113) (2) (115)
Own shares acquired under share buyback - - - - (48) - - (48) - (48)
Share settlement of share-based awards - - - - - 13 (13) - - -
Dividend equivalents paid on equity settled share-based awards - - - - - - (2) (2) - (2)
Own shares acquired for employee trusts - - - - - (45) - (45) - (45)
Credit arising on equity settled share-based awards - - - - - - 33 33 - 33
Taxation on equity settled share-based payments - - - - - - 4 4 - 4
Credit arising on the exchange of cash to equity settled share-based awards - - - - - - 18 18 - 18
Balance at 31 December 199 (946) 4 22 (77) (52) 2,910 2,060 18 2,078
2023 £m £m £m £m £m £m £m £m £m £m
Balance at 1 January 197 (946) 5 109 - (22) 2,800 2,143 18 2,161
Profit for the year - - - - - - 74 74 2 76
Other comprehensive - - - (80) - - 30 (50) (1) (51)
(loss)/income for the year
Total comprehensive (loss)/income for the year - - - (80) - - 104 24 1 25
Transfer of gain on disposal of equity instruments at FVTOCI - - (2) - - - 2 - - -
167 (946) 3 29 - (22) 2,906 2,167 19 2,186
Transactions with owners in their capacity as owners:
Issuance of ordinary shares - - - - - - - - - -
Dividends paid - - - - - - (99) (99) (2) (101)
Own shares acquired under share buyback - - - - (29) - - (29) - (29)
Share settlement of share-based awards - - - - - 9 (9) - - -
Dividend equivalents paid on equity settled share-based awards - - - - - - (1) (1) - (1)
Own shares acquired for employee trusts - - - - - (7) - (7) - (7)
Credit arising on equity settled share-based awards - - - - - - 17 17 - 17
Balance at 31 December 197 (946) 3 29 (29) (20) 2,814 2,048 17 2,065
Consolidated Cash Flow Statement
for the year ended 31 December 2024
Notes 2024 2023
(Restated)(1)
£m £m
Cash flow from operating activities 467 438
Income taxes paid (52) (89)
Fees paid on bank and other loan facilities (1) (1)
Interest paid (46) (46)
Interest paid - finance leases (15) (16)
Net Cash flow from operating activities 16 353 286
Investing activities
Sale/(purchase) of financial investments(3) 24 (19)
Interest received 39 30
Dividends from associates and joint ventures 20 22
Expenditure on intangible fixed assets (55) (43)
Purchase of property, plant and equipment (9) (12)
Deferred consideration paid (50) (1)
Sale of other investments 3 3
Investment in associates - (5)
Disposal of associate and joint ventures - 10
Acquired consideration paid (2) -
Receipt of pension scheme surplus(2) - 46
Income taxes paid on receipt of pension scheme surplus(1,2) - (16)
Net cash flows from investment activities (30) 15
Financing activities
Dividends paid 10 (113) (99)
Dividends paid to non-controlling interests (2) (2)
Own shares acquired under share buyback (48) (29)
Own shares acquired for employee trusts (8) (7)
Dividend equivalent paid on equity share-based awards (2) (1)
Repayment of Vendor Loan Note 15 (39) -
Funds received from issue of Sterling Notes - 249
Repurchase of Sterling Notes (37) (210)
Bank facility arrangement fees and debt issue costs (1) (2)
Payment of lease liabilities (27) (29)
Net cash flows from financing activities (277) (130)
Increase in cash and overdrafts 46 171
Cash and overdrafts at the beginning of the year 1,019 888
Effect of foreign exchange rate changes 1 (40)
Cash and overdrafts at the end of the year 17 1,066 1,019
Cash and cash equivalents 1,068 1,029
Overdrafts (2) (10)
1,066 1,019
1. Net cash flows from operating activities (income taxes paid) and net cash
flows from investing activities have been restated as a result of the
reclassification of the £16m tax associated with the repayment of the UK
pension scheme surplus (see 2 below) from operating to investing activities.
2. Represents the cash inflow resulting from the repayment of the UK pension
scheme surplus by the Trustees. This has been classified as investing
activities reflecting the realisation of the underlying investments held
within the scheme prior to the proceeds being transferred to the Group, rather
than an operational return of historic contributions.
3. Sales and purchases of financial assets are reported net and classified as
investing activities reflecting the requirement of the Group to hold
structural financial assets in support of business requirements.
Notes to the Condensed Consolidated Financial Statements
for the year ended 31 December 2024
1. General information
As at 31 December 2024 TP ICAP Group plc (the 'Company') was a public company
limited by shares incorporated in Jersey under the Companies (Jersey) Law
1991. The Company's shares are listed on the London Stock Exchange with a
premium listing. It is the ultimate parent undertaking of the TP ICAP group of
companies (the 'Group').
2. Basis of preparation
(a) Basis of accounting
The financial information included in this document does not constitute the
Group's statutory accounts for the years ended 31 December 2024 or 2023, but
is derived from TP ICAP Group plc's group accounts for 2024 and 2023.
Statutory accounts for 2023 have been delivered to the Registrar of Companies
and those for 2024 will be delivered following the Company's Annual General
Meeting. The auditor has reported on those accounts; their reports were
unqualified, did not draw attention to any matters by way of emphasis without
qualifying their report and for 2023 did not contain a statement under Article
113A of the Companies (Jersey) Law 1991.
The Group's Consolidated Financial Statements have been prepared in accordance
with UK adopted International Accounting Standards ('UK-IFRS') and EU adopted
International Accounting Standards ('EU-IFRS'). UK-IFRS and EU-IFRS differ in
certain respects from each other, however, the differences have no material
impact on these Financial Statements. Companies (Jersey) Law 1991 permits
financial statements to be prepared in accordance with EU-IFRS.
The Financial Statements have been prepared on the historical cost basis,
except for the revaluation of certain financial instruments.
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, the going concern basis continues to be used in preparing these
Financial Statements.
(b) Basis of consolidation
The Group's Consolidated Financial Statements incorporate the Financial
Statements of the Company and entities controlled by the Company made up to 31
December each year. Under IFRS 10 control is achieved where the Company
exercises power over an entity, is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to use its
power to affect the returns from the entity.
(c) Adoption of new and revised Accounting Standards
The following new and revised Standards and Interpretations have been endorsed
by both the UK Endorsement Board and European Commission are effective from 1
January 2024 but they do not have a material effect on the Group's
Consolidated Financial Statements:
• Amendments to IAS 7 'Statement of Cash Flows' and IFRS 7 'Financial
Instruments: Disclosures': Supplier Finance Arrangements;
• Amendments to IAS 1 'Presentation of Financial Statements', Classification of
Liabilities as Current or Non-Current; and;
• Amendments to IFRS 16 'Leases', Lease Liability in a Sale and Leaseback.
(d) Change in accounting policy
In 2024 the Group changed its accounting policy regarding the presentation of
net foreign exchange gains and losses, net foreign exchange derivative gains
and losses and other non-administrative gains and losses. Prior to 2024 these
items were reported within 'General and administrative expenses'. The change
has been to report these items separately in 'Other gains/losses' or, for
exchange gains and losses on foreign currency borrowings and related
derivatives, as part of 'Finance costs'.
The Group believes that the accounting policy change results in a more
relevant and reliable presentation of its Income Statement. In particular, the
change:
• Removes volatility from 'General and administrative expenses', facilitating
uniform trend analysis and permitting a simpler understanding of that line
item;
• Adds clarity by the addition of a separate line item 'Other gains/losses' for
the reporting of these items; and
• More accurately reflects the Group's treasury risk management and financing
activities, with exchange gains and losses on foreign currency borrowings
together with fair value gains and losses on related derivatives reported
within 'Finance costs'.
The change in accounting policy has been applied retrospectively with the
previously reported line items restated as follows:
2023 Income Statement line items Previously Reported Restatement Restated
£m £m £m
General and administrative expenses (511) 4 (507)
Total operating costs (Note 4) (2,085) 4 (2,081)
Other losses (Note 6) - (7) (7)
Earnings before interest and tax 128 (3) 125
Finance costs (Note 8) (66) 3 (63)
Profit before tax 93 - 93
For 2023 there is no overall change to Profit before tax. As the change has no
impact on the Group's Statement of financial position a third balance sheet
for 2022 has not been presented.
