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Nex Group, the UK trading and technology group, has raised its long-term cost savings target as it repositions itself to focus on electronic trading in over-the-counter markets.
The group, headed by entrepreneur Michael Spencer, reported in its interim results that it had found another £15m of annualised cost savings in addition to the £25m it previously targeted, over a three-year period.
The numbers were the first full set of interim results reported by Nex since its previous incarnation, ICAP, sold off its global voice broking business to rival Tullett Prebon in a deal worth £1.3bn.
For the six months to September 30 revenues rose 7 per cent to £287m on a constant currency basis. Statutory pre-tax profits fell to £48m from £66m. Trading operating profit, excluding one-off items, decreased by 1 per cent to £66m.
It had already warned that increased spending would curb first half margins at its post-trade business, which processes millions of deals in fixed income, derivatives, equities and foreign exchange markets. It accounts for just under half of group profits. First-half operating margins at the unit fell to 20 per cent. This compares with 29 per cent in its full-year results.
Two weeks later Jenny Knott, the unit’s head, said she would step down. In her place Mr Spencer appointed Ken Pigaga, the architect of its recent cost-cutting programme. It has stuck to its long-term targets of annual revenue growth of 7 per cent -10 per cent and operating margins for its two main businesses, trading and post-trade, of more than 40 per cent by 2020.