Good morning, everyone. Thank you for joining us, both in person and online. This is our agenda for today. I will start with a short business overview. Robin will take you through our financial performance, the heads of our four divisions, Dan Fields, Andrew Polydor, Mark Govoni, and Eric Sinc lair, will report on their businesses. I will wrap up before we take your questions. Let's begin with the headlines, where the movements are in constant currency, unless I say otherwise. The group revenue increased 1%, or 5% in reported currency, whilst contribution was up 8%, or 13% on a reported basis, as we focused on productivity, contribution, and tight cost management. Our two largest business divisions are Global Broking and Energy & Commodities.
Revenue in Global Broking decreased 1%, but was up 3% in reported currency against a strong comparator with exceptional volatility last year, caused by the start of war in Ukraine. The revenue per broker grew 6%, with broker contribution up 24%, including Russian provisions. This again reflects our emphasis on productivity and contribution and a reduction in average broker headcount. Energy & Commodities performed very strongly across all its key asset classes: oil, power, and gas. Revenue grew 12%, or 17% in reported currency, as energy markets recovered from last year's dislocation. Liquidnet broke even in the first half, despite challenging equity market conditions and ongoing investment in our credit platform. We have now delivered GBP 38 million of annualized integration cost synergies. This exceeds our GBP 30 million target, six months ahead of schedule.
Parameta Solutions revenue increased 5%, or 11% in reported currency. Overall, we generated an uplift in margin and profitability. Our adjusted EBIT was up 7% to GBP 163 million, a margin of 14.4%. We continue to manage our capital dynamically. We have freed up GBP 100 million of cash for debt reduction, six months ahead of schedule, we have achieved this while continuing to invest in the business. Our interim dividend is GBP 0.048 per share, up 7%, will be paid to eligible shareholders in November. We have also announced a share buyback of GBP 30 million starting today. Moving now to our strategic highlights. Our key strategic priorities are transformation, diversification, and dynamic capital management.
In Global Broking, the rollout of our electronic platform, Fusion, is on track, and it is now live on 44% of in-scope desks. We are making good progress with client adoption. In rates, for example, the number of unique client logins is up 43% over the past 12 months. We continue to diversify our business by client base, asset class, and non-broking revenue. In Energy & Commodities, we are transforming the division in three ways. First, by deploying more technology in our oil franchise. Second, by expanding broking desks in carbon credits, biofuels, and renewables. Third, by monetizing more energy-related data with our leading data business, Parameta Solutions. Parameta Solutions was recently approved by ESMA as a benchmark administrator. We have already launched new indices for Liquefied Natural Gas, and there are more to come.
We are well progressed in the consolidation of Parameta companies, which will enable it to develop more partnerships with third-party data providers. In Liquidnet, we are diversifying equities by growing algorithmic program trading and inter-region execution. Our Credit platform is developing at pace. We completed the connection of two major investment banks on our Dealer-to-client proposition, with a third bank in the final certification stages. Turning now to capital management. Our approach to capital management has four components: investing for organic growth, reducing debt, a clear dividend policy, and returning capital where appropriate. First, we are investing to grow the business with the deployment of Fusion in our broking businesses, the building of Liquidnet Credit, and the expansion of Parameta Solutions. Second, we are reducing our debt by GBP 100 million. This will decrease our future net finance costs and increase our investment-grade headroom.
Third, we have a clear dividend policy with a commitment to a 50% payout ratio of adjusted post-tax earnings for the full year. Finally, we have announced a buyback of GBP 30 million, which starts today. We continue to assess opportunities to free up more cash. Thank you very much. I'll now hand over to Robin to take you through our financial performance.
Thank you, Nico, and good morning, everyone. As you have heard, we delivered a good performance against a strong comparator last year. I'll start with the income statement, where, as usual, my comparisons are in constant currency. Total group revenue increased 1% to GBP 1.1 billion. Adjusted EBITDA was up 2% at GBP 200 million, and the margin grew 0.6 percentage points to 17.7%. Adjusted EBIT increased 7% to GBP 163 million, and EBIT margin was 14.4%, up 0.8 percentage points. Net finance costs of GBP 17 million were down 35%. This is due to a GBP 10 million increase in interest income as we actively manage the yield on our cash to benefit from rising rates. The effective tax rate increased to 27.4%.
Taken together, this resulted in adjusted earnings before significant items of GBP 117 million, up 17%. Adjusted earnings per share also grew 17% to GBP 0. 15 . As Nico said earlier, we plan to pay an interim dividend of GBP 0.048 , an increase of 7%. Our policy targets a 50% payout ratio of full-year adjusted earnings. This typically includes 30%-40% of first-half earnings, with the balance paid in the final dividend. Let's turn now to the year-on-year movements in our earnings before interest and tax. Adjusted EBIT was GBP 163 million, compared with GBP 142 million reported for the first half last year. If you retranslate GBP 142 million using 2023 exchange rates, it results in EBIT of GBP 153 million, giving us the basis for a like-for-like comparison.
Contribution increased by GBP 32 million, mainly driven by our focus on delivering more profitable revenue. Management and support costs were GBP 10 million higher, driven by the impact of inflation, but this was largely offset by the delivery of a further GBP 8 million of Liquidnet integration savings in year. As Nico said, we have now achieved GBP 38 million of annualized synergy savings, above our GBP 30 million target and six months ahead of schedule. The strengthening of Sterling towards the end of the first half contributed to a GBP 20 million negative movement in FX on the retranslation of net financial assets. Turning now to the business divisions, where, again, my revenue comparisons are in constant currency, to give you a clear picture of the underlying trends. I'll start with Global Broking.
