ICAP IMS

ICAP is an interdealer broker and provider of post trade risk mitigation and information services.  I have a holding in my income portfolio (epic code: IAP).

ICAP issued their IMS today stating that the encouraging start to the financial year has continued throughout the quarter reflecting a number of positive developments, such as the prospect of a tapering of quantitative easing in the United States has stimulated volatility in the US Treasuries market and the publication of the US SEF (swap execution facility) rules has reduced regulatory uncertainty. Notwithstanding these positive developments, trading conditions remain challenging for a number of ICAP's businesses.

 

Of particular concern, they state that trading in commodities has contracted following the decision by a number of investment banks to cut activity in this area, this represented 13% of sales last year. 

 

They state that Group revenue for the quarter was 2% ahead of the same period last year and management's current expectations for the full year remain unchanged.  Market expectations for the year March 2014 are for sales to increase by just over 2.5% and normalised EPS to increase by 25% to 34.5p, with dividends at the same level as 2012 and 2013. 

 

Life is difficult for ICAP and with many of their banking customers struggling, it is difficult to see any major improvement in the near future, particularly in the current low growth, low interest economic environment.  So even with a yield of close to 6%, I may begin to seek an alternative home for the funds.