3. Segmental analysis
Products and services from which reportable segments derive their revenues
The Group has a matrix management structure. The Group's Chief Operating
Decision Maker ('CODM') is the Executive Committee ('ExCo') which operates as
a general executive management committee under the direct authority of the
Board. The ExCo members regularly review operating activity on a number of
bases, including by business division and by legal ownership which is
structured geographically based on the region of incorporation.
The balance of the CODM review of operating activity and allocation of the
Group's resources is primarily focused on business division and this is
considered to represent the most appropriate view for the assessment of the
nature and financial effects of the business activities in which the Group
engages.
Whilst the Group's Primary Operating Segments are by business division,
individual entities and the legal ownership of such entities continue to
operate with discrete management teams and decision making and governance
structures. Each regional sub-group has its own independent governance
structure including CEOs, board members and sub-group regional Conduct and
Governance Committees with separate autonomy of decision making and the
ability to challenge the implementation of Group level strategy and
initiatives within its region. For the EMEA regional sub-group there are
independent non-executive directors on the regional Board that further
strengthen the independence and judgement of the governance framework.
Information regarding the Group's primary operating segments is reported
below:
31 December 2024 GB E&C LN PM Corp Total
£m £m £m £m £m £m
Revenue
External 1,250 458 354 191 - 2,253
Inter-division 24 3 - 7 (34) -
1,274 461 354 198 (34) 2,253
Total front office costs(2)
External (781) (319) (218) (72) - (1,390)
Inter-division (7) - - (27) 34 -
(788) (319) (218) (99) 34 (1,390)
Other gains (3) 4 - - - - 4
Contribution 490 142 136 99 - 867
Net management and support costs (253) (76) (75) (13) (56) (473)
Other losses - - - - (6) (6)
Other operating income 2 - - - 8 10
Adjusted EBITDA 239 66 61 86 (54) 398
Depreciation and amortisation expense (34) (10) (8) (3) (19) (74)
Adjusted EBIT 205 56 53 83 (73) 324
31 December 2023 GB E&C LN PM Corp(1) Total(1)
£m £m (restated) (restated)
£m £m £m £m
Revenue:
- External 1,236 455 315 185 - 2,191
- Inter-division 22 3 - 4 (29) -
1,258 458 315 189 (29) 2,191
Total front office costs(2):
- External (762) (304) (207) (71) - (1,344)
- Inter-division (4) - - (25) 29 -
(766) (304) (207) (96) 29 (1,344)
Other gains(2) 1 - - - - 1
Contribution 493 154 108 93 - 848
Net management and support costs (259) (75) (87) (14) (44) (479)
Other losses - - - - (11) (11)
Other operating income 3 1 - - 10 14
Adjusted EBITDA 237 80 21 79 (45) 372
Depreciation and amortisation expense (31) (9) (11) (2) (20) (73)
Adjusted EBIT 206 71 10 77 (65) 299
1. 2023 results have been restated as a result of the change in presentation of
certain foreign exchange gains and losses and related derivatives as finance
expenses (Note 2(d). Other items previously reported in 'Net Management and
support costs' have also been re-presented as 'other gains/(losses)'. The
impact of these changes has been as follows:
2. In Global Broking contribution, 'Total front office costs' increased by £1m
with a £1m gain reported in 'Other gains'.
3. In Corporate, 'Net Management and support costs' reduced by £9m with £10m
losses reported in 'Other losses', and £1m reported in financing expenses.
Corporate represents the cost of Group and central functions that are not
allocated to the Group's divisions.
Analysis of significant items
31 December 2024 Restructuring Disposals, acquisitions and investment in new businesses Impairment of intangible assets arising on consolidation Settlements and Total
and other related costs provisions in Other
connection with Significant
legal and Items
regulatory
matters
£m £m £m £m £m £m
Employment, compensation and benefits costs 3 5 - - - 8
Premises and related costs 1 - - - - 1
Deferred consideration(2) - - - - - -
(Reversal)/Charge relating to significant legal and regulatory settlements - - - 8 - 8
Net foreign exchange gains - - - - - -
Other general and administration costs 7 15 - - 4 26
Total included within general and administration costs 8 15 - 8 4 35
Depreciation and impairment of PPE and ROUA 6 - - - - 6
Amortisation and impairment of intangible assets - 42 - - - 42
Total included within operating costs 17 62 - 8 4 91
Other operating income - - - - - -
Other gains (3) - - - - (3)
Total included within EBIT 14 62 - 8 4 88
Included in finance expense - 1 - - - 1
Total significant items before tax 14 63 - 8 4 89
Taxation on significant items (17)
Total significant items after tax 72
Impairment of associates 2
Total significant items 74
31 December 2023 Restructuring Disposals, acquisitions and investment in new businesses Impairment of intangible assets arising on consolidation Settlements and Total
and other related costs (restated) provisions in Other (restated)(1)
(restated) connection with Significant
legal and Items
regulatory
matters
£m £m £m £m £m £m
Employment, compensation and benefits costs 4 2 - - - 6
Premises and related costs 3 - - - - 3
Deferred consideration(2) - (2) - - - (2)
(Reversal)/Charge relating to significant legal and regulatory settlements - - - 19 - 19
Other general and administration costs(2) 8 10 - - - 18
Total included within general and administration costs 11 8 - 19 - 38
Depreciation and impairment of PPE and ROUA 11 - - - - 11
Amortisation and impairment of intangible assets - 44 86 - - 130
Total included within operating costs 26 54 86 19 - 185
Other operating income - - - (8) - (8)
Other gains(2) - (3) - - - (3)
Total included within EBIT 26 51 86 11 - 174
Included in finance expense(2) 1 - - - - 1
Total significant items before tax 27 51 86 11 - 175
Taxation on significant items (27)
Total significant items after tax 148
Impairment of associates 5
Total significant items 153
1. 2023 significant items have been restated as a result of the change in
presentation of certain foreign exchange gains and losses and related
derivatives as finance expenses Note 2(e). Other items previously reported in
'Total included within general and administrative costs' have also been
re-presented as 'other gains'.
2. The impact of these changes has been as follows:
> Net foreign exchange gains for £2m were reclassified in finance expenses
.
> Deferred consideration decreased by £1m with a £1m reported in 'Other
gains'.
> Other general and administrative costs increased by £2m with a £2m
reported in 'Other gains'.
Adjusted profit reconciliation
2024 Adjusted Significant items Reported
£m £m £m
Earnings before interest and tax 324 (88) 236
Net finance costs (21) (1) (22)
Profit before tax 303 (89) 214
Taxation (80) 17 (63)
Profit after tax 223 (72) 151
Share of profit from associates and joint ventures 21 (2) 19
Profit for the year 244 (74) 170
2023 Adjusted Significant items Reported
(Restated)(1) (Restated)(1) (Restated)(1)
£m £m £m
Earnings before interest and tax(1) 299 (174) 125
Net finance costs(1) (28) (1) (29)
Profit before tax 271 (175) 96
Taxation (67) 27 (40)
Profit after tax 204 (148) 56
Share of profit from associates and joint ventures 25 (5) 20
Profit for the year 229 (153) 76
1. Earning before interest and taxation and net finance costs have been restated
by £1m in adjusted and £2m in significant items following the
re-presentation of exchange gains and losses on financing activities and
related derivatives as financing costs. There is no impact on 'Profit before
tax'.
