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US tax cuts to benefit Nex Group as revenues rise
Shares in financial technology company Nex Group, formerly ICAP, surged on Thursday after it said that changes to the US tax system will see its effective tax rate drop and posted a rise in third-quarter revenue.
In a trading statement for the quarter to the end of December 2017, the group said changes to the US tax system will see its effective tax rate decline to between 22% and 24% next year.
Group revenue was up 3% in the third quarter on a constant currency basis and 6% higher year-to-date, with revenue in Nex Optimisation 10% higher on the quarter and 6% firmer year-to-date, revenue markets division fell 10% on the quarter.
Chief executive officer Michael Spencer said: "Market volatility was low during the quarter in contrast with last year when volumes picked up in the aftermath of the US presidential election. Nevertheless we are making headway with our transformation programme as we continue to reshape Nex for tomorrow's financial markets and reduce costs.
"Since the beginning of January, our markets have been noticeably more active as FX volatility has increased from historic lows. However, it is still too early to assume with any confidence that the previous and prolonged period of subdued market conditions has come to an end. We are meanwhile on track to deliver the expected improvement in Nex Optimisation's operating margin in the second half of the year and these two factors give us confidence in the outlook for the current year."
At 1030 GMT, the shares were up 8.2% to 641.50p.