Shore Capital sees further upside at TC ICAP after 1H beat

Shore Capital has reiterated its ‘buy’ stance on TP ICAP after the liquidity and data solutions specialist delivered a forecast-beating set of half-year results on Wednesday.

Underlying profits came in at £163m, up 15% year-on-year and ahead of Shore Capital’s £156m estimate, while the interim dividend of 4.8p was also higher than the 4.55p expected. Revenue, up 5% year-on-year at £1.13bn, was in line with forecasts.

The broker also highlighted the announcement of a £30m share buyback programme. “£100m of trapped capital has now been freed up six months ahead of schedule and will be used to pay down debt, with further opportunities to free-up cash being explored,” explained analyst Vivek Raja in a research note.

After an 11% fall in the share price so far this year, underperforming the FTSE All-Share Index by 12%, Shore Capital has retained its positive investment case on the stock with a prevailing fair value estimate of 200p.

“TCAP’s valuation remains modest on a 12-month forward PE of <6x, on our prevailing estimates, towards the low end of its historical valuation range,” Vivek writes.

The stock was up 9% at 168.80p by 1030 BST.