Profits soar at Tullett Prebon
INTERDEALER broker Tullett Prebon surprised the City yesterday as it revealed soaring interim profits that were comfortably ahead of market expectations, boosted by the continuing volatility in the market.
Tullett said first half pre-tax profits were 23 per cent ahead of the same period last year at £91.7m, while revenue grew 11 per cent to £517.9m.
Chief executive Terry Smith said lower levels of risk appetite among investors had benefited the firm, which saw an increase in trading in more traditional flow products rather than complex structured products. But he said the primary driver of growth was still market volatility.
“The financial markets remain unsettled, and volatility in interest rate structures, currency parities and credit spreads seems likely to persist, while government bond issuance will continue to be at high levels,” he said.
Tullett confirmed it expects to deliver “a good outcome” for the full year, but does not expect to see a recurrence of the boost it received in the second half of last year, after the collapse of Lehman Brothers caused extreme turbulence in the markets.
Tullett also benefited over the first six months of 2009 from a cost-cutting drive, having reduced headcount by six per cent since June last year.
However, the majority of jobs were lost in non-broker roles, while the firm actually continued to hire new brokers in its European business, where revenue rose by 16 per cent.