Total revenue in Global Broking was down 1% at GBP 656 million, against a strong first half last year, with the exceptional volatility following the invasion of Ukraine. Rates is our largest and most profitable asset class, accounting for nearly half of Global Broking revenue. Revenue here decreased 1% to just under GBP 300 million. Credit revenue was down 3% to GBP 60 million . Foreign exchange and money markets grew 3% to GBP 159 million. Excluding the impact of provisions related to Russia, booked in the first half last year, contribution margin increased 1.2 percentage points to 41.2%. Revenue per broker grew 6%, with contribution per broker up 9%, excluding Russian provisions, or 24%, including them.
Adjusted EBIT grew 24% to GBP 133 million, and margin increased from 16.7% to 20.3%. Turning next to Energy & Commodities. Total revenue increased 12% to GBP 231 million as market conditions normalized. There was greater global demand for oil and the price of gas in Europe declined, resulting in higher volumes. Energy & Commodities benefited from these developments with strong performances across the three main asset classes: oil, power, and gas. Contribution margin increased from 32.5% to 34.2%. Adjusted EBIT grew 52% to GBP 38 million, and adjusted EBIT margin was 3.8 percentage points higher at 16.5%. Turning now to Liquidnet. Total revenue decreased by 6% to GBP 169 million. Equities markets were once again challenging.
Whilst there was some improvement in stock market performance, many institutions maintained a risk-off approach in the large block market. Revenue from cash equities decreased 22%, broadly in line with U.S. large block volumes. Other asset classes within the rest of the division delivered strong revenue growth of 22%, driven by a record performance in relative value. In light of challenging market conditions, we are controlling costs carefully in Liquidnet while continuing to invest in our credit business. Despite this continued investment, the division broke even in the first half, a significant improvement on the adjusted EBIT loss of GBP 24 million for the full year 2022. Turning now to our data and analytics business, Parameta Solutions. Revenue grew 5% to GBP 91 million, in line with global spending on financial market data.
Revenue growth in the first half was below the historical average due to the non-recurrence of high client audit revenue recorded in the first half last year. Adjusted EBIT grew 6% to GBP 38 million at a margin of 41.8%. The division continues to target double-digit EBIT growth for the full year. As Nico mentioned, the work to consolidate the Parameta companies is well progressed, enabling it to pursue relationships with third-party data providers. Moving next to capital management. We are managing our capital dynamically, which has been enabled by our redomiciliation to Jersey in 2021. At our first half results last year, we committed to freeing up GBP 100 million of cash, and I'm pleased to report that we have achieved this goal earlier than planned.
We are using this cash to pay down debt. You can see here the pro forma debt reduction of GBP 101 million that we will deliver a year from now. This includes repaying our vendor loan note with Liquidnet, which matures in March 2024, and settling the deferred consideration for the acquisition of Liquidnet, which would have required financing in March 2024. We have announced a share buyback this morning of GBP 30 million, which starts today. This will be funded by a range of further initiatives, as well as cash generated from the business. As Nico said, we continue to review our capital and assess opportunities to free up further cash. Moving now to significant items. These are not included in our adjusted results so that we can better measure business performance and compare with other reporting periods.
Significant items pre-tax were GBP 55 million, 25% higher than the first half last year, or GBP 51 million post-tax. This was mainly driven by an additional GBP 5 million onerous lease provision as we finalized our Liquidnet property rationalization, a GBP 12 million increase in legal and regulatory charges reflecting legal costs, provisions, and settlement of various litigation proceedings, and a GBP 5 million write-down of an investment in associates. About two-thirds of these costs were non-cash, including GBP 22 million from the amortization of intangible assets. Turning now to cash flow. Operating cash flow improved by GBP 168 million to GBP 141 million. This was mainly driven by a lower change in match principal balances from failed trades. There was also a working capital inflow of GBP 47 million, compared to an outflow of GBP 19 million in the prior year, as we made significant improvement in collecting trade receivables.
Operating cash flow also includes additional tax paid of GBP 16 million, relating to winding up our defined benefit pension scheme in the UK. The GBP 46 million surplus received as part of the wind-up is included in investing activities. There was a GBP 44 million outflow for financing activities, and this includes the final dividend for 2022 of GBP 62 million, as well as a GBP 39 million net cash inflow from the residual proceeds of refinancing GBP 250 million of debt maturing next January. The strengthening of sterling, particularly against the U.S. dollar, resulted in a foreign exchange loss of GBP 46 million, compared to a gain of GBP 44 million last year. Taken together, these movements resulted in the group's cash balance increasing by 10% from GBP 888 million at the start of the year to GBP 979 million at the end of June.
Turning now to guidance for 2023. We maintain the guidance we gave in March, with one exception. Group net finance expenses are now expected to be around GBP 43 million, down from GBP 49 million. This is the result of higher interest income as we manage our cash more efficiently. We continue to expect an effective tax rate of 28% and pre-tax significant items of GBP 85 million, with a dividend policy that targets two times cover on adjusted earnings. Finally, our capital markets day targets for 2023 remain unchanged. Thank you very much. I'll now hand over to Dan to talk about Global Broking.
Thank you, Robin, and good morning, everyone. I'm going to start with an overview of Global Broking before covering the market environment and then updating you on the rollout of our electronic platform, Fusion. Global Broking is the world's largest interdealer broker and over-the-counter liquidity venue. We cover all major asset classes and instruments, have an industry-leading market share and a global footprint. Our brands are generally number one or two in the market where we are present, and our rates franchise is the industry benchmark. From this position of strength, we continue to make good progress delivering our strategic priorities. Our focus on contribution and broker productivity is paying off. As Robin mentioned, adjusted EBIT margin, revenue per broker, and contribution per broker all increased in the first half. Together with supportive market conditions, this makes us well positioned to deliver our contribution and EBIT margin targets this year....
