StoneX Q1 FX Revenue Jumps 1,200% after GAIN Acquisition

The company is trying to mitigating its exposure to GBP.

StoneX Group (NASDAQ:SNEX), previously known as INTL FCStone, has published its financial results for the first quarter of the fiscal year 2021, ending on December 31. This is the first full quarterly results of the company after its acquisition of GAIN Capital.

The results are remarkable with a 37 percent year-on-year gain in the operating revenue, which, in absolute numbers, touched $380.1 million. Additionally, the net quarterly income went up to $19.5 million, 20 percent higher.

FX and CFDs Business from GAIN

The FX and CFDs business of the company boomed, especially with GAIN Capital as a subsidiary. The operating revenue from FX and CFDs jumped to $59.8 million from the previous year’s corresponding three month’s revenue of $4.6 million.

The trading activities with FX and CFDs instruments showed a significant jump in the three months. The average daily volume with FX and CFDs contracts came in at $10.69 billion.

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StoneX completed the GAIN acquisition for $36 million last August with the plans for the merger of GAIN’s UK operations. However, the parent company is now planning to mitigate its exposure to the British pound in the Gain subsidiaries.

To achieve this, StoneX increased the US dollar balances in the Gain subsidiaries and utilized derivative transactions to mitigate the remaining British pound exposure. At the end of the quarter, the company recognized a $3.7 million unrealized loss on these derivative positions.

Commenting on the numbers, StoneX CEO, Sean M. O’Connor said: “Q1 was a solid start to the new fiscal year with all our segments showing growth in both operating revenues and segment income, despite generally lower trending volatility and significantly lower interest rates. We saw strong growth in customer volumes, new account activity and customer float.”

“We have made good progress on integrating Gain, including realizing cost synergies and are actively developing revenue synergy opportunities.”

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