4. Operating costs
2024 2023
(Restated)(1)
£m £m
Broker compensation costs 1,009 986
Other staff costs 356 340
Share-based payment charge 39 34
Employee compensation and benefits 1,404 1,360
Technology and related costs 218 220
Premises and related costs 27 29
Adjustments to deferred consideration - (3)
Charge relating to significant legal and regulatory settlements 8 19
Impairment losses on trade receivables 3 5
Trade receivables expected credit loss adjustment - (1)
Other administrative costs(2) 246 238
General and administrative expenses 502 507
Depreciation of property, plant and equipment 19 22
Depreciation of right-of-use assets 23 23
Depreciation of property, plant and equipment and right-of-use assets 42 45
Impairment of property, plant and equipment 1 5
Impairment of right-of-use assets 5 6
Impairment of property, plant and equipment and right-of-use assets 6 11
Amortisation of other intangible assets 30 28
Amortisation of intangible assets arising on consolidation 42 44
Amortisation of intangible assets 72 72
Impairment of other intangible assets 2 -
Impairment of intangible assets arising on consolidation - goodwill - 47
Impairment of intangible assets arising on consolidation - customer - 39
relationships
Impairment of intangible assets 2 86
2,028 2,081
1. 2023 operating costs have been restated as a result of the change in
presentation (Note 2(d) ) of certain foreign exchange gains and losses and
related derivatives as finance expenses (Note 8) together with other items now
reported as 'Other gains/(losses)' (Note 6). The impact of these changes has
been as follows:
> Net foreign exchange losses of £2m has been reclassified to financing
costs
> Net loss on FX derivative instruments of £4m has been reclassified to
financing costs
> Other administrative costs increased by £2m
> As result of the above general and administrative expenses have
decreased by £4m.
2. Other administrative costs include £97m (December 2023: £89m) of clearing
and settlement costs, £46m (December 2023: £42m) of travel and
entertainment, professional fees including of £67m (December 2023: £54m) and
other miscellaneous costs of £36m (December 2023: £53m)
5. Other operating income
Other operating income comprises:
2024 2023
£m £m
Business relocation grants 2 2
Employee-related insurance receipts 3 2
Employee contractual receipts 1 4
Management fees from associates 1 1
Legal settlement receipts - 8
Other receipts 3 5
10 22
Other receipts include royalties, rebates, non-employee-related insurance
proceeds, tax credits and refunds. Costs associated with such items are
included in administrative expenses.
6. Other gains/(losses)
2024 2023
(restated)
£m £m
Fair value adjustment to investment property (9) -
Gain on remeasurement on finance lease liabilities 12 -
Net fair value gains/(losses) on financial asset at FVTPL 3 1
Net foreign exchange losses arising on operating activities (5) (8)
1 (7)
7. Finance income
2024 2023
(Restated)
£m £m
Interest and similar income 40 32
Interest on finance leases 2 2
42 34
8. Finance costs
2024 2023
(Restated)
£m £m
Interest and fees payable on bank and other loan facilities 3 3
Interest and fees payable on loan drawdowns 1 1
Interest on Sterling Notes January 2024 - 5
Interest on Sterling Notes May 2026 13 13
Interest on Sterling Notes November 2028 7 7
Interest on Sterling Notes April 2030 20 14
Interest on Liquidnet Vendor Loan Notes - 1
Other interest 1 3
Amortisation of debt issue and bank facility costs 3 3
Borrowing costs 48 50
Interest on lease liabilities 15 16
Net foreign exchange gains arising on financing activities (1) (7)
Loss on FX derivative instruments 2 4
64 63
9. Earnings per share
2024 2023
Basic 22.1p 9.5p
Diluted 21.3p 9.3p
The calculation of basic and diluted earnings per share is based on the
following number of shares:
2024 2024
No. (m)
No. (m)
Basic weighted average shares 756.9 777.7
Contingently issuable shares 28.8 16.5
Diluted weighted average shares 785.7 794.2
The earnings used in the calculation basic and diluted earnings per share, are
set out below:
2024 2023
£m £m
Earnings for the year 170 76
Non-controlling interests (3) (2)
Earnings attributable to equity holders of the parent 167 74
10. Dividends
2024 2023
£m £m
Amounts recognised as distributions to
equity holders in the year:
Final dividend for the year ended 31 December 2023 76 -
of 10.0p per share
Interim dividend for the year ended 31 December 2024 37 -
of 4.8p per share
Final dividend for the year ended 31 December 2022 - 62
of 7.9p per share
Interim dividend for the year ended 31 December 2023 - 37
of 4.8p per share
113 99
A final dividend of 11.3 pence per share will be paid on 23 May 2025 to all
shareholders on the Register of Members on 11 April 2025. Dividends are
declared and paid in accordance with Article 115 of the Companies (Jersey) Law
1991.
During the year, the Trustees of the TP ICAP plc EBT and the TP ICAP Group plc
EBT waived their rights to dividends. Dividends are not payable on shares held
in Treasury on the relevant record dates.
11. Intangible assets arising on consolidation
Goodwill Other Total
£m £m £m
At 1 January 2024 1,156 449 1,605
Recognised on acquisitions 1 - 1
Amortisation of acquisition related intangibles - (42) (42)
Impairment - - -
Effect of movements in exchange rates 2 1 3
At 31 December 2024 1,159 408 1,567
At 1 January 2023 1,232 548 1,780
Amortisation of acquisition related intangibles - (44) (44)
Impairment (47) (39) (86)
Effect of movements in exchange rates (29) (16) (45)
At 31 December 2023 1,156 449 1,605
As at 31 December 2024 the gross cost of goodwill and other intangible assets
arising on consolidation amounted to £1,456m and £813m respectively (2023:
£1,453m and £812m). Cumulative amortisation and impairment charges amounted
to £296m for goodwill and £405m for other intangible assets arising on
consolidation (2023: £297m and £363m).
Goodwill
Goodwill arising through business combinations is allocated to groups of
individual cash-generating units ('CGUs'), reflecting the lowest level at
which the Group monitors and tests goodwill for impairment purposes. The
Group's CGUs, as at 31 December, are as follows:
2024 2023
£m £m
Global Broking 556 555
Energy & Commodities 151 150
Parameta Solutions 334 334
Liquidnet - Agency Execution 42 41
Liquidnet - Equities 76 76
Goodwill allocated to CGUs 1,159 1,156
Determining whether goodwill is impaired requires an estimation of the
recoverable amount of each CGU. The recoverable amount is the higher of its
value in use ('VIU') or its fair value less cost of disposal ('FVLCD'). VIU is
a pre-tax valuation, using pre-tax cash flows and pre-tax discount rates which
is compared with the pre-tax carrying value of the CGU, whereas FVLCD is a
post-tax valuation, using post-tax cash flows, post-tax discount rates and
other post-tax observable valuation inputs, which is compared with a post-tax
carrying value of the CGU. The CGU's recoverable amount is compared with its
carrying value to determine if an impairment is required.
The key assumptions for the VIU calculations are those regarding expected
divisional cash flows arising in future years, divisional growth rates,
divisional discount rates and divisional terminal value growth rates as
considered by management. Future projections are based on the most recent
financial projections considered by the Board which are used to project
pre-tax cash flows for the next five years. After this period a steady state
cash flow is used to derive a terminal value for the CGU.
The key assumptions of the FVLCD, using an Income Approach, are those
regarding expected revenue and terminal growth rates, and the discount rate.
Future projections are based on the most recent financial projections
considered by the Board which are then used to project cash flows for the next
five years and for the terminal value.
Impairment testing as at 30 September 2024
For the 30 September 2024 annual impairment testing, the recoverable amounts
for all CGUs were based on their VIU. Growth rates on five-year projected
revenues, growth rates on terminal value cash flows and discount rates used in
the VIU calculations together with their respective breakeven rates were as
follows:
Valuation Breakeven Valuation Breakeven Valuation Breakeven
Discount Discount Revenue Revenue Terminal Terminal
rate rate Growth rates Growth Value Value
rates Growth rate Growth rate
30 September 2024 % % % % % %
CGU
Global Broking 11.0% 21.0% 2.4% (0.3%) 1.8% (11.4%)
Energy & Commodities 11.0% 20.3% 2.4% (0.1%) 1.8% (10.5%)
Parameta Solutions 11.2% 30.3% 6.0% (7.5%) 2.3% (37.6%)
Liquidnet - Agency Execution 10.4% 60.7% 5.6% (3.7%) 1.7% nm¹
Liquidnet - Equities 10.7% 21.9% 4.3% 1.7% 1.8% (13.9%)
Valuation Breakeven Valuation Breakeven Valuation Breakeven
Discount Discount Revenue Revenue Terminal Terminal
rate rate Growth rates Growth Value Value
Rates Growth rate Growth rate
(Restated)(3)
30 September 2023 % % % % % %
CGU
Global Broking 13.2% 25.2% 1.8% (1.5%) 1.4% 1.4%
Energy & Commodities 13.3% 18.2% 1.5% 0.2% 1.7% 1.7%
Parameta Solutions 13.3% 30.2% 7.1% (5.1%) 3.0% 3.0%
Liquidnet - Agency Execution 13.4% 26.3% 3.0% 0.4% 2.7% 2.7%
Liquidnet - Equities 14.2% -² 6.1% -² 2.0% 2.0%
1. Not relevant as breakeven terminal value growth rate will be significantly in
excess of (100)%
2. As the CGU valuation equates to its carrying value, breakeven percentages are
not relevant.
