Highlights:
Group revenue decreased by 5% to £1,397m against a backdrop of challenging market conditions
Significant business initiatives launched during the year include the ICAP SEF, EBS Direct and Traiana's CreditLink
69% of operating profit contributed by the Electronic Markets and Post Trade Risk and Information divisions, up 3 percentage points on the prior year
Group trading operating profit margin maintained at 21% (2012/13 - 21%), with a further £25m of annualised cost savings identified during the year
Trading profit before tax decreased by 4% to £272m, in-line with previous guidance
Trading EPS (basic) up 1% to 33.2p
Proposed final dividend maintained at 15.4p per share
Michael Spencer, Group Chief Executive Officer, said: "The past year has presented many challenges. Trading conditions have been and are likely to remain extremely difficult. Weoperate in an industry which is undergoing an enormous amount of structural change with the emergence of a new post-financial crisis regulatory landscape. The trading operations of our bank customers, particularly their FICC franchises, continue to be scaled back as balance sheets are de-levered in response to increased capital requirements. In addition to these structural developments, cyclical factors such as the low interest rate environment, muted foreign exchange rate volatility and continued uncertainty over the long overdue economic recovery, have inevitably impacted revenue.
"This was also an extremely difficult year because of the yen Libor investigation. In September 2013, one of our Global Broking subsidiaries reached settlement agreements with the CFTC and FCA and paid penalties totalling £55 million relating to the involvement of certain brokers assisting bank traders seeking to manipulate yen Libor. We have learnt lessons from this experience and have taken steps to strengthen the business.
"Despite the ongoing structural challenges facing the industry, I believe that there are reasons to be optimistic. ICAP, with its diverse portfolio of businesses, is uniquely positioned to provide the full range of pre trade, execution and post trade services. I am convinced that the move towards increased electronic trading of derivatives, central clearing and risk mitigation are positive drivers for future growth. In anticipation of the new market place, we are investing heavily in delivering both new and enhanced product and technological solutions including the ICAP SEF, EBS Direct, TriOptima's triResolve and Traiana's CreditLink services.
"ICAP is profitable and cash generative. Over many years, we have demonstrated our ability to reposition our business to the changing market landscape. We will continue to pursue our long-term strategy to grow our Electronic Markets and Post Trade Risk and Information businesses and reshape Global Broking in response to the structural changes in the marketplace."
