LMAX Exchange Group (“LMAX Exchange” or “the Company”), a leading independent operator of institutional exchanges for electronic FX trading and crypto currencies, reports excellent growth and record financial performance for the year ended 31st December 2018.
2018 financial highlights:
Gross Revenues of US$50m, up 27% from 2017
Gross Profit of US$45m, up 35% from 2017
Statutory EBITDA of US$18.6m, up 62% from 2017
Operating Profit of US$13.4m, up 135% from 2017
Total trading volume across exchanges in excess US$3 trillion, up 21%
Continued growth of international exchanges
Trading volumes on New York (NY4) up 267% from 2017
Trading volumes on Tokyo (TY3) up 60 % from 2017
Since 2014, the Group’s first full year of profitability, LMAX Exchange has demonstrated:
15% four-year annually compounded growth in Gross Profit
91% four-year annually compounded growth in Statutory EBITDA
126% four-year annually compounded growth in Operating Profit
Record high trading volumes, more than US$3 trillion annually across all LMAX Exchange execution venues, were driven by increased trading from existing clients, growing market traction in the institutional client segment and a stand out performance from Asia Pacific. Statutory EBITDA grew by 62%, delivering a healthy EBITDA margin of 42%. This makes LMAX Exchange one of the most profitable operators of global venues for electronic institutional FX trading.
David Mercer, CEO of LMAX Exchange, said: “Last year saw our industry swept by consolidation and changes in market structure. Against this background, we emerged as the sole remaining independent exchange for global FX trading. Clients clearly value our independent status and distinctive business model focused on providing consistent, best-in-class service.”
“Volumes were up 21% and operating profit grew by 135%, reflecting a growing need we have identified among institutional market participants for order-driven firm liquidity and an increasing focus on transparency, precision and consistency in execution.”
“We are particularly pleased about the outstanding contribution from our Asia Pacific business, where we grew revenues by 47%. With clients in 100 different countries and 11 offices worldwide, we remain in expansion mode and have built out our multi-hub offering positions to maximise growth potential.”
“We expect this trend to continue and will build on this momentum by investing in our business to expand and deepen our client relationships across the globe, whilst continuing to deliver an optimal experience for the 300-plus funds, banks, asset managers and brokers that make up our global client base.”
“We will also further invest in our market-leading proprietary technology, which is the key enabler of the company’s business model, building on the US$100m of investments to date to ensure the primacy of our execution venues as we expand the strength and breadth of our distribution capabilities in key growth markets.”
Key business developments in 2018:
Entry into the crypto currency market and the launch of the 6th exchange: the launch of LMAX Digital in May 2018 saw the Company become the first established FX execution venue to enter the deliverable crypto currency market and the only deliverable crypto currency exchange dedicated to institutional clients. LMAX Digital was the Company’s fastest growing exchange during 2018 and is well-positioned for the anticipated entry of institutional investors and global clearing banks into cryptocurrency industry.
Consolidation of ownership: against this background of strong growth, the Company completed a leveraged buyout, bringing 95% of LMAX Exchange Group under management ownership. This transaction confirms the Company’s independent status at a time of rapid industry consolidation among OTC FX execution venues, which has seen large exchange groups expand into the asset class.
Transition of MTF and Broker businesses into distinct FCA regulated entities: as a long-term advocate for complete transparency on trading costs and execution quality, the Company welcomed the introduction of MiFID II in 2018 and worked to successfully transition its MTF and Broker businesses into two distinct regulatory entities called LMAX Exchange and LMAX Global.
David Mercer, CEO of LMAX Exchange, continued: “As we progress into 2019, we will be placing increased focus on growing business with our global institutional client segment. Following a number of senior high calibre hires in our distribution teams, notably in EMEA and Asia Pacific, we are perfectly positioned to service these clients by convincing them about the quality of our robust, low-latency, transparent execution.
“We also expect LMAX Digital to grow exponentially in coming years in line with the institutionalisation of the crypto market.”