3. Restated to reflect a more appropriate variability in costs.
No impairments were identified as a result of the annual testing of these
CGUs.
As shown in the table below, with the exception of Parameta Solutions and
Liquidnet - Agency Execution, the VIU of the CGU's is highly sensitive to
reasonably possible changes in growth rates. The impact on future cash flows
resulting from falling growth rates does not reflect any management actions
that would be taken under such circumstances. These stresses assume all other
assumptions remain unchanged, as there is a degree of estimation involved in
the sensitivity forecasts.
Valuation (Surplus)/ impairment at valuation growth rate minus 1% (Surplus)/ impairment at valuation growth rate minus 3%
revenue
growth
rate
CGU - 30 September 2024 % £m £m
Global Broking 2.4% 629 (106)
Energy & Commodities 2.4% 160 (53)
Parameta Solutions 6.0% 717 579
Liquidnet - Agency Execution 5.6% 286 209
Liquidnet - Equities 4.3% 117 (23)
Valuation (Surplus)/ impairment at valuation growth rate minus 1% (Surplus)/ impairment at valuation growth rate minus 3%
revenue
growth
rate
CGU - 30 September 2023 % £m £m
Global Broking 1.8% 669 321
Energy & Commodities 1.5% 46 (52)
Parameta Solutions 7.1% 535 450
Liquidnet - Agency Execution 3.0% 45 19
Liquidnet - Equities 6.1% (27) (76)
The Group does not expect climate change to have a material impact on the
financial statements. Climate scenario sensitivity analysis on the potential
impact to the financial forecasts used in goodwill impairment assessment and
valuation concludes that the E&C CGU will continue to have headroom
(excess of the recoverable amount over the carrying amount of the CGU) in its
valuation to withstand the potential changes in market demand across the
E&C asset classes with management taking appropriate actions.
Impairment assessment as at 31 December 2024
As at 31 December 2024, the review of the indicators of impairment did not
require any further testing for all CGUs (Global Broking, Energy &
Commodities, Parameta solutions, Liquidnet - Agency Execution and Liquidnet -
Equities).
Other intangible assets
Other intangible assets at 31 December 2024 represent customer relationships,
business brands and trademarks that arise through business combinations.
Customer relationships are amortised over a period of between 2 and 20 years.
Other intangible assets, along with other finite life assets, are subject to
impairment trigger assessment at least annually. As at 31 December 2024, the
impairment trigger assessment did not require any further testing for other
intangible assets arising on consolidation.
12. Trade and other receivables
2024 2023
(restated)
£m £m
Non-current receivables
Finance lease receivables 21 27
Other receivables 6 6
27 33
Current receivables
Trade receivables 294 304
Amounts due from clearing organisation 22 37
Deposits paid for securities borrowed(2) 2,497 1,776
Finance lease receivables 6 3
Contract assets(1) 12 11
Other debtors 32 41
Owed by associates and joint ventures 4 4
Prepayments 126 98
Corporation tax 5 5
2,998 2,279
1. Contract asset of £11m in 2023 were previously reported as accrued income.
2. Deposits paid for securities borrowed arise on collateralised stock lending
transactions. Such trades are complete only when both the collateral and stock
for each side of the transaction are returned. The above analysis reflects the
receivable side of such transactions. Corresponding deposits received for
securities loaned are shown in Note 14 'Trade and other payables'.
At December 2024 the Group held non-cash collateral amounting to £81m
relating to stock borrowing that is not recognised in the statement of
financial position. The Group has on-lent non-cash collateral of £81m under
back-to-back transactions.
The Directors consider that the carrying amount of current trade and other
receivables which are not held at fair value through profit or loss, and the
value of non-cash collateral held approximate to their fair values.
13. Financial assets and financial liabilities at fair value through profit or
loss
2024 2023
£m £m
Financial assets at fair value through profit or loss
Matched Principal financial assets 6 24
Fair value gains on unsettled Matched Principal transactions 165 545
171 569
Financial liabilities at fair value through profit or loss
Matched Principal financial liabilities (24) -
Fair value losses on unsettled Matched Principal transactions (165) (541)
(189) (541)
Notional contract amounts of unsettled
Matched Principal transactions
Unsettled Matched Principal Sales 27,137 125,673
Unsettled Matched Principal Purchases 27,155 125,645
Fair value gains and losses on unsettled Matched Principal transactions
represent the price movement between the trade date and the reporting date on
regular way transactions prior to settlement. Matched Principal transactions
arise where securities are bought from one counterparty and simultaneously
sold to another counterparty. Settlement of such transactions is primarily on
a delivery vs payment basis and typically take place within a few business
days of the transaction date according to the relevant market rules and
conventions.
The notional contract amounts of unsettled Matched Principal transactions
indicate the aggregate value of buy and sell transactions outstanding at the
balance sheet date. They do not represent amounts at risk.
14. Trade and other payables
2024 2023
(restated)
£m £m
Trade payables 39 40
Contract liabilities(1) 3 2
Amounts due to clearing organisations 1 6
Deposits received for securities loaned(3) 2,457 1,773
Deferred consideration - 51
Other creditors(2) 130 85
Accruals 401 384
Owed to associates and joint ventures 3 3
Tax and social security 33 28
Deferred income - 2
3,067 2,372
1. Contract liabilities of £2m in 2023 were previously reported as deferred
income.
2. Other creditors includes £19m forward contracts relating to own share
purchases
3. Deposits received for securities loaned arise on collateralised stock lending
transactions. Such trades are complete only when both the collateral and stock
for each side of the transaction are returned. The above analysis reflects the
payable side of such transactions. Corresponding deposits paid for securities
borrowed are shown in Note 12 'Trade and other receivables'.
The Directors consider that the carrying amount of trade and other payables
which are not held at fair value through profit or loss approximate to their
fair values.
15. Loans and borrowings
Less than Greater than Total
one year one year
2024 £m £m £m
Overdrafts 2 - 2
Sterling Notes May 2026 2 249 251
Sterling Notes November 2028 1 248 249
Sterling Notes April 2030 4 247 251
9 744 753
2023
Overdrafts 10 - 10
Sterling Notes January 2024 37 - 37
Sterling Notes May 2026 1 249 250
Sterling Notes November 2028 1 248 249
Sterling Notes April 2030 4 247 251
Liquidnet Vendor Loan Notes March 2024 40 - 40
93 744 837
Settlement facilities and overdrafts
Where the Group purchases securities under Matched Principal trades but is
unable to complete the sale immediately, the Group's settlement agent finances
the purchase through the provision of an overdraft secured against the
securities and any collateral placed at the settlement agent. As at 31
December 2024, overdrafts for the provision of settlement finance amounted to
£2m (December 2023: £10m).
Bank credit facilities and bank loans
The Group has a £350m committed revolving facility that matures in May 2027.
Facility commitment fees of 0.70% on the undrawn balance are payable on the
facility. Arrangement fees of £3m were paid in 2022 and are being amortised
over the maturity of the facility.
As at 31 December 2024, the revolving credit facility was undrawn. During the
year, the maximum amount drawn was £76m (2023: £40m), and the average amount
drawn was £31m (2023: £18m). The Group utilises the credit facility
throughout the year, entering into numerous short-term bank loans where
maturities are less than three months. The turnover is quick and the volume is
large and resultant flows are presented net in the Group's cash flow statement
in accordance with IAS 7 'Statement of Cash Flows'.
