Interdealer broker Tullett Prebon acquired MOAB Oil broker and announced Financial Results 

Tullett Prebon plc (the “Company”) announced that it has acquired MOAB Oil, Inc. (“MOAB”) a leading independent broker of physical and financial instruments in the energy markets.

MOAB’s expertise includes physical gasoline, gasoline blending components, oil product swaps, ethanol, ethanol derivatives, natural gas financial derivatives, crude oil, distillates, weather and power products.

MOAB has long-established relationships with major oil companies, gasoline blenders, oil trading divisions of investment banks and smaller domestic trading firms. Utilising proprietary models and the latest technology it provides its clients with insights on trends, evolving regulations and trading economics which affect their markets.

MOAB was incorporated in 2003. The business has 23 brokers and is based in Norwalk, Connecticut. MOAB generated revenue of $23.7m (£14.4m) in 2014. The three senior principals, who intend to remain with the Company following the acquisition, will further build out the energy business, using the scale and depth of the Tullett Prebon platform to reach clients with a broader range of products and services. MOAB intends to add complementary desks and broking products and to expand the footprint of the business internationally.

The acquisition is being funded from the Company’s existing cash resources and comprises an initial cash consideration of US$12.3m (£7.8m), plus an amount equal to the working capital in the business, including cash. Further deferred contingent consideration is payable from the first anniversary of completion through to the fifth anniversary. The amount of deferred contingent consideration is dependent upon the performance of the business over the five year period and has an initial fair value estimated to be US$14.3m (£9.1m).

John Phizackerley, CEO of Tullett Prebon, said, “The acquisition of MOAB is consistent with our strategic aim to build our global energy and commodities franchise. MOAB is an excellent fit with our existing crude oil and energy broking activities. It complements our recent acquisition of PVM and further establishes our leading position in the energy sector. The team at MOAB shares our commitment to serving customers with professionalism and integrity and we are delighted that the senior principals will be working alongside us to build our energy business.”

Kenneth Utting, President of MOAB, said, “In Tullett Prebon, we have found an ideal partner for MOAB. Together we will be able to expand and enhance our valuable franchise, extend our reach geographically, reach more customers and provide an even better quality of input on market depth and colour and service in execution of oil trades.”

Financial and Interim Management Report
For the six months ended 30 June 2015

Tullett Prebon plc (the “Company”) announced its results for the six months ended 30 June 2015.

Operational Summary

• Revenue up 15%, Operating profit up 20%
• Outstanding performance from PVM
• Acquisition of MOAB strengthens Energy in the Americas
• Resilient performance from the broking business
• Strong contribution from Information Sales and RMS
• Tullett Prebon Information named best data provider for fifth consecutive year

Financial Highlights
Underlying, before exceptional and acquisition related items

• Revenue £415.7m (2014: £360.3m)
• Operating profit £60.6m (2014: £50.3m)
• Operating margin 14.6% (2014: 14.0%)
• Profit before tax £52.9m (2014: £43.2m)
• Basic EPS 17.7p (2014: 16.0p)

Reported, after exceptional and acquisition related items

• Profit before tax £111.1m (2014: £8.9m)
• Basic EPS 36.2p (2014: 1.3p)

A table showing Underlying and Reported figures for each period detailing the exceptional and acquisition related items is included in the Financial Review.

Dividend
As in previous years, the interim dividend for 2015 has been set at a level equal to 50% of the final dividend paid for the previous year. This approach to setting the interim dividend is expected to continue.
The 5.6p per share interim dividend will be paid on 12 November 2015 to shareholders on the register at close of business on 23 October 2015.

John Phizackerley, Chief Executive of Tullett Prebon plc, commented:
“The actions that were taken during 2014 to develop the business and to better align the cost base with the lower level of activity have resulted in a 15% increase in revenue to £415.7m and a 20% increase in underlying operating profit to £60.6m.

The performance of PVM since the completion of the acquisition in November last year has been strong. The Company’s Information Sales and Risk Management Services businesses have also performed strongly. The level of activity in the
wholesale OTC financial markets has been more stable during the first half than in recent periods although activity has continued to be relatively subdued. There has been higher volatility in some financial markets in 2015 compared with a year ago, but despite the economic and political dramas that have been playing during the first half of the year, volatility and trading volumes in many product areas have continued to be sporadic.

The Company’s goal is to become the world’s most trusted source of liquidity in hybrid OTC markets and the best operator in global voice broking. The Company’s plan is to build revenue and raise the quality and quantity of earnings through further
diversification of the client base, continued expansion into Energy and commodities, and building scale in the Americas and Asia Pacific, whilst preserving the business’s core franchises.”

Forward-looking statements:
This document contains forward-looking statements with respect to the financial condition, results and business of the Company. By their nature, forward-looking statements involve risk and uncertainty and there may be subsequent variations to
estimates. The Company’s actual future results may differ materially from the results expressed or implied in these forward-looking statements.

Source: Tullett Prebon

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