Interim Management Statement

RNS Number : 5189S

Tullett Prebon PLC

08 November 2013

 

8 November 2013

Tullett Prebon plc

Interim Management Statement

Tullett Prebon plc (the "Company") is today issuing its Interim Management Statement in relation to the period from 1 July 2013.

Business Update

Market conditions have continued to be challenging.  The overall level of activity in the financial markets has remained subdued reflecting low volatility, the more onerous regulatory environment for our customers and the considerable uncertainty over the impact of new regulations covering the OTC markets.  Although yield curves for major currencies have shifted upwards and have steepened compared with a year ago, measures of market volatility have not increased, and there have been only isolated periods of higher levels of market activity which have not been sustained.

Consistent with the lower level of market activity, revenue in the four months July to October of £252m was 9% lower than in the same period last year both as reported and at constant exchange rates.  Year to date (January to October) revenue of £692m was 5% lower than reported for the same period last year (6% lower at constant exchange rates).

In September the Company's swap execution facility, tpSEF Inc. ("tpSEF"), was granted temporary registration by the Commodity Futures Trading Commission ("CFTC"), and tpSEF started operating on 2 October when the Dodd-Frank Act regulatory reforms in the United States relating to swap execution facilities came into force.  tpSEF offers execution services compliant with the new regulatory framework in the five asset classes within the scope of the legislation.

For the fourth consecutive year the Company was voted number one in more product categories than any other single interdealer broker in Risk magazine's 2013 annual interdealer rankings published in September.  Dealers across the wholesale banking markets in all three regions in which the business operates voted Tullett Prebon number one in 34 out of 94 derivatives product categories, reflecting the Company's focus on first class service and delivery of flexible and innovative products.

The continued successful development of our Energy business was recognised by the Company being voted Commodities Interdealer Broker of the Year in Derivatives Week magazine's 2013 awards in September.  This follows the business being voted Broker of the Year at the 2013 Energy Risk Awards in the first half of the year, and reflects the expansion of market coverage in all three regions and the quality of service provided to clients in this asset class.

The Company has opened offices in Mexico and in South Africa, extending its physical presence into markets that had previously been served from New York and London respectively. The establishment of local offices reinforces the Company's commitment to these markets and facilitates the development of services tailored to them.

The Company's Information Sales business continues to expand its product offering and has recently started to provide data on the bond markets in China and in India.  The bond markets in both countries have seen significant growth in recent years and the provision of accurate, independent data to market participants will assist in the further development of the on-shore capital markets in those countries.

Since 30 June, £3.5m of costs have been incurred in relation to the legal action between the Company and BGC relating to the raid on the business by BGC in the second half of 2009, taking the year to date exceptional charge for major legal actions to £13.8m.  The outcome of the FINRA arbitration on the claim brought by the subsidiary companies in the United States directly affected by the raid is now expected to be determined by the end of January 2014.  The separate action being pursued by the Company and the directly affected subsidiaries in the New Jersey Superior Court, alleging, among other causes of action, violations under the NJ RICO Act, is expected to go to trial in the second quarter of 2014.

The Company's financial position remains strong.

Enquiries:

Nigel Szembel, Head of Communications, Tullett Prebon plc

Direct: [phone]

 

END

 

 

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