Interest and facility fees of £2m were incurred in 2024 (2023: £2m).
Credit facility and loans
The Group has a Yen 20bn committed facility with The Tokyo Tanshi Co., Ltd,
that matures in May 2027. Facility commitment fees of 0.64% on the undrawn
balance are payable on the facility.
As at 31 December 2024, the Yen 20bn committed facility equated to £102m and
was undrawn (2023: £56m at 2023 year end rates and undrawn as of the 2023
year end). The Directors consider that the carrying amount of the loan which
is not held at fair value through profit or loss approximates to its fair
value. During the year, the maximum amount drawn was Yen 20bn, £102m at year
end rates (2023: Yen 8bn, £45m at 2023 year end rates), and the average
amount drawn was Yen 9bn, £45m at year end rates (2023: Yen 4bn, £24m at
2023 year end rates). The Group utilises the credit facility throughout the
year, entering into numerous short-term bank loans where maturities are less
than three months. The turnover is quick and the volume is large and resultant
flows are presented net in the Group's cash flow statement in accordance with
IAS 7 'Statement of Cash Flows'.
Interest and facility fees of £1m were incurred in 2024 (2023: £1m).
Sterling Notes: Due January 2024
In January 2017 the Group issued £500m unsecured Sterling Notes due January
2024. The Notes had a fixed coupon of 5.25% payable semi-annually, subject to
compliance with the terms of the Notes. In May 2019, the Group repurchased
£69m of the Notes, in November 2021 the Group repurchased £184m of the Notes
and in April 2023 a further £210m of the Notes were repurchased. The
remaining £37m was repaid in January 2024 at maturity.
Sterling Notes: Due May 2026
In May 2019 the Group issued £250m unsecured Sterling Notes due May 2026. The
Notes have a fixed coupon of 5.25% paid semi-annually, subject to compliance
with the terms of the Notes.
Interest of £13m was incurred in 2024 (2023: £13m). The amortisation expense
of issue costs in 2024 and 2023 was less than £1m.
Accrued interest at 31 December 2024 amounted to £2m (2023: £1m).
Unamortised issue costs were £1m as at 31 December 2024 (2023: £1m).
At 31 December 2024 the fair value of the Notes (Level 1) was £249m (2023:
£242m).
Sterling Notes: Due November 2028
In November 2021 the Group issued £250m unsecured Sterling Notes due November
2028. The Notes were issued at a discount of £1m, raising £249m before issue
costs. The Notes have a fixed coupon of 2.625% paid semi-annually, subject to
compliance with the terms of the Notes.
Interest of £7m was incurred in 2024 (2023: £7m). The amortisation expense
of discount and issue costs in 2024 and 2023 was less than £1m.
Accrued interest at 31 December 2024 amounted to £1m (2023:£1m). Unamortised
discount and issue costs were £2m (2023: £2m).
At 31 December 2024 the fair value of the Notes (Level 1) was £220m (2023:
£210m).
Sterling Notes: Due April 2030
In April 2023 the Group issued £250m unsecured Sterling Notes due April 2030.
The Notes were issued at a discount of £1m, raising £249m before issue
costs. The Notes have a fixed coupon of 7.875% paid semi-annually, subject to
compliance with the terms of the Notes.
Interest of £20m was incurred in 2024 (2023: £14m). The amortisation expense
of discount and issue costs in 2024 and 2023 was £1m. Accrued interest at 31
December 2024 amounted to £4m (2023: £4m). Unamortised discount and issue
costs were £3m (2023: £3m). At 31 December 2024 the fair value of the Notes
(Level 1) was £266m (2023: £269m).
Liquidnet Vendor Loan Notes Due March 2024
In March 2021, as part of the purchase consideration of Liquidnet, the Group
issued $50m unsecured Loan Notes due March 2024. The Notes had a fixed coupon
of 3.2% paid annually. In March 2024 the Notes were settled at maturity.
Interest of less than £1m was incurred in 2024 (2023: £1m).
16. Reconciliation of operating result to net cash from operating
activities
2024 2023
(restated)(1)
£m £m
Profit before tax 214 96
Add back: finance costs(1) 64 63
Deduct: finance income (42) (34)
Earnings before interest and tax ("EBIT")(1) 236 125
Adjustments for:
- Share-based payment charge 33 17
- Depreciation of property, plant and equipment 19 22
- Impairment of property, plant and equipment 1 5
- Depreciation of right-of-use assets 23 23
- Impairment of right-of-use assets 5 6
- Amortisation of intangible assets 30 28
- Impairment of intangible assets 2 -
- Amortisation of intangible assets arising on consolidation 42 44
- Impairment of intangible assets arising on consolidation - 39
- Impairment of goodwill - 47
- Remeasurement of deferred consideration(1) - (2)
- Fair value adjustment to investment in property 9 -
- Gain on remeasurement on finance lease liabilities (12) -
Net operating cash flow before movement in working capital 388 354
(Increase)/decrease in trade and other receivables (13) 69
Decrease/(increase) in net Matched Principal related balances 46 (20)
Increase in net balances with Clearing Organisations 10 -
(Increase) in net stock lending balances (38) (4)
Increase in trade and other payables 69 33
Increase in provisions 5 6
Net cash flow from operating activities 467 438
1. 2023 balances have been restated to reflect the change in presentation as set
out in Note 2(d).
> 'Finance costs' and 'Earnings before interest and tax' have reduced by
£3m.
> the previously reported 'adjustment for the unrealised exchange gain on
Vendor Loan Notes' of £2m has been reclassified to financing and no longer
appears as an add back to operating activities.
> 'Remeasurement of deferred consideration' has been reduced by £1m with
the unrealised exchange gain reclassified to financing.
There has been no change to 'Net operating cash flow before movement in
working capital' or to 'Net cash flow from operating activities'.
17. Analysis of net debt
At 1 Cash Non-cash Exchange At 31
January items items differences December
2024 £m £m £m £m £m
Cash and cash equivalents 1,029 38 - 1 1,068
Overdrafts (10) 8 - - (2)
1,019 46 - 1 1,066
Financial investments 189 (24) - (5) 160
Sterling Notes January 2024 (37) 37¹ - - -
Sterling Notes May 2026 (250 13² (14) - (251)
Sterling Notes November 2028 (249) 7² (7) - (249)
Sterling Notes April 2030 (251) 20² (20) - (251)
Liquidnet Vendor Loan Notes (40) 39(3) - 1 -
Total debt excluding lease liabilities (827) 116 (39) 1 (751)
Lease liabilities (251) 42(4) (11) (1) (221)
Total financing liabilities (1,078) 158 (50) (1) (972)
Net (debt)/funds 130 180 (50) (4) 254
At 1 Cash Non-cash Exchange At 31
January items items differences December
2023 £m £m £m £m £m
Cash and cash equivalents 888 181 - (40) 1,029
Overdrafts - (10) - - (10)
888 171 - (40) 1,019
Financial investments 174 19 - (4) 189
Sterling Notes January 2024 (253) 220 (4) - (37)
Sterling Notes May 2026 (250) 13 (13) - (250)
Sterling Notes November 2028 (248) 7 (8) - (249)
Sterling Notes November 2030 - (237) (14) - (251)
Liquidnet Vendor Loan Notes (43) 1 - 2 (40)
Total debt excluding lease liabilities (794) 4 (39) 2 (827)
Lease liabilities (279) 45 (27) 10 (251)
Total financing liabilities (1,073) 49 (66) 12 (1,078)
Net debt (11) 239 (66) (32) 130
1. Cash flow relates to principal repaid of £37m reported as cash flow from
financing activities.
2. Relates to interest paid reported as a cash outflow from operating activities.
3. Cash flow relates to the repayment of the Liquidnet Vendor Loan Notes reported
as cash flow from financing activities.
4. Relates to interest paid of £15m (2023: £16m) reported as cash outflow from
operating activities and principal paid of £27m (2023: £29m) reported as a
cash outflow from financing activities.
