Financial Highlights
Underlying
Revenue £803.7m (2012: £850.8m)
Operating profit £115.4m (2012: £125.5m)
Operating margin 14.4% (2012: 14.8%)
Profit before tax £99.6m (2012: £111.3m)
Basic EPS 36.0p (2012: 39.5p)
Reported, after exceptional items
Profit before tax £84.4m (2012: Loss before tax £38.1m)
Basic EPS 30.1p (2012: Basic Loss per share 28.1p)
Commenting on the results, Rupert Robson, Chairman of Tullett Prebon plc, said:
"Market conditions were challenging throughout 2013 as the overall level of activity in the financial markets remained subdued, particularly during the second half of the year. The business has also faced higher costs relating to the regulatory readiness project. The impact of these factors on the underlying operating margin, however, has been largely offset by the actions that have been taken to reduce costs and to maintain flexibility in the cost base, to strengthen the broking business in all three regions, and to continue to develop the Information Sales and Risk Management Services businesses.
Revenue in 2013 was 6% lower than reported for 2012. Underlying operating profit in 2013 was £115.4m, 8% lower than reported for 2012. Underlying basic earnings per share were 9% lower than last year at 36.0p.
The Board is recommending an unchanged final dividend of 11.25p per share, making the total dividend for the year 16.85p per share, unchanged from that paid for 2012. The final dividend will be payable on 15 May 2014 to shareholders on the register at close of business on 25 April 2014."
Terry Smith, Chief Executive, added:
"The overall level of activity in the financial markets that we serve has been subdued for the last eighteen months reflecting persistently low volatility, the more onerous regulatory environment for our customers and the considerable uncertainty over the impact of new regulations covering the OTC derivatives markets, particularly in the United States.
Revenue in the first two months of this year is 12% lower at constant exchange rates compared with the relatively strong equivalent period last year. Market conditions worsened over the course of 2013 and it would be prudent to expect that market conditions will continue to be challenging. The actions we have taken to reduce fixed costs and to maintain flexibility in the cost base will continue to yield benefits in 2014, although this is likely to be at least partly offset by the expected increase in the run rate of costs related to the regulatory readiness project.
The business provides a valuable service to clients through its ability to create liquidity through price and volume discovery to facilitate trading in a wide range of financial instruments. The way in which this service is undertaken is in the process of change through the regulatory reforms being introduced in the United States and in Europe, and although it is currently not possible to accurately predict the impact these reforms will have, we believe that we will continue to provide a valuable service to clients. We have taken action to strengthen the business and we believe that we are well positioned to benefit from an upturn in the level of activity in the financial markets."
