TP Icap stock surges 10 per cent on energy market boom

TP Icap's energy and commodities arm was a powerhouse for the firm last year, growing 18 per cent from £387m in 2022 to £458m.

FTSE 250 finance firm TP Icap’s results were ahead of expectations as its energy and commodities arm boomed.

The interdealer broker reported today that 2023 profit totalled £74m, compared to £103m in 2022, even as revenue grew three per cent overall.

Share price jumped more than 10 per cent this morning on the strong results.

The group’s energy and commodities arm was the largest contributor to the group’s topline growth. Revenue at the division grew 18 per cent from £387m in 2022 to £458m last year.

TP Icap cited the “improved market activity across oil, power and gas,” due to the disruptions caused by the war in Ukraine, which pushed up trading activity.

Meanwhile, revenue remained flat at its core group of global broking and Liquidnet, its equities trading business acquired in 2021.

Parameta Solutions, TP Icap’s data business, which the group has been under pressure to sell, saw an uptick in profit. Revenue increased by £14m while costs increased by only £9m.

Peel Hunt analysts Stuart Duncan and Robert Sage emphasised that “the growth in Parameta means it has become an increasingly important asset that was not being valued appropriately”.

Nicolas Breteau, CEO of TP Icap, said: “Our transformation is progressing well. Fusion is delivering, with client adoption an important focus.

“Turning to diversification, we have consolidated our credit activities across the group; Liquidnet Credit is now being managed by global broking to accelerate delivery of our dealer-to-client proposition. The opportunity in the large, and growing, electronic credit market is substantial.

“We have met, or exceeded, the majority of our revised 2023 targets. Since our capital markets day in 2020, the group is growing the top line, is more diversified, more profitable, and more cash generative.”

TP Icap also said that following a £30m share buyback programme completed in January, it would earmark another £30m for share repurchases.

The group’s share price has been slowly climbing and has risen over 20 per cent in the past six months.

“We continue to assess opportunities to free up more cash to pay down debt, and/or return capital to shareholders, subject to our balance sheet needs,” added Breteau.