A profits warning from Icap, the world’s largest interdealer broker, prompted a sell-off in its shares today, with the company losing almost a fifth of its value. Icap said it expected to make between £295m and £315m this year, significantly less than the £336m the City had been expecting.
Michael Spencer, Icap’s founder and chief executive, blamed the profits warning on the fact that some of the company’s newer businesses were taking longer to than expected to turn a profit, though he said the first few weeks of 2010 had seen an improvement in trading.
Mr Spencer also warned that Icap was concerned about regulatory uncertainty, amid the continuing debate about reforms of the way in which financial services are policed following the credit crunch.
Icap was forced to defend Mr Spencer, who sold £45m worth of Icap shares three weeks ago. That stake would today be worth around £30m.
Icap said Mr Spencer, who is treasurer of the Conservative Party and a confidante of Tory leader David Cameron, had not broken any rules by selling the stake. It pointed out that at the time of the share sale, Mr Spencer would have been unaware of December’s trading performance, the perid during which the slowdown began.