Fusion is critical to the delivery of these priorities. As you've heard from Nico, our rollout is on track. Our focus now is on driving client adoption. Let me now turn to the market context, starting with rates. A changing interest rate environment is supportive of all asset classes in our business. As interest rates rise or fall, clients risk-adjust their portfolios. Given our strength across all the major asset classes, we are well-placed to capture any volatility. During the first half, rising interest rates created volatility and volume in our short-term rates businesses, notably in the first quarter, as the chart on the bottom left shows. Turning to foreign exchange, concerns about global recession diminished during the first half. Weakness of the U.S. dollar supported volumes in emerging market and G10 currencies. Aggressive interest rate hikes from the Fed now seem to be abating.
We see a potential return of risk appetite towards the fourth quarter. Volumes may increase given geopolitical and economic uncertainty. Turning now to Equities and Credit. In equities, heightened volatility was driven by a range of factors, including inflation, the war in Ukraine, and the sell-off in technology stocks. We expect ongoing uncertainty in the second half to continue driving volatility and volumes. If inflation continues to moderate, we expect to see ongoing inflows into equities. The credit market was impacted by the failure of some regional banks in the U.S. and Credit Suisse in Europe. Increased volatility in the run-up to the collapse of Silicon Valley Bank and takeover of Credit Suisse drove activity in both credit default swaps and bonds. Concerns about inflation continued to drive sentiment. This fluctuated from being negative towards the end of March to being more positive thereafter as the market regained confidence.
As usual, this positive sentiment saw trading and credit default swaps go down. Historically, the second half tends to be slower than the first. However, macroeconomic uncertainty should continue to result in volatility. We also anticipate additional new issuance. I'd like to turn now to the rollout of our electronic platform, Fusion. Given that equities is already Fusion-enabled, the scope of our rollout covers rates, foreign exchange, and credit. 44% of in-scope desks are now Fusion-enabled, and we are on track to complete our rollout by the end of 2025. We are prioritizing rates and FX, where market dynamics are supportive and there is client demand. Work is also underway, albeit at an earlier stage, in our credit business. We have completed key launches for both the Tullett Prebon and ICAP brands in global interest rate and foreign exchange options.
Later this year, our Sterling hub will go live, covering inflation, gilts, and interest rate swaps. In foreign exchange, we will go live with FX forwards. Client adoption of Fusion is growing substantially. Using rates as an example, this chart shows the number of unique client logins has increased by 43% in the last 12 months. Fusion equips our brokers to better serve our clients across the full life cycle of a transaction. It gives clients access to our aggregated global liquidity across asset classes and brands. This means clients execute more business with us, helping to underpin and grow our industry-leading market share. Fusion also provides the real-time data, automated trade processing, and settlement solutions that clients require to transact with confidence. This helps clients accelerate trade confirmation and reduce operational risk. Fusion also offers us the necessary optionality to drive future growth. Fusion is our asset.
We own it. The platform is fully cloud-enabled and engineered to easily integrate new functionality. This means that we can develop the platform according to the changing needs of our clients and developments in market infrastructure. For example, clients increasingly need bespoke APIs and chat-based connectivity. That is why we purchased a minority stake in a U.K. fintech firm called ipushpull in April. ipushpull functionality is now embedded in Fusion, helping to streamline the delivery of live data sourced from multiple channels to our clients. Fusion not only differentiates us in the market today, but also provides the flexibility and scalability needed to remain the world leader tomorrow in over-the-counter liquidity and data. Thank you very much. I will now hand over to Andrew to talk about Energy & Commodities.
Thank you, Dan. Good morning, everyone. I'll start with a brief snapshot of the business. We are the leading broker in Energy & Commodities, operating across three brands, Tullett Prebon, ICAP, and PVM. We are a well-diversified client base comprising of trading companies, commodity producers, banks, and a growing number of clients from the buy side. Oil represents over half of our revenue. We have a global footprint in both power and gas. Environmental products are a small but increasing portion of our revenue mix. Our priorities for this year include delivering our 2023 capital market day targets in line with our guidance, expanding our environmental franchise, and growing our Digital Assets platform. Let's turn to the market conditions. We've started to see the Energy & Commodities markets normalize for the first time since 2019.
Last year, markets were impacted by war in Ukraine, which disrupted our supply lines. This drove prices to historic highs, which in turn caused credit and margin issues, leading to lower market volumes. This chart shows the price movement in Dutch TTF, which is the main benchmark for European gas. A sharp increase in price last year led to a decrease in volumes. This year, European gas and power prices have returned to more normal levels, and this has resulted in higher volumes. The second half of the year looks to set follow the trend of the first, with the strong gas storage levels across Europe, though the outlook will depend on the weather. A cold winter could potentially result in higher demand and another price spike. Oil volumes have also improved during the first half, with increased demand predominantly coming from China.
The performance of oil will continue to be driven by China, and any slowing of the Chinese economy could impact the market. However, the longer-term outlook for oil is positive. The International Energy Agency predicts growth in global oil demand of 6% between now and 2028. We see the energy transition as a major opportunity for our business, and we are well positioned as the leading broker. We have strengthened our global coverage in the environmental space over the past 18 months. We are now active across all three brands in mandatory and voluntary carbon credit markets, as well as renewable energy. The voluntary credit market is expected to grow at least 5x by 2030, according to recent research from Shell. We have successfully rolled out our Fusion platform in Norway for the green certificate market and in Europe for the voluntary carbon market.
