World’s largest derivatives broker TP ICAP shares dive 30%
LONDON: TP ICAP Plc fired Chief Executive Officer John Phizackerley as the world’s largest derivatives broker warned returns will be lower than expected this year. The shares fell more than 30 percent in early trading.
The CEO was dismissed by the board, a person familiar with the matter said. Phizackerley, 56, will be replaced by Nicolas Breteau, who runs the firm’s global broking business, TP ICAP said in a statement Tuesday.
TP ICAP, created by Phizackerley’s merger of the former Tullett Prebon with much of billionaire Michael Spencer’s ICAP Plc less than two years ago, said increased expenses would push earnings per share for 2018 below the bottom end of analysts’ expectations. The company cited a litany of cost burdens, from information-technology spending to this year’s MiFID II regulations that have disrupted the trading world in Europe.
“It has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process,” said TP ICAP Chairman Rupert Robson. “The evolving landscape is driving up costs across our industry.”
TP ICAP’s shares fell 33 percent to 282.2 pence at 8:45 a.m. in London, the biggest intraday drop in more than a decade. That slashed its market value to about 1.6 billion pounds ($2.1 billion).
ICAP Deal
The London-based company, which has about 3,425 brokers and operates in 24 countries, lowered its annualized cost savings target by 25 million pounds to 75 million pounds by the end of 2019. It said finance costs would increase to about 40 million pounds.
TP ICAP makes the vast majority of its revenue from brokers who match trades over the phone, mostly between banks. It emerged as the world’s biggest inter-dealer broker after Tullett bought the voice-broking business of arch-rival ICAP in December 2016, which more than doubled its revenue.
At the time, Phizackerley said the deal would cut costs in compliance, technology and other support functions. Spencer kept ICAP’s electronic-trading businesses as part of that deal.
The former CEO had been turning to electronic services, such as financial data and collateral management, in the hunt for new sources of revenue. Phizackerley, who was hired by Tullett in late 2014 after previously heading European operations for Nomura Holdings Inc., didn’t immediately respond to e-mails seeking comment.
TP ICAP has around 11 trading venues regulated under the European Union’s MiFID II overhaul of markets rules, more than most of its peers. - Bloomberg
The CEO was dismissed by the board, a person familiar with the matter said. Phizackerley, 56, will be replaced by Nicolas Breteau, who runs the firm’s global broking business, TP ICAP said in a statement Tuesday.
TP ICAP, created by Phizackerley’s merger of the former Tullett Prebon with much of billionaire Michael Spencer’s ICAP Plc less than two years ago, said increased expenses would push earnings per share for 2018 below the bottom end of analysts’ expectations. The company cited a litany of cost burdens, from information-technology spending to this year’s MiFID II regulations that have disrupted the trading world in Europe.
“It has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process,” said TP ICAP Chairman Rupert Robson. “The evolving landscape is driving up costs across our industry.”
TP ICAP’s shares fell 33 percent to 282.2 pence at 8:45 a.m. in London, the biggest intraday drop in more than a decade. That slashed its market value to about 1.6 billion pounds ($2.1 billion).
ICAP Deal
The London-based company, which has about 3,425 brokers and operates in 24 countries, lowered its annualized cost savings target by 25 million pounds to 75 million pounds by the end of 2019. It said finance costs would increase to about 40 million pounds.
TP ICAP makes the vast majority of its revenue from brokers who match trades over the phone, mostly between banks. It emerged as the world’s biggest inter-dealer broker after Tullett bought the voice-broking business of arch-rival ICAP in December 2016, which more than doubled its revenue.
At the time, Phizackerley said the deal would cut costs in compliance, technology and other support functions. Spencer kept ICAP’s electronic-trading businesses as part of that deal.
The former CEO had been turning to electronic services, such as financial data and collateral management, in the hunt for new sources of revenue. Phizackerley, who was hired by Tullett in late 2014 after previously heading European operations for Nomura Holdings Inc., didn’t immediately respond to e-mails seeking comment.
TP ICAP has around 11 trading venues regulated under the European Union’s MiFID II overhaul of markets rules, more than most of its peers. - Bloomberg
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