London-headquartered multilateral trading facility LMAX Exchange has just published its 2016 results via a regulatory filing with UK Companies House. The firm is reporting a positive outcome with its significant investments in 2015 paying off handsomely. The company has record profitability with its annual EBITDA for 2016 totaling £5.6 million.
LMAX reports that the company’s revenues amounted to £27.7 million ($35.8 million) which is higher by 20 percent when compared to the previous year. Gross profit is reported at £20.8 million ($26.9 million) which is higher by a third when compared to the full year 2015. Gross margins increased to 75 percent from 2015’s 69 percent.
Commenting on the news, the CEO of LMAX Exchange, David Mercer said: “2016 was a good year for LMAX Exchange. We were able to build on our technology investments in 2015, continue our strong growth and expand our capabilities to new markets. In addition, we were able to deliver for the institutional marketplace and drive volumes in Asia.”
“This was all achieved against the backdrop of market uncertainty and volatility that we were well positioned to benefit from. Finally, we continued to champion transparency and fairness in the global FX industry as a fundamental belief of the business. Looking forward through 2017, we are seeing sustained volume growth and significant institutional uptake in all markets,” Mr Mercer elaborated.
Continued Growth in 2017
The firm is expecting continued growth in revenues in 2017 with the integration of bilateral clearing into the trading facility empowering it to continue growing its market share. The modification allowed the company to acquire additional institutional clients. A key development for LMAX Exchange was the deployment of the North American matching engine in September enabling clients from the region to trade with no ‘last look’ limit order liquidity.
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Five year compounded growth results for the years since 2012 shows 61 percent annual growth in gross profits, 44 percent growth in notional trading volumes and 30 percent annual growth in client funds.
The company’s bottom line also significantly improved with a net profit of £2.2 million ($2.9 million) for the full year in 2016. A record in annual volumes is marked with a total of $2.1 trillion for the full year, which amounts to about $175 billion per month throughout the year. LMAX reports that it has over 5,000 active clients.
LMAX reports a 52 percent increase in institutional trading volumes throughout last year and a 55 percent increase in trading volumes from the key AsiaPac region. According to the firm’s annual report, its client mix shifted more towards exchange clients and away from brokerage clients. But in the fourth quarter of the year, exchange clients represented 60 percent of total volumes.
The second half of the year was the more active period for LMAX with Brexit and the US presidential election contributing to volatility and consequently trading activity. The firm recorded its best month in November in the aftermath of the US election, when it marked an average of $10.5 billion daily in trading volumes.
Client funds held at the company increased somewhat to $150 million ($144 million as of the end of 2015).