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Broker TP ICAP points to Brexit hit as CEO steps down

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Broker TP ICAP points to Brexit hit as CEO steps down

Broker TP ICAP points to Brexit hit as CEO steps down
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(Reuters) - TP ICAP <TCAPI.L> announced the departure of Chief Executive Officer John Phizackerley on Tuesday as it blamed Brexit-related costs for what it said would be a dip in 2018 underlying operating profit below analysts' expectations.

The world's biggest interdealer broker, which changed its name from Tullett Prebon after it bought London-based ICAP's voice broking business, said full-year earnings would be hurt by additional costs of about 10 million pounds ($13.2 million) related to Britain's planned departure from the European Union and new EU rules on market transparency.

It said Phizackerley would be replaced by Nicolas Breteau, who currently leads TP ICAP's largest business - global broking.

TP ICAP cut its cost saving target to 75 million pounds from 100 million pounds annually by the end of 2019, blaming ongoing investment needs in "the light of the evolving industry landscape".

TP ICAP and other brokers have been suffering for several years from generally lower volatility on financial markets as investors reined in risk-taking and stock markets racked up almost a decade of constant gains.

The company, which brings together buyers and sellers in financial, energy and commodities markets, added that additional capital requirements and credit refinancing were likely to push up finance costs to around 35 million pounds this year.

As a result, 2018 earnings per share (EPS) are expected to be slightly below the bottom-end of the range of analyst expectations, the company said.

Analysts are expecting underlying EPS of 37 pence, with a range of 34.9 pence to 39 pence, according to company-derived consensus estimates.

The company said 2019 would see 25 million pounds in costs related to Brexit, regulation, legal needs, and IT security.

($1 = 0.7557 pounds)

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Amrutha Gayathri)

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