Feedback from clients in both instances has been very positive. In addition, we're expanding our renewable energy presence to new markets with a focus on Australia and South America. Looking to the future, we have identified battery metals, such as cobalt and lithium, as growth markets. These will be a key focus for us as transportation continues to electrify. Along with this, we see good opportunity to expand our presence in biofuels, and we are looking into building a green hydrogen business. We believe these new markets will bring opportunities in both data and indices. As you heard last March, Parameta Solutions has partnered with General Index, a benchmark provider in the energy and commodities markets. We have been working with them on indices for liquefied natural gas, which we have launched today, and we expect to follow this with indices in other products.
Let's turn to Digital Assets. This year, there's been growing demand from traditional market players in Bitcoin and Ether. We are very pleased that we have completed our first trade via our venue in Bitcoin U.S. Dollar after matching via API. In future, this will give us the ability to service our clients with settlement precision tailored to their needs. We have received very good feedback from the market. We will soft launch our venue in the next few months with a number of market makers, such as Flow Traders, committed to streaming prices. As a reminder, our business is registered with the FCA, and we cater for only institutional clients. We run a segregated model, we do not hold client funds or take positions, and we have an independent custodian in Fidelity Digital Assets.
These three factors, together with having a number of market makers streaming to us, makes TP ICAP a trusted venue operator in the market. We are also working closely with Global Broking and Liquidnet on the tokenization of other asset classes. Thank you very much. I'll hand you over now to Mark for an update on Liquidnet.
Thank you, Andrew, and good morning, everyone. I'll start with an overview of our strategy, then share insights on market dynamics and outline our strategic progress in both equities and credit. Liquidnet is a global multi-asset business that spans 49 markets. We have more than 20 years of experience developing trusted electronic trading solutions for our network of over 1,000 institutional investors. This commitment to trust and technology differentiates us in the marketplace. It also drives our strategy, where we have three key priorities. First, to grow and diversify our equities franchise. We are doing this by expanding algorithmic program in inter-region trading. Second, we are building out our Credit business by expanding dealer connectivity, increasing platform liquidity, and developing differentiated workflows.. Third, we are focused on delivering our 2023 contribution margin target of 30%.
Our other priority is to deliver the integration, which will be complete by the year-end. We have made good progress in the first half. As Robin mentioned earlier, we have now delivered GBP 38 million of annualized cost synergies. In Credit, we have two major banks connected to dealer- to- client, with a third in the final stages of certification. Finally, our relative value business delivered a record performance, capitalizing on our leading market position. Now let's turn to Equities. Current equity market conditions continue to be challenging. Fund allocation to equities is at a 20-year low, and trading activity is subdued. During the first half, overall block volumes were down 32% in Europe and 20% in the U.S. We have leading positions in both the European and U.S. block markets, and this decline in volume has clearly impacted our revenues.
We believe this downturn is cyclical rather than structural. We have responded by reducing our cost base and diversifying our business to build resilience through all market cycles. In order to diversify, we're not just expanding algorithmic program in inter-region trading. We've also added 44 new equity clients in the first half, restructured our U.S. sales and trading team to identify incremental revenue opportunities, and launched new features to allow clients to trade more efficiently. Our work to grow Program Trading is bearing fruit, with revenue up 14% year-on-year. Despite this challenging environment, our equities proposition remains market-leading, highly valued by our clients, and recognized by the industry as best in class. Turning now to credit. Although the electronic market in Credit is developing from a low level, it has grown significantly in recent years.
It now represents over 40% of the total market in European credit, U.S. investment grade, and U.S. high yield trading. Request for quote, or RFQ, plays an important role in the electronification of Credit. This represents a significant opportunity, and we are working to capitalize on it. Liquidnet's deep connectivity to the buy side gives us a strong competitive advantage. It would take decades and cost millions to replicate the connectivity needed to enter the dealer-to-client market. This high barrier to entry puts Liquidnet in a strong position. We are taking advantage of this by leveraging our Blotter Sync technology, which we have now used for 20 years in Equities and now deploy in Credit. It gives direct access to buy side trade blotters, which record all trades throughout the day, and automatically downloads orders on a daily basis. Liquidnet is the only provider with this technology in credit.
This process is manual for other platforms in the market. This technology is enabled by our connection to 12 major order and execution management systems. As a result, each day we see around GBP 16 billion of liquidity on our platform. Our Credit ecosystem spans both primary and secondary markets, supporting the full life cycle of a bond. Clients can connect any way they want, via their order management system, our user interface, Fusion, or API. Once in our ecosystem, clients can select how they want to interact with a range of protocols. This choice enables them to trade in the way that is most efficient and effective for them. We're making good progress developing our Credit offering. In the primary market, we have more than 30 syndicate banks sending new issue announcements and more than 80 buy side firms that enter orders to trade these new issues.
In secondary markets, two major global banks connected via API to our dealer-to-client workflow during the first half, with a third major bank in the final stages. We're also partnering with Global Broking To leverage their extensive dealer connectivity, bringing more liquidity to our platform. With the evolving electronic market structure, together with our Blotter Sync technology, deep connectivity to the buy side, the development of an RFQ platform, and an increasing number of Tier 1 dealers connecting via API, positions us for success, developing a leading electronic credit platform. Thank you very much. I'll now hand it over to Eric to talk about Parameta Solutions.
