US Edition The group posted pre-tax profits up 20pc – or £23.2m – to £137m for the year to December. The results allayed fears in the City that consolidation among banks – key clients of inter-dealer brokers – was weighing heavily on the sector.
Mr Smith, chief executive, said volatility in interest and exchange rates looked "likely to persist for some time" and the company was well positioned to benefit from substantial growth in the issuance of government bonds.
Inter-dealer brokers are middle men in the wholesale financial markets who match buyers and sellers of "over-the-counter" investment products such as bonds and foreign exchange, credit market and interest rate derivatives. The sector has suffered in recent months amid mounting concerns about client consolidation and the likelihood of trading moving on to exchanges.
As the financial crisis bit last autumn, Tullett saw its market capitalisation reduced by more than two thirds to less than £300m as investors took fright. However, they were heartened by yesterday's news that revenue was up 25pc to £944m, aided by higher trading volumes as investors responded to volatile conditions.
Tullett Prebon's shares surged more than 20pc, up 30 to 166.25p, and the sentiment spilled over to rival Icap, up 25.5 to 239.75p.
Mr Smith said: "This is a very simple story: for all inter-dealer brokers, volatility is our friend. The thing that's crushing so many other people is, in fact, one of the things that drives our business."
While it remained difficult to forecast market activity, he added: "I think that volatility in our core products will continue as far ahead as I can see."
Management has nonetheless moved to ensure the business is "well positioned to respond to potentially unfavourable conditions", taking a one-off £19.5m expense to cut its annual cost base by a similar sum.
While broker numbers remained steady, support staff numbers fell from 936 to 889 over the year and a similar reduction was likely this year, Mr Smith said.
Evolution analyst Hugo Mills said Tullett Prebon's figures were strong and the group had made "a solid start to 2009 despite the tough environment".
Tullett Prebon announced an unchanged final dividend of 8p, payable on May 21, for a total 12.75p distribution, up from 12p.