LMAX 2012 results: volume and trades going up, P&L improving

LMAX was set-up a year and a half ago by Betfair and became the first forex/CFDs MTF. LMAX utilizes the

LMAX was set-up a year and a half ago by Betfair and became the first forex/CFDs MTF. LMAX utilizes the advanced Betfair order matching technology and strives to become the main FX exchange. Last year’s results were pretty bad with LMAX losing £13.2 millions subsequently leading Goldman Sachs to sell its 12.5% stake back to Betfair.

LMAX has made quite a few executive changes since and also added an MT4 bridge and launched MultiCharts. It seems latest changes paid off as LMAX reports a steep increase in trading volumes, number of daily trades and a substantial improvement in its financial results.

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“Following a change of management in April 2011, LMAX has successfully transitioned towards a sales-led distribution strategy with an increased focus on liquid foreign exchange and commodity products. The business has built an experienced sales team and is establishing a wide international reach. The new strategy has delivered much improved results in FY12 and LMAX has outperformed the business plan developed by the new team.

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Customer traction has improved throughout the year, leading to strong volume growth in FY12. In the year LMAX matched $85bn of foreign exchange volume (FY11: $9bn), delivering an annualised run-rate of c.$300bn in April 2012. The number of trades on the platform has increased from 4,000 a month to 300,000 a month over the period. LMAX now ranks in the top 30 retail FX providers globally and has firmly established proof of concept for its exchange technology in this market. The business is now focused on taking its key messages of speed, price and reliability to a wider audience of customers to build further volume flows and liquidity on the platform.”

The part concerning “c.$300bn” is not very clear (we’ve requested clarifications) and it is also not clear why Betfair believes that LMAX is now among the top 30 FX providers globally (it’s not).

Financially LMAX showed £4.0 million revenue (April 2011-April 2012) ending the year with a negative EBITDA of £5.8 million.

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