Thank you, Mark, and good morning. I'm going to cover our strategy at Parameta, talk about some of our partnerships, and discuss how we are creating high-value products through both evidential pricing and our collaboration with Energy & Commodities. Parameta Solutions benefits from a unique set of proprietary over-the-counter data and a subscription-based model with a client retention rate of 98%. Our strategy is driving both growth and strong contribution margins. It focuses on expanding our product offering, broadening distribution channels, and diversifying our client base. Our product strategy is about creating new products that offer higher value to clients. As we create new products, we are delivering commercial partnerships that combine the expertise of others with our data to give us a faster time to market. Multi-channel distribution is helping us to drive new client acquisitions.
We distribute via our channel partners and increasingly direct to clients, for example, via cloud-based solutions. Our client base is well diversified. It includes banks, market data vendors, the buy side, hedge funds, governments, energy and commodity companies, and corporates. You can see our priorities for 2023 on the slide. We continue to target double-digit growth and adjusted EBIT for the full year, and we are also making good progress with our partnerships. I'd now like to update you on how these partnerships are helping us to leverage our data and drive growth. Clear Consensus is an initiative launched in partnership with PureNova, a Silicon Valley cloud-based software company. Regulators increasingly ask our clients to evidence transactions data, and in particular, trades, in their independent price verification process. We developed Clear Consensus in response to this need. ClearC onsensus combines our observable data with PureNova's technology and analytics.
For clients, this results in greater efficiency, improved measurement of fair value, enhanced risk management, as well as potential capital optimization. We're in the final stages of signing Tier One clients in Europe, Asia, and the Americas, who we expect to onboard during the second half. Second, we partner with General Index and Energy & Commodities, as you heard from Andrew, to build indices for liquefied natural gas. These indices reflect the trading activity between three major regional hubs in Europe, Asia Pacific, and the U.S. They are based on a methodology that includes pricing from TP ICAP's leading liquefied natural gas business, giving clients a global view of the LNG market for the first time. Third, we continue to work with a global analytics firm called Numerix to build independent fair valuation of over-the-counter derivatives.
We are on track to launch a new derivatives valuation product with Numerix in the first half of next year, which is an exciting addition to our risk management solutions. I'm going to turn now to evidential pricing, which is a core component of the high-value products we are developing. The pricing reference and valuation business is a $6 billion- per- year industry, where most of the pricing data is based on anonymous opinions without transaction evidence to support the contributed price. By contrast, we are able to deliver a pricing service based on data from transactions that have actually taken place. We call it Evidential Pricing because it's backed by real evidence, not biased opinion. Evidential Pricing forms the basis for our Trading Analytics product, providing best execution and transaction cost analysis. We've also launched a new service called Fundamental Review of the Trading Book.
This provides clients with observed trades as input into their internal model calculations, helping them to reduce the regulatory capital and meet the needs of new regulation. Evidential Pricing is providing the data we need for our benchmark and index solutions. Nico mentioned earlier, we have been recognized by ESMA as a benchmark administrator in the EU. We are now the first interdealer broker to administer OTC benchmarks and indices across both Europe and the U.K. Demand for indices is growing. There is scope for us to introduce more competition into the OTC market for the benefit of clients. You've already heard about our indices and liquefied natural gas. We've also launched a suite of indices in partnership with Global Broking. They provide a view of volatility of the world's major interest rate options markets.
Another key priority is to accelerate collaboration with Energy & Commodities in order to monetize new data opportunities, especially in relation to the transition to a low-carbon economy. We've expanded our environmental package to include Murban low-carbon crude oil, U.S. renewable energy certificates, Texas solar, U.K. renewable energy guarantees of origin, renewable identification numbers, California low-carbon fuel standards, and U.S. Northeast power. We've also identified the potential for further new datasets, such as voluntary carbon offsets, battery metals, and hydrogen. In addition, we are partnering with Energy & Commodities on their Fusion program to ensure that we capture real-time pricing data across all their markets. Thank you very much, and I'll now turn it back to Nico.
Thank you, Eric. To conclude, we have delivered an uplift in profitability in the first half by focusing on productivity, contribution, and tight management of our cost base. We have a clear strategic roadmap and a strong franchise to deliver value for our shareholders. Our transformation continues at pace through the deployment of Fusion. We continue to diversify our business across Energy & Commodities, Liquidnet, and Parameta Solutions. We are managing our capital dynamically so that we have the flexibility to create value by investing in our business, paying down debt, or returning surplus capital to shareholders. Thank you very much. We'll now open up for questions. Could you please tell us your name and organization before you ask your questions? Thank you.
Thank you. It's Stuart Duncan from Peel Hunt. I've got three questions, if that's okay. The first is on Liquidnet. You signed up to and about to sign up a third bank. Can I just ask, when were they when were the two signed up? How many do you actually need to start to really see the, the benefits of flow coming through in the platform? Second one is probably for Robin. It's around, you touched on the Russia and the write-off last year. If we do see some sort of stabilization or normalization of the situation there, at what point would you consider writing or could that be written back, and what would cause that write back?
Thirdly, and this is also for you, Robin, but on the net interest or the net finance cost point, given the cash balance at the end of the first half, and you've been quite clear about signaling what debt will be outstanding going into next year, I'm just wondering why the guidance hasn't improved more, and actually, what it would mean for net finance costs next year as well. Thank you.
Thank you. Could you hear me? Yeah. So on Liquidnet, I'll let maybe Mark to complete, but yes, we are working as we said before, very actively to build the segment of the request for quote in the dealer to clients on our platform on Credit. For that, it's we have a large network of buy-side clients connected electronically. So that's extremely precious, but it's very important to get a large liquidity providers to stream prices in response to these clients' demands. We've worked really actively with very large U.S. investment banks to get them connected.