The signage of cash items will vary depending on whether they are classified
as assets or liabilities. A cash inflow for an asset is recorded with a
positive sign (cash outflow: negative sign). Conversely, cash inflow for a
liability is recorded with a negative sign (cash outflow: positive sign).
Cash and cash equivalents comprise cash at bank and other short-term highly
liquid investments with an original maturity of three months or less. As at 31
December 2024 cash and cash equivalents, net of overdrafts, amounted to
£1,066m (2023: £1,019m) of which £176m (2023: £105m) represents amounts
subject to restrictions and are not readily available to be used for other
purposes within the Group. Cash at bank earns interest at floating rates based
on daily bank deposit rates. Short-term deposits are made for varying periods
of between one day and three months depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term
deposit rates. Financial investments comprise liquid short-term government
securities and term deposits held with banks and clearing organisations.
Non-cash items represent interest expense, the amortisation of debt issue
costs and recognition/derecognition of lease liabilities.
18. Provisions
Property Re-structuring Legal Total
and other
2024 £m £m £m £m
At 1 January 2024 12 5 28 45
Charge to income statement 5 6 7 18
Utilisation of provisions - (5) (7) (12)
Reclassification 2 - (2) -
Effect of movements in exchange rates - - - -
At 31 December 2024 19 6 26 51
2023
At 1 January 2023 13 7 20 40
Charge to income statement - 6 12 18
Utilisation of provisions - (8) (4) (12)
Effect of movements in exchange rates (1) - - (1)
At 31 December 2023 12 5 28 45
2024 2023
£m £m
Included in current liabilities 17 14
Included in non-current liabilities 34 31
51 45
Property provisions outstanding as at 31 December 2024 relate to provisions in
respect of building dilapidations, representing the estimated cost of making
good dilapidations and disrepair on various leasehold buildings, and are
expected to be utilised over the next 10 years.
Restructuring provisions outstanding as at 31 December 2024 relate to
termination and other employee related costs. It is expected that the
remaining obligations will be discharged during 2025.
Legal and other provisions include provisions for legal claims brought against
subsidiaries of the Group together with provisions against obligations for
certain long-term employee benefits and non-property related onerous
contracts. At present the timing and amount of any payments are uncertain and
provisions are subject to regular review. It is expected that the obligations
will be discharged over the next 16 years.
Commodities and Futures Trading Commission - Bond issuances investigation
ICAP Global Derivatives Limited ('IGDL'), ICAP Energy LLC ('Energy'), ICAP
Europe Limited ('IEL'), Tullett Prebon Americas Corp. ('TPAC'), tpSEF Inc.
('tpSEF'), Tullett Prebon Europe Limited ('TPEL') Tullett Prebon (Japan)
Limited ('TPJL') and Tullett Prebon (Australia) Limited ('TPAL') are currently
responding to an investigation by the CFTC in relation to the pricing of
issuances utilising certain of TP ICAP's indicative broker pricing screens and
certain recordkeeping matters including in relation to employee use of
personal devices for business communications and other books and records
matters. The investigation remains open and the Group is co-operating with
the CFTC in its enquiries. Whilst it is not possible to predict the ultimate
outcome of the investigation, the Group has made a provision reflecting
management's best estimate as at this date of the cost of settling the
investigation. As allowed for UK financial reporting, the Group has not
disclosed the amount provided as it is considered to be seriously prejudicial
to the Group's interest and in reaching a settlement. The actual outcome may
differ significantly from management's current estimate. As the relevant
matters occurred prior to the Group's acquisition of the IGBB and the Group
reached a related settlement in 2023 with ICAP's successor company, NEX Group
Limited, under the terms of the purchase agreement, and on confidential terms.
Securities Exchange Commission - Liquidnet Inc. investigation
In October 2022, Liquidnet Inc. ('Liquidnet') received an inquiry from the
Securities and Exchange Commission relating to, among other things, compliance
with SEC Rule 15c3-5 and audit trail and access permissions to its ATS
platforms. This matter was resolved in January 2025 and a civil monetary
penalty of $5 million was paid.
19. Contingent liabilities
Labour claims - ICAP Brazil
ICAP do Brasil Corretora De Títulos e Valores Mobiliários Ltda ('ICAP
Brazil') is a defendant in 4 (31 December 2023: 7) pending lawsuits filed in
the Brazilian Labour Court by persons formerly associated with ICAP Brazil
seeking damages under various statutory labour rights accorded to employees
and in relation to various other claims including wrongful termination, breach
of contract and harassment (together the 'Labour Claims'). The Group estimates
the maximum potential aggregate exposure in relation to the Labour Claims,
including any potential social security tax liability, to be BRL 3.6m (£0.5m)
(31 December 2023: BRL 39.0m (£6.4m)). The Group is the beneficiary of an
indemnity from NEX in relation to any liabilities in respect of one of the 4
Labour Claims insofar as they relate to periods prior to completion of the
Group's acquisition of ICAP Global Broking Business. The Labour Claims are at
similar and final stages of their respective proceedings and are pending the
court's decision on appeal. The Group intends to contest liability in each of
these matters and to vigorously defend itself. It is not practicable at
present to provide a reliable estimate of any potential financial impact on
the Group.
Flow case - Tullett Prebon Brazil
In December 2012, Flow Participações Ltda and Brasil Plural Corretora de
Câmbio, Títulos e Valores ('Flow') initiated a lawsuit against Tullett
Prebon Brasil Corretora de Valores e Câmbio Ltda. and Tullett Prebon Holdings
do Brasil Ltda alleging that the defendants have committed a series of unfair
competition misconducts, such as the recruitment of Flow's former employees,
the illegal obtainment and use of systems and software developed by the
plaintiffs, as well as the transfer of technology and confidential information
from Flow and the collusion to do so in order to increase profits from
economic activities. The amount currently claimed is BRL 435m (£56.2m) (31
December 2023: BRL 400m (£64.1m)). The Group intends to vigorously defend
itself but there is no certainty as to the outcome of these claims. Currently,
the case is in an early expert testimony phase. It is not practicable at
present to provide a reliable estimate of any potential financial impact on
the Group.
LIBOR Class actions
The Group is currently defending the following LIBOR related actions:
Stichting LIBOR Class Action
On 15 December 2017, the Stichting Elco Foundation, a Netherlands-based claim
foundation, filed a writ initiating litigation in the Dutch court in Amsterdam
on behalf of institutional investors against ICAP Europe Limited ('IEL'), ICAP
plc, Cooperative Rabobank U.A., UBS AG, UBS Securities Japan Co. Ltd, Lloyds
Banking Group plc, and Lloyds Bank plc. The litigation alleges manipulation by
the defendants of the JPY LIBOR, GBP LIBOR, CHF LIBOR, USD LIBOR, EURIBOR,
TIBOR, SOR, BBSW and HIBOR benchmark rates, and seeks a declaratory judgment
that the defendants acted unlawfully and conspired to engage in improper
manipulation of benchmarks. If the plaintiffs succeed in the action, the
defendants would be responsible for paying costs of the litigation, but each
allegedly impacted investor would need to prove its own actual damages. It is
not possible at this time to determine the final outcome of this litigation,
but IEL has factual and legal defences to the claims and intends to defend the
lawsuit vigorously. A hearing took place on 18 June 2019 on Defendants motions
to dismiss the proceedings. On 14 August 2019 the Dutch Court issued a ruling
dismissing ICAP plc (now NEX Group Plc) from the case entirely but keeping
certain claims against IEL relating solely to JPY LIBOR. On 9 December 2020,
the Dutch Court issued a final judgement dismissing the Foundation's claims in
their entirety. In March 2024, the Appellate Court reinstated the majority of
the claims that the lower Court had dismissed. In April 2024, defendants filed
an application for an immediate appeal of the Appellate Court's decision to
the Dutch Supreme Court. This application remains pending decision. The Group
is covered by an indemnity from NEX (ICAP Plc's successor) in relation to any
outflow in respect of the ICAP entities with regard to these matters. It is
not practicable to estimate any potential financial impact in respect of this
matter at this time.
