May 2024

TP ICAP Group (TCAP) headquartered in the UK, operates as a liquidity and data solutions company. The company acts as a middleman, facilitating transactions and providing valuable insights to financial markets. Its core business involves connecting buyers and sellers in various financial markets, offering services like trade execution, settlement, and data-driven solutions.


Overview
The company operates through several segments, each catering to different aspects of the financial industry. The global broking segment, represented by brands like Tullett Prebon and ICAP, serves clients in areas such as interest rates, foreign exchange, equities, and credit products. This segment essentially helps clients execute trades efficiently and securely.

The energy and commodities segment is involved in markets such as oil, gas, power, and metals. Here, TP ICAP facilitates transactions in these markets, allowing companies to buy and sell commodities like oil and metals, helping them manage their risks and optimise their operations.

TP ICAP's recently purchased Liquidnet segment provides execution services to a wide range of clients, including hedge funds and asset managers. Acting as an agency, it executes trades on behalf of these clients, ensuring fair and efficient transactions in various asset classes.

Lastly, the Parameta Solutions segment offers market data and analysis to financial institutions, helping them make informed decisions in complex markets. There has been a lot of chatter around this segment, as some shareholders see it as being more valuable than the rest of the company put together.

Financial Performance:
In recent times, TP ICAP has done well to navigate market challenges while capitalising on emerging opportunities, achieving commendable financial milestones, including record performances in its Energy & Commodities (E&C) division, successful debt reduction, and a shareholder-friendly buyback program.

In 2023, TP ICAP reported a 3% increase in Group revenue and an 8% rise in adjusted EBIT, reflecting its commitment to productivity and tight cost control. While certain market volatilities impacted segments like Liquidnet, the buoyant energy market conditions propelled E&C to record growth. Despite challenging stock market conditions, TP ICAP's strategic adjustments, including right-sizing operations in Liquidnet, have positioned the company for future growth. Additionally, the company's dividend policy, exemplified by a recommended final dividend of 10.0 pence per share, reflects its commitment to rewarding shareholders.

Strategic Initiatives and Business Development
TP ICAP's strategic focus on key businesses, notably Global Broking and E&C, underscores its commitment to long-term growth. The ongoing rollout of Fusion, the electronic platform, highlights efforts to enhance client adoption and productivity. Moreover, the review of E&C's strategy aligns with market shifts towards the Energy Transition, offering opportunities for diversified revenue streams. Parameta Solutions, TP ICAP's data unit, has emerged as a valuable asset, prompting exploration for unlocking shareholder value, potentially through an IPO.

Investor Sentiment and Future Outlook
Recent investor pressure has led TP ICAP to think about separating Parameta Solutions as a standalone entity, reflecting the recognition of its value potential. The company's robust financials, highlighted by better-than-expected profits and a new share buyback program, have bolstered investor confidence. With Parameta's growth outpacing other business units and the prospect of a potential IPO, TP ICAP presents an attractive investment opportunity. 

Conclusion:
In summary, TP ICAP's strategy, resilient financial performance, generous dividends and proactive measures to unlock shareholder value position it as an appealing investment prospect in the evolving financial landscape. We will be adding it to the CC portfolio on Tuesday. 

RETURNS TABLE  

Month Company Ticker Symbol Purchase Date Current Stock Price (p) Dividend Yield To Date (%) Re-Invested (£) Regular Monthly Investment (£) Purchase Price (p) Sold? Dividend Income (£) Growth with Dividends Growth without Dividends
February 2023 Cranswick PLC CWK 06/02/23 3569.00 1.79% £0.00 £2,118.78 3082.00 Yes £37.93 17.6% 15.8%
March 2023 Avingtrans PLC AVG 06/03/23 387.50 1.02% £0.00 £2,805.08 435.00 No £28.71 -9.9% -10.9%
April 2023 Vesuvius PLC VSVS 03/04/23 472.83 5.48% £0.00 £1,465.86 410.00 Yes £80.35 20.8% 15.3%
May 2023 Tyman PLC TYMN 02/05/23 296.00 1.73% £0.00 £1,212.35 249.19 No £20.96 20.5% 18.8%
June 2023 PayPoint PLC PAY 05/06/23 541.75 6.67% £0.00 £1,460.29 407.14 Yes £97.42 39.7% 33.1%
July 2023 Pan African Resources PLC PAF 03/07/23 22.35 2.57% £0.00 £1,255.45 12.88 No £32.23 76.1% 73.5%
August 2023 Hikma Pharmaceuticals PLC HIK 01/08/23 1863.00 0.00% £0.00 £879.21 2089.00 No £0.00 -10.8% -10.8%
September 2023 Castings PLC CGS 04/09/23 329.00 1.20% £6,268.97 £889.28 343.63 No £86.03 -3.1% -4.3%
October 2023 Kenmare Resources PLC KMR 02/10/23 355.00 0.00% £4,128.93 £1,086.90 416.00 No £0.00 -14.7% -14.7%
November 2023 Pets at Home PLC PETS 06/11/23 270.00 1.52% £2,904.50 £0.00 299.00 No £44.26 -8.2% -9.7%
December 2023 Serco Group PLC SRP 04/12/23 186.40 0.00% £3,517.95 £677.78 158.76 No £0.00 17.4% 17.4%
January 2024 Avingtrans PLC AVG 08/01/24 387.50 0.00% £0.00 £2,335.92 392.00 No £0.00 -1.1% -1.1%
February 2024 Future PLC FUTR 05/02/24 697.00 0.00% £0.00 £1,494.79 716.12 No £0.00 -2.7% -2.7%
March 2024 Morgan Sindall Group PLC MGNS 04/03/24 2270.00 0.00% £1,446.59 £1,045.43 2307.43 No £0.00 -1.6% -1.6%

This is our portfolio tracking table, which we will update every month on this page. 

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