They have to do the work on our API to stream prices, and we, we're very happy to report that we have finalized the work with two very large investment banks, and the third one is imminent because we are working on the final certification process. We are engaged with other banks, of course, but it's very critical to get the liquidity flowing in, in the platform, because liquidity begets liquidity in that, in that area. Good progress, meaning that we will, we will start to see revenue increasing in the last part of this year and next year on the Liquidnet Credit platform. Mark, anything to add?
Stuart, on the Russia question that you raised. Sorry, you can't hear me. We've got provisions of around about GBP 20 million that we on the books. The reality is we have those provisions because we can't trade those assets. That we will seek to trade those as and when the regulation allows us to do so. As a rule, we set a floor of at least $0.70 in the dollar in which we would want to realize those assets. We will, we have to just monitor that situation. On the net financing costs, yeah, we have an improving picture.
We've made huge strides in delivering a greater yield on our cash balances that we can actually generate a yield from. Not all of the cash that we have on the balance sheet is eligible for deposit because it's restricted with clients. The financing costs that we have in H1 are reduced by that interest income. That will increase as we get towards the end of the year, as we seek to generate further yields on more of those balances. We still have a lot of debt to pay off that doesn't come off until 2024.
The guidance for 2023 is, is, as I said earlier, the net financing-- the net finance expense also includes IFRS 16 liabilities. We will give more guidance as, as we action the greater yields on our, on our balances, and, and we get a, a, a picture of our final debt position for 2024 when we come to talk about the 2023 full year results.
Thank you.
Yeah, thanks. It's, it's Piers Brown from, HSBC. Maybe one for, for Robin and, one probably for Dan, actually. Robin, just in terms of the, the share buyback, GBP 30 million, which, looks like a very positive, sort of statement of intent. Should we view that as a one-off, or is, is that something which you think you may be able to sustain? And I guess within that context, if I look at the cash balance, you're at about just under GBP 1 billion of cash. I think the free cash flow generation in the first half is about GBP 140 million. It looks like you're relatively, in a relatively good position on cash.
Just in terms of your, your, your thinking going forward as to how you would utilize that through potential further distributions. The question for Dan really is just in terms of the trading environment in the second quarter. I mean, it sort of feels like it started slowly in rates and FX and then sort of picked up towards the end of the quarter, and I think the outlook statement for July was quite positive, double-digit growth. If you could just shed any light on how the Global Broking revenue picture has evolved through the quarter, that would be helpful. Thanks.
Thanks, Piers. Just picking up on, on, on the, on, on the buyback. I mean, obviously, that, that's, that's something which we've, we've announced, GBP 30 million for now. That's a function of us over-delivering on the, on, on the cash free up target of GBP 100 million that we, that we talked about, and, and obviously, the, the, the good performance of, of the business. We will, we will continue to monitor and, and target freeing up more cash from now. As, and as an organization, we will then seek to, to see how best to deploy that going forward, whether that's organically investing in the business, paying down debt, or returning more capital to shareholders.
That's something which we will, we'll continue to do. The cash balance on the balance sheet today is a healthy position. A lot of that is, as you know, and we have a slide in the back of the appendices, in the pack, that gives you a little sense of the components of that. Around about GBP 250 million of the cash balance is earmarked for things that we talked about, sort of paying off deferred consideration, paying off VLNs, and for reducing that debt over time. It is inflated for that right now.
Again, we, we, we will, we will continue to monitor that as we go and look for, look for more value.
In terms of the trading environment, I think the 1st half of the year was, was marked by a couple of very specific events, which were the, I'd say, the ongoing continued increase in, in short-term interest rates and the big ongoing question about inflation versus central bank and control. Secondly, it was marked by the, you know, the regional banks in the U.S. and the inevitable discovery of unexpected and/or unanticipated events as interest rates have increased, and we work into a new paradigm. What I'd say in Q2 and Q3 is that, that uncertainty continues to go on, that is supportive for our market environment.
You know, every day, the, the newspapers are filled with global macro questions, and whether we are at the end of this short-term interest rate cycle, whether that will whether the consequence of that will be recession or others, those are all reasons to adjust one's risk portfolio across all asset classes, and that's, that's supportive in the post-zero interest rate environment.
Hi, thanks. Will Regis, Peel Hunt. Probably a question for Mark. Credit business looks quite interesting at the moment, given those announcements you've made about the selling of the investment banks. What do you think is the revenue potential, the upside potential for that business? Could it actually eclipse the equities business over time?
Great. Thanks for the question. W e're obviously excited about the credit opportunity. Each incremental bank adds a, you know, incremental flow, which increases our revenue profile. You know, we have, you know, as I mentioned earlier, we've got resting liquidity from our buy-side connectivity that is real, so getting banks to interact with that liquidity is a major focus for us. You know, I think, we set out our CM D targets. You know, I think, depending on the evolution of the credit market, you know, we think it will be as interesting as equities in the medium to long term.
Thank you.
No further question. Do we have questions on the line?
We actually have no questions online. I'm not sure if there are any on the, on the phone. I'll just check that quickly.
Yes, we have our first question coming from Vivek Raja from Shore Capital. Vivek, your line is now open.