Euribor Class Action
On 13 August 2015, ICAP Europe Limited, along with ICAP plc, was named as a
defendant in a Fourth Amended Class Action Complaint filed in the United
States District Court by lead plaintiff Stephen Sullivan asserting claims of
Euribor manipulation. Defendants briefed motions to dismiss for failure to
state a claim and lack of jurisdiction, which were fully submitted as of 23
December 2015. On 21 February 2017, the Court issued a decision dismissing a
number of foreign defendants, including the ICAP Europe Limited and NEX
International plc (previously ICAP plc now NEX International Limited), out of
the lawsuit on the grounds of lack of personal jurisdiction. Because the
action continued as to other defendants, the dismissal decision for lack of
personal jurisdiction has not yet been appealed. However, the plaintiffs
announced on 21 November 2017 that they had reached a settlement with the two
remaining defendants in the case. As a part of their settlement, the two bank
defendants have agreed to turn over materials to the plaintiffs that may be
probative of personal jurisdiction over the previously dismissed foreign
defendants. The remaining claims in the litigation were resolved by a
settlement which the Court gave final approval to on 17 May 2019. Plaintiffs
filed a notice of appeal on 14 June 2019, appealing the prior decisions on the
motion to dismiss and the denial of leave to amend. Defendants filed a
cross-notice of appeal on 28 June 2019 appealing aspects of the Court's prior
rulings on the motion to dismiss that were decided in the Plaintiffs' favour.
These appeals have been stayed since August 2019 pending a ruling in an
unrelated appellate matter involving similar issues. In December 2021, the
unrelated appeal was decided and the stay of the appeal and cross appeal was
lifted and commencing in May 2022 a briefing schedule was implemented. The
motions have been fully briefed but the appeal and cross appeal are not
anticipated to be ruled upon until sometime in 2025 or later. It is not
practicable to predict the ultimate outcome of this action or to provide an
estimate of any potential financial impact. The Group is covered by an
indemnity from NEX in relation to any outflow in respect of the ICAP entities
with regard to these matters.
ICAP Securities Limited, Frankfurt branch - Frankfurt Attorney General
administrative proceedings
On 19 December 2018, ICAP Securities Limited, Frankfurt branch ('ISL') (now TP
ICAP Markets Limited) was notified by the Attorney On 19 December 2018, ICAP
Securities Limited, Frankfurt branch ('ISL') (now TP ICAP Markets Limited) was
notified by the Attorney General's office in Frankfurt notifying ISL that it
had commenced administrative proceedings against ISL and criminal proceedings
against former employees and a former director of ISL, in respect of aiding
and abetting tax evasion by Rafael Roth Financial Enterprises GmbH ('RRFE').
It is possible that a corporate administrative fine may be imposed on ISL and
earnings derived from the criminal offence confiscated. ISL has appointed
external counsel and is in the process of investigating the activities of the
relevant desk from 2006-2009 and is engaging with the Frankfurt prosecutor's
requests. This investigation is complicated as the majority of relevant
records are held by NEX and NEX failed to disclose its engagement with the
relevant authorities prior to the sale of ICAP to Tullett Prebon in 2016. The
Group issued proceedings against NEX in respect of breach of warranties under
the sale and purchase agreement in connection with the IGBB acquisition in
relation to these matters. The claim against NEX has been settled on
confidential terms. Since the Frankfurt proceedings are at an early stage,
details of the alleged wrongdoing or case against ISL are not yet available,
and it is not practicable at present to provide a reliable estimate of any
potential financial impact on the Group.
ICAP Securities Limited and The Link Asset and Securities Company Limited -
Proceedings by the Cologne Public Prosecutor
On 11 May 2020, TP ICAP learned that proceedings have been commenced by the
Cologne Public prosecutor against ICAP Securities Limited ('ISL') (now TP ICAP
Markets Limited) and The Link Asset and Securities Company Ltd ('Link') in
connection with criminal investigations into individuals suspected of aiding
and abetting tax evasion between 2004 and 2012 relating to certain so called
'cum ex' transactions. It is possible that the Cologne Public Prosecutor may
seek to impose an administrative fine against ISL or Link and confiscate the
earnings that ISL or Link allegedly derived from the underlying alleged
criminal conduct by the relevant individuals. ISL and Link have appointed
external lawyers to advise them. The Group issued proceedings against NEX in
respect of breach of warranties under the sale and purchase agreement in
connection with the IGBB acquisition in relation to these matters. The claim
against NEX has been settled on confidential terms. Since the Cologne
proceedings are at an early stage, details of the alleged wrongdoing or case
against ISL and Link are not yet available, and it is not practicable at
present to provide a reliable estimate of any potential financial impact on
the Group.
Portigon AG and others v. TP ICAP Markets Limited and others
TP ICAP plc (now TP ICAP Finance plc) is a defendant in an action filed by
Portigon AG in July 2021 in the Supreme Court of the State of New York County
of Nassau alleging losses relating to certain so called 'cum ex' transactions
allegedly arranged by the Group between 2005 and 2007. In June 2022, the Court
dismissed the action for lack of personal jurisdiction. In July 2022, the
plaintiffs filed a motion with the Court for reconsideration as well as a
notice of appeal. The plaintiff's motion for reconsideration was denied and
the plaintiffs have appealed the dismissal of its claims. Portigon's appeal
has been fully briefed and the parties are awaiting a date for oral argument
from the court some time in 2025. The Group intends to contest liability in
the matter and to vigorously defend itself. It is not practicable to predict
the ultimate outcome of this action or to provide an estimate of any potential
financial impact. The Group issued proceedings against NEX in respect of
breach of warranties under the sale and purchase agreement in connection with
the IGBB acquisition in relation to these matters. The claim against NEX has
been settled on confidential terms.
MM Warburg & CO (AG & Co.) KGaA and others v. TP ICAP Markets Limited,
The Link Asset and Securities Company Limited and others
TP ICAP Markets Limited ('TPIM') and Link are defendants in a claim filed in
Hamburg by Warburg on 31 December 2020, but which only reached TPIM and Link
on 26 October 2021. The claim relates to certain German 'cum-ex' transactions
that took place between 2007 and 2011. In relation to those transactions
Warburg has refunded EUR 185 million to the German tax authorities and is
subject to a criminal confiscation order of EUR 176.5 million. It has also
been ordered to repay a further EUR 60.8 million to the German tax authorities
and is subject to a related civil claim for EUR 48.8 million. Warburg's claims
are based primarily on joint and several liability (Warburg having now dropped
claims initially advanced in tort and most of the claims initially advanced in
contract). TPIM/Link filed their defence in April 2022 and received
Warburg's reply to the defence in September 2022. TPIM/Link filed their
rejoinder in response to Warburg's reply to TPIM/Link's defence on 6 December
2023. A hearing took place on 13 May 2024 with submissions filed in July 2024.
On 30 October 2024, the Hamburg Court issued a non-binding final notice giving
preliminary views on the claim with further submissions prior to a hearing
held in January 2025. The Court issued a partial judgment on 5 March 2025
dismissing certain claims and deciding certain matters. It postponed judgment
on certain other matters. As the outcome remains uncertain and cannot be
reliably estimated, the Group has not recognised a provision at this time. Due
to the level of uncertainty, it is not practicable to estimate any potential
financial impact in respect of this matter.
General note
The Group operates in a wide variety of jurisdictions around the world and
uncertainties therefore exist with respect to the interpretation of complex
regulatory, corporate and tax laws and practices of those territories.
Accordingly, and as part of its normal course of business, the Group is
required to provide information to various authorities as part of informal and
formal enquiries, investigations or market reviews. From time to time the
Group's subsidiaries are engaged in litigation in relation to a variety of
matters. The Group's reputation may also be damaged by any involvement or the
involvement of any of its employees or former employees in any regulatory
investigation and by any allegations or findings, even where the associated
fine or penalty is not material.
Save as outlined above in respect of legal matters or disputes for which a
provision has not been made, notwithstanding the uncertainties that are
inherent in the outcome of such matters, currently there are no individual
matters which are considered to pose a significant risk of material adverse
financial impact on the Group's results or net assets.
The Group establishes provisions for taxes other than current and deferred
income taxes, based upon various factors which are continually evaluated, if
there is a present obligation as a result of past events, it is probable that
an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate of the amount of the obligation can be
made.
