LONDON -- The world's leading inter-broker dealer ICAP (LSE: IAP.L ) saw shares drop by over 4% this morning after announcing muted operations in its half-time report.
Blaming subdued activity in the global capital markets due to the eurozone crisis and the well-recorded difficulties faced by the global economy, ICAP saw group revenue drop by 14% compared to the same stage last year. The company also recently dropped out of the FTSE 100 (UKX).
However, September did see trading volumes pick up, but the company warned that "activity levels remain difficult to predict and it is not yet clear whether signs of improved confidence are sustainable."
Group chief executive officer of ICAP Michael Spencer commented: "The macroeconomic environment remains difficult and it's too early to judge if recent actions by the Federal Reserve and the European Central Bank will result in a sustained improvement in market confidence. In any event, we will continue to take the necessary action to constrain our cost base as well as position ICAP optimally for upcoming financial regulatory reform.
To combat this downturn, ICAP undertook a structural review and is on schedule to deliver a minimum of 50 million pounds per year run-rate savings by the year-end in March. As such, management predicted that if volumes in H2 remained depressed, pre-tax profits for the full year are expected to be in line with market expectations at around 307-346 million pounds.
Spencer went on to say: "We have a strong balance sheet and continue to convert profit very efficiently into cash. Our diversified business, together with multiple initiatives in our electronic and post trade businesses, will ensure that we benefit from regulatory and market changes and build on our position as the industry leader."
ICAP paid out a dividend per share of 22 pence previously, and currently sits on a yield of over 6%. With the share price dropping this morning, it could represent a decent opportunity for high-yield investors. However, with revenues down and warnings from both management and the market, it's not a very secure option...
But if you are seeking similar high-yielding opportunities, this special free report could assist your investment decisions.
"8 Popular Dividend Shares Held by Britain's Super Investor" reveals the favorite income stocks held by Neil Woodford -- the City legend who has thrashed the FTSE 100 during the 15 years to 2011 by favoring steady and reliable blue chips.
Just click to download the free Neil Woodford report today. But hurry, as this report will remain available for a limited time only.
Investing is by no means easy in today's uncertain economy. That's why we've published "Three Top Sectors" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.
Further Motley Fool investment opportunities:
- The FTSE 100 Share Warren Buffett Loves
- 8 Dividend Plays Held by Britain's Super-Investor
- What Every New Investor Needs to Know
Sam does not own any share mentioned in this article.