Morning, chaps. Thank you for the presentation. Thanks for answering my questions or having a go at my questions at least. I have three, if I can please. The first one is about the competitive landscape. Just wondered if you could comment on market share, particularly within the Global Broking business, and So referencing some of your competitors, results more so look better than yours, and I can see that you know, broker headcounts have reduced in the first half. I just wondered if you could comment about broker churn as well. So that's the first question. Second question, have a go at this one. Robin, could you give a sense of potentially how much more capital there could be to release from the business and some sort of timeline on that? Then the last question is on Parameta.
Revenues slowed in the first half. I just wondered what gives you the confidence in achieving double-digit adjusted EBIT growth for the current year? Okay, thanks.
Thank you. Thank you for your questions. Yes, let's talk about market share and Global Broking. Maybe Dan will, will, will take this one.
Sure. look, in terms of market share and Global Broking, what I can say is we had a very strong beginning of the year last year, so our comparative is high and higher than our competitors, is, is, is the one statement. Two, we focused on quality revenues, and I think that's come out in the results today, and we see our results as being strong in the first half, and they'll continue to be strong in the second half.
Yeah, I would just add to that, that yes, we focused a lot on on our contribution in the business, both in Global Broking and in Energy & Commodities. As we continue to deploy technology, we expect to deliver the revenue with less brokers. You've seen that that balance. It doesn't mean that we will particularly target a reduction in our workforce, but it means that we are after quality revenue. We are demanding in terms of the return that we have on capital employed more and more in these businesses, and we're not chasing revenue without any impact, positive impact on the bottom line. That's I think.
I'll let you compare that with, with our competitors, but see the difference. On the second question, Robin?
On the second question, Vivek, from a capital standpoint, yeah, we're ahead of target on our, on our GBP 100 million that we were gonna deliver this year. As you'd anticipate, we will launch or we will certainly start looking in the second half for what else can we do. Right now it's too early to say and give you a target for how much more capital we can release, but rest assured, we are very focused on looking at that, and to the extent that we have information or more details to give you, we will give you those as and when we have them. On the Parameta revenue, Eric.
Yes.
Eric, why don't you do that?
Yeah, Vivek, thank you for your question. It's Eric. You would have seen in the H1 results that our recurring revenue is up to 96% now, that reflects a timing issue. Last year in H1, we had significant one-time revenue that didn't repeat itself in H1. It's a timing issue that we'll be seeing in H2. That's where we're very bullish that we're gonna have a much stronger H2. That's the number one issue. The other issue is, we're working very well with Energy & Commodities on a number of new initiatives. You would have heard a long list. That was a subset of, of the list of new products we've launched in H1 with Energy & Commodities. We've launched indices with both the Energy & Commodities group and with, Dan's group in Global Broking that we're very excited about.
Then some of the more higher value initiatives that we've talked about, like ClearC onsensus, we'll be signing up clients in H2, which will help drive a much stronger H2 over H1.
No?
Super, thanks. Just a couple of follow-ups. Eric, I'm not sure I understand the one-off revenues in the prior year comparison. Could you just explain that? Finally, just back to my first question, I just wondered if you could please talk a little bit more about the competitive landscape in terms of brokerage churn, whether you're still seeing a lot of competition for your brokers and where that might be coming from. Thanks.
I'll go first, if I may. Vivek, last year in H1, I believe our recurring revenue was 93% as opposed to 96%, and that was because we had far larger one-time revenues, and our revenues come from two sources. If we sign up a new client, like a hedge fund, they may buy a whole whack of one-time historical data for back-testing purposes, and then buy recurring license on a go-forward basis. The more, the bigger issue for us last year was audit recoveries. We have an audit program, and if people have underreported and have been under-licensed, and we correct that, we get a one-time audit recovery, which we had significant audit recoveries last year that we didn't have in H1 this year. It's a timing issue.
If you look historically, you'll notice that usually most of that happens in H2, but last year we had significant activity in H1.
You want to follow up on that?
Sure. Vivek, thanks for the, thanks for the question. The, the competitive environment for brokers, is an aggressive one. It always has been, and it will, likely will be. We are focused on making sure that we provide the strongest platform for our brokers, and that's the best tool for retention, investing in technology and our strong franchises. We keep, I think that we can confidently say that we keep, a strong, bench where we have the strongest franchises and where we are investing, and that continues to be the case going forward.
Thank you very much.
Yes, so I have a couple of.
Thank you.
Questions coming through on the, on the platform, unless there's another one on, on the phone?
Yes, we have another question from Kim Bergoel, from Numis. Kim, your line is now open.
Morning. Thanks for taking my question. A couple of questions from me, if I may, and I think, think they're all sort of related and, and have partly been answered anyway. The first is on, on, on market shares, and I appreciate you, you operate in a number of different markets and, and different clients, so it's not just to the one. Could you comment sort of on, on market share movement and, and, you know, where might you be gaining, where might you be, be losing share, or if there is any movement? That's the first question. Secondly, I guess that goes more specifically to the rates question, it comes back to the question we had before about sort of timing when looking at your, your peers. Is there anything more to say there? Is, is it just a timing issue?
It just looks like, it's not quite sync with your peers. Then finally, on, on pricing. I take it with Fusion is, is driving, broker efficiency, but what is it doing to pricing, Fusion? Are you pricing differently when, when people use Fusion rather than on the phone? Thanks.
I would say on the market share movements, I think you need to look at this over a longer period. I think we were definitely the strong winners in terms of market share in 2022, particularly in H1 last year, because our Global Broking went up 8%, our rates performance was stellar, and as you compare, some of our competitors went negative actually in H1 last year. There is clearly an impact of comparator with our competitors. The second element is as we said, we continue to deploy technology, we focus on productivity, we look carefully at the capital- the return on capital employed in our divisions.