In the normal course of business, certain of the Group's subsidiaries enter
into guarantees and indemnities to cover trading arrangements and/or the use
of third-party services or software.
The Group is party to numerous contractual arrangements with its suppliers
some of which, in the normal course of business, may become subject to dispute
over a party's compliance with the terms of the arrangement. Such disputes
tend to be resolved through commercial negotiations but may ultimately result
in legal action by either or both parties.
Appendix - Alternative Performance Measures
Alternative performance measures ('APMs') are complementary to measures
defined within International Financial Reporting Standards ('IFRS') and are
used by management to explain the Group's business performance and financial
position. They include common industry metrics, as well as measures which
management and the Board consider are useful to enhance the understanding of
its performance and allow meaningful comparisons between periods and Business
Segments. The APMs reported are monitored consistently by the Group to manage
performance on a monthly basis.
Detailed reconciliations of APMs to their nearest IFRS Income Statement
equivalents and adjusted APMs can be found in this section.
The APMs the Group uses are:
Term Definition
Adjusted attributable earnings Earnings attributable to the equity holders of the parent less significant
items and taxation on significant items.
Adjusted earnings Reported earnings less significant items and taxation on significant items.
Used interchangeably with Adjusted profit for the year or Adjusted post-tax
earnings.
Adjusted earnings per share Adjusted earnings less earnings attributable to non-controlling interests,
divided by the weighted number of shares in issue.
Adjusted EBIT Earnings before net interest, tax, significant items and share of equity
accounted investments' profit after tax. Used interchangeably with adjusted
operating profit.
Adjusted EBIT margin Adjusted EBIT margin is adjusted EBIT expressed as a percentage of reported
revenue and is calculated by dividing adjusted EBIT by reported revenue for
the year.
Adjusted EBITDA Earnings before net interest, tax, depreciation, amortisation of intangible
assets, significant items and share of equity accounted investments' profit
after tax.
Adjusted performance Measure of performance excluding the impact of significant items.
Attributable Earnings Earnings attributable to the equity holders of the parent, being total
earnings less earnings attributable to non-controlling interests.
Cash conversion ratio Free cash flow divided by adjusted attributable earnings.
Constant Currency Comparison of current year results with the prior year will be impacted by
movements in foreign exchange rates versus GBP, the Group's presentation
currency. In order to present an additional comparison of underlying
performance in the period, the Group retranslates foreign denominated prior
year results at current year exchange rates.
Contribution Contribution represents revenue less the direct costs of generating that
revenue. Contribution is calculated as the sum of Broking contribution and
Parameta Solutions contribution.
Contribution margin Contribution margin is contribution expressed as a percentage of reported
revenue and is calculated by dividing contribution by reported revenue.
Dividend per share Represents the amount in pence paid or proposed on each ordinary share.
Divisional contribution Represents Divisional revenues less Divisional front office costs, inclusive
of the revenue and front office costs internally generated between Global
Broking, Energy & Commodities and Parameta Solutions.
Divisional contribution margin Divisional contribution margin is Divisional contribution expressed as a
percentage of Divisional revenue and is calculated by dividing Divisional
contribution by Divisional revenue.
Earnings Used interchangeably with Profit for the year.
EBIT Earnings before net interest and tax.
EBIT margin EBIT margin is EBIT expressed as a percentage of reported revenue and is
calculated by dividing EBIT by reported revenue for the year.
EBITDA Earnings before net interest, tax, depreciation, amortisation of intangible
assets and share of equity accounted investments' profit after tax.
Free cash flow Free cash flow reflects the cash and working capital efficiency of the Group's
operations, and aligns tax with underlying items and interest received with
the operations of the whole Group. Free cash flow is calculated adjusting net
cash flow from operating activities for capital expenditure on intangible
assets and property, plant and equipment, plus disposal proceeds on such
assets, dividends from associates and joint ventures, interest received less
dividends paid to non-controlling interests. For 2023 income taxes paid has
been adjusted to remove the tax paid on the receipt of the pension scheme
surplus.
Leverage ratio Total debt, excluding finance lease liabilities, divided by an external Rating
Agency's definition of adjusted EBITDA, being profit before tax adding back
borrowing costs, depreciation and amortisation, and adjusting for significant
items and other adjustments (share of results of associates and joint ventures
and share based payment expense).
Significant Items Items due to their size, nature or frequency that distort year-on-year and
operating-to-operating segment comparisons, which are excluded in order to
provide additional understanding, comparability and predictability of the
underlying trends of the business, to arrive at adjusted operating and profit
measures.
Significant items include the amortisation of acquired intangible assets as
similar charges on internally generated assets are not included within the
reported results as these cannot be capitalised under IFRS. This is despite
the adjusted measure including the revenue related to the acquired
intangibles.
Significant items do not include the amortisation of purchased and developed
software and is retained in both the reported and adjusted results as these
are considered to be core to supporting the operations of the business. This
is because there are similar comparable items included from purchased and
developed software in the reported results for ongoing businesses as well as
the acquired items.
A1. Operating costs by type
2024 IFRS Significant items Adjusted Allocated as Front Office Allocated as Support
Reported
£m £m £m £m £m
Employment costs 1,404 (8) 1,396 1,064 332
General and administrative expenses 502 (35) 467 326 141
1,906 (43) 1,863 1,390 473
Depreciation of PPE and ROUA 42 (6) 36 - 36
Impairment of PPE and ROUA 6 - 6 - 6
Amortisation of intangible assets 72 (42) 30 - 30
Impairment of intangible assets 2 - 2 - 2
2,028 (91) 1,938 1,390 548
2023 IFRS Significant items Adjusted Allocated as Front Office Allocated as Support
Reported
(restated)(2) (restated) (restated)(2) (restated)(2)
(restated)(2)
£m £m £m £m £m
Employment costs 1,360 (6) 1,354 1,035 319
General and administrative expenses 507 (38) 469 309 160
1,867 (44) 1,823 1,344 479
Depreciation of PPE and ROUA 45 - 45 - 45
Impairment of PPE and ROUA 11 (11) - - -
Amortisation of intangible assets 72 (44) 28 - 28
Impairment of intangible assets 86 (86) - - -
2,081 (185) 1,896 1,344 552
1. PPE = Property, plant and equipment. ROUA = Right-of-use-assets.
2. Reported general and administrative expenses of £4m were reclassified to
align with the change of presentation of foreign exchange gains and losses now
presented as Other gains/losses' and related derivatives reported as finance
expenses.
A2. Adjusted earnings per share
The earnings used in the calculation of adjusted earnings per share are set
out below:
2024 2023
£m £m
Adjusted profit for the year 244 229
Non-controlling interest (3) (2)
Adjusted earnings attributable to equity holders of the parent 241 227
Weighted average number of shares for Basic EPS 756.9 777.7
Adjusted Basic EPS 31.8p 29.2p
Weighted average number of shares for Diluted EPS 785.7 794.2
Adjusted Diluted EPS 30.7p 28.6p
A3. Adjusted EBITDA and Contribution
2024 2023
£m £m
Adjusted EBIT 324 299
Add: Depreciation of PPE and ROUA 36 45
Add: Impairment of PPE and ROUA 6 -
Add: Amortisation of Intangibles 30 28
Add: Impairment of Intangibles 2 -
Adjusted EBITDA 398 372
Less: Operating income (10) (22)
Add: Operating income reported as significant items - 8
Add: Other gains/losses 6 11
Add: Management and support costs 473 479
Contribution 867 848
A4. Free cash flow
2024 2023
£m £m
Net cash flow from operating activities per Consolidated Cash Flow Statement 353 286
Add: Dividends from associates and joint ventures (Cash flow: Financing 20 22
activities)
Less: Dividends paid to non-controlling interests (Cash flow: Financing (2) (2)
activities)
Less: Expenditure on intangible fixed assets (Cash flow: Investing activities) (55) (43)
Less: Purchase of property, plant and equipment (Cash flow: Investing (9) (12)
activities)
Add: Interest received (Cash flow: Investing Activities) 39 30
Free cash flow 346 281
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