We have set some targets, and our divisions are working to deliver those targets. We've reduced, on average, our brokers' head count in 20, in H1 in 2023, voluntarily, and it doesn't mean that this is something that we'll do continuously. As I said, we continue to invest in the business and look for talents, but we are careful in terms of chasing revenue rather than chasing contribution and profitability. That's the first, the first element. Rates, in particular, last year, was, I mean, Dan, was up.
Well, I mean, I think we had an exceptional beginning of the year. Remember, the franchise on rates is number one in the world. We're the strongest, at a time of the turbulence that we saw in the rates environment, the beginning of 2022, there's a natural bias to trade with the strongest franchise. I think that was visible in numbers last year. That's the high comparative that we have when we look at the numbers in H1 2023.
Y ou asked the question about the pricing impact. So far, we, we, we have not seen or suffered any negative impact in our pricing in rolling out electronic solutions. We have initiated actually a pricing initiative, work initiative, in Global Broking this year, with a positive impact in repricing clients. We have already done some of that in Energy & Commodities. I would say as, as we deploy pre-trade connectivity solutions, and in particular, STP, that allows the client to trade in a more comfortable manner to get the confirmation of their trades quicker, it's the opposite.
It's actually a very, very strong argument for clients' loyalty and a way for us to defend and defend our pricing. No negative impact so far, but we are actually positive in terms of the pricing impact of deploying Fusion. Yeah.
Great. Thank you very much.
Yes.
Dominic?
We have a couple of questions coming through online. The first two are from James Lowen. The first question is on Parameta Solutions. Can you provide an update on what we've done regarding the internal agreements that we noted in our statement? Also in relation to consolidating entities. The second question from James is, what is the tipping point on Liquidnet Credit? Is it the three banks that we've nearly signed up, or do we need sort of five or six of the big ones? Are the ones that aren't yet on the platform keen to join as they can see this will grow fast with the three already on?
Thank you. Thank you, Dom. On Parameta, Eric, would you like to take that or?
Yeah, sure. We have a formal arrangement with our partners in Global Broking and with Energy & Commodities, that includes standard things that we would have with any content partner, in terms of SLAs and all those issues that, you would normally expect in the market industry.
Another element of the question was the consolidation of entities. I, I, I think, yes, it's, it's an important work that we're doing for Parameta. In general, in the group, that's a source of capital efficiency. You've seen the benefit of our Cosmos project, where we've reduced by roughly 50% the number of legal entities we have in the Group. Recently, we consolidated our broker dealers in the U.S., allowing us to save capital. It's the same for Parameta, where we reorganize, in a more efficient manner our legal structure. It's important for the future of Parameta to build optionality, and in particular, to be able to set up some partnerships with data providers or technology providers if we want to launch new products.
That's why we are, we are accelerating this, this work. The second question, I think, is on Liquidnet. The tipping points, is three banks enough? Mark, how many do you need?
Yeah. Thanks, James. So I don't know if there's a clear tipping point. Obviously, flow gets flow. I think in terms of, in terms of the profile for the future, right? There's, there's two angles that we approach it. We have very strong relationships across Global Broking with this dealer community. That's very helpful in drawing additional connectivity. Banks are keen to keen to get connected. That's the first aspect, and the second aspect is leveraging our client network. Dealers understand the, the strength and the history of the Liquidnet brand, and what it brings from the institutional community standpoint. I think the, the combination of those two factors have driven interest and will continue to drive interest from additional banks in terms of getting connectivity to, to the platform.
Yes, we, we have another question online from Stephen Hayde, from Close Brothers. With the debt repayments you're targeting... sorry, with the debt repayments, are we targeting a credit rating upgrade, and do we have a target for gross debt to EBITDA?
Thanks, Don. We, we, we obviously have a, we, we have a BBB- with stable outlook rating from Fitch, an investment-grade rating, and that investment-grade rating is, is very important to the group. We have a, we have a headroom of 2.5x gross debt to EBITDA, which is a sort of a hurdle, which is an important one for Fitch. For us, it's, it's important to, to, to maintain that investment-grade rating. I think we have on , with the debt paydown that we've talked about, we will continue to have ongoing dialogue with, with, with Fitch, to see how and if we can then improve that.
At this point, we're not, we're not in a position to, to talk about what those levels are, I'm afraid.
Thanks, Robin. Just there's a couple of questions from Chris Mills, from Harwood Capital. Given the preponderance of dollar profits, why did it make sense to refinance the 2024 Sterling debt with more Sterling rather than dollars? That's the first question. The second question is, what is the total amount of deferred acquisition costs? I would imagine that's referring to the remaining consideration that is owed in terms of the Liquidnet acquisition.
The deferred consideration cost is about $65 million, which is payable in at the end of March 2024, based upon the current projections of Liquidnet's revenue. As you, as you, as you may recall from the acquisition, the deferred consideration is contingent upon them achieving certain hurdle rates of aggregated equities revenue over that three-year period. In terms of the, the financing of the refinancing of our debt, I think all things considered and the pricing and the market conditions, it was considered to be a greater certainty and a success rate of refinancing that existing sterling bond in sterling. When we started looking at this at the beginning of the year.
We still have a lot of s terling obligations, of the company, and we have a lot of FX volatility in the group. It made sense, all things considered, to keep that financing in sterling, in our rolling sort of benchmark program of refinancing that we have in the Group.
Okay, I have no further questions online. I don't believe there are any in the room. There aren't any more on the phone either. That concludes our presentation this morning. Thank you all for your time and attention. We look forward to talking to you all again at our full year 2023 results in March next year. Thank you.
Thank you.