Marex Group plc (‘Marex’ or the 'Group’; Nasdaq: MRX), a
diversified global financial services platform, announces strong
results for the third quarter (Q3) and nine months (9M) ended 30
September 2024, and upgraded outlook for the full year.
Financial Highlights
|
Financial Highlights: ($m) |
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
Change1 |
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
Change1 |
|
Reported |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
391.2 |
|
296.6 |
|
32% |
|
1,179.1 |
|
919.0 |
|
28% |
|
Profit Before Tax |
79.0 |
|
47.6 |
|
66% |
|
218.0 |
|
157.1 |
|
39% |
|
Profit Before Tax Margin (%) |
20% |
|
16% |
|
400 bps |
|
18% |
|
17% |
|
100 bps |
|
Profit After Tax |
58.4 |
|
32.4 |
|
80% |
|
161.3 |
|
113.2 |
|
42% |
|
Profit After Tax Margin (%) |
15% |
|
11% |
|
400 bps |
|
14% |
|
12% |
|
200 bps |
|
Return on Equity (%) |
25% |
|
18% |
|
700 bps |
|
25% |
|
21% |
|
400 bps |
|
Basic Earnings per Share ($)2 |
0.78 |
|
0.44 |
|
77% |
|
2.20 |
|
1.57 |
|
40% |
|
Diluted Earnings per Share ($)2 |
0.73 |
|
0.41 |
|
78% |
|
2.05 |
|
1.47 |
|
39% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted3 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit3 |
80.5 |
|
52.9 |
|
52% |
|
239.7 |
|
177.4 |
|
35% |
|
Operating Profit Margin (%)3 |
21% |
|
18% |
|
300 bps |
|
20% |
|
19% |
|
100 bps |
|
Operating Profit after Tax Attributable to Common Equity3 |
57.5 |
|
34.6 |
|
66% |
|
173.2 |
|
124.7 |
|
39% |
|
Return on Operating Profit after Tax Attributable to Common Equity
(%)3 |
28% |
|
22% |
|
600 bps |
|
31% |
|
27% |
|
400 bps |
|
Adjusted Earnings per Share($)2,3 |
0.82 |
|
0.53 |
|
55% |
|
2.51 |
|
1.90 |
|
32% |
|
Adjusted Diluted Earnings per Share ($)2,3 |
0.76 |
|
0.49 |
|
55% |
|
2.35 |
|
1.78 |
|
32% |
- % Change is calculated on numbers presented to the nearest
tenth of a million.
- Weighted average number of shares have been restated as
applicable for the Group's reverse share split (refer to Appendix 1
for further detail).
- These are non-IFRS financial measures. See Appendix 1 “Non-IFRS
Financial Measures and Key Performance Indicators” for additional
information and for a reconciliation of each such IFRS measure to
its most directly comparable non-IFRS measure.
- Delivered strong performance
in Q3 2024: Continued positive momentum across all
business segments during the third quarter supported by a positive
market backdrop and continued growth in exchange volumes in both
commodities and financials.
- Upgraded guidance for full
year 2024: Due to the strong performance in the third
quarter, we anticipate our Adjusted Operating Profit to be
approximately $300 million to $305 million for the full year ending
31 December 2024 (previously $280 million to $290 million).
- Strategic growth
investments: We announced four investments in line with
our strategy to expand our geographic footprint and build out our
product capabilities. We are expanding our footprint in the Middle
East through the acquisition of Aarna Capital and our FX
capabilities through the acquisition of Hamilton Court Group. We
are also investing to further build out our environmental products
capabilities through the acquisition of biogas specialist, Dropet
and a carbon credit partnership with Key Carbon.
- Successful secondary equity
placement: Upsized deal resulted in existing shareholders
placing 9.7 million shares with institutional shareholders in
October 2024, increasing public float to approximately 52%.
- Prudent approach to capital
and funding: Successfully issued $600 million 5-year
senior unsecured notes, further diversifying our funding sources
and increasing our liquidity headroom, to support future growth of
our franchise and growing our client base, particularly in clearing
and prime services.
- Dividend: Dividend
of $0.14 per share to be paid in the fourth quarter of 2024.
Ian Lowitt, Group Chief Executive Officer,
commented:
“This has been another strong quarter for Marex as we continue
to deliver double digit revenue growth in all our business
segments, thanks to continued positive momentum across all our
businesses and supportive market conditions. Our strategy to bring
new clients to our platform and deepen existing client
relationships by offering additional capabilities has delivered
significant growth and increases our confidence in our ability to
deliver through various market conditions including a lower
interest rate environment.
In the last few months, we have invested to further diversify
our global platform, expanding our capabilities and geographic
footprint, in line with our strategy to add new clients and
increase the services we can provide them. We have continued to
grow our capital base and diversify our funding sources with a
successful senior debt issuance, and we were pleased to see strong
investor demand for the recent share placement launched by our
shareholders, which increased liquidity in our stock.
Thanks to the strong performance so far this year and continued
momentum across our business segments, we have increased our
guidance for the full year."
|
|
|
|
|
|
Conference Call
Information:Marex’s management will host a conference call
to discuss the Group's financial results today, 7 November 2024, at
9am Eastern Time. A live webcast of the call can be accessed from
Marex’s Investor Relations website. An archived version will be
available on the website after the call. To participate in the
Conference Call, please register at the link here
https://edge.media-server.com/mmc/p/t9jtdki9Enquiries
please contact:MarexInvestors -
Robert Coates +44 7880 486 329 /
rcoates@marex.comMedia - Nicola Ratchford, Marex /
FTI Consulting US / UK+ 44 7786 548 889 /
nratchford@marex.com / +1 919 609 9423 / +44 7776 111 222 |
marex@fticonsulting.com |
|
|
|
|
|
Financial Review
The following table presents summary financial results and other
data as of the dates and for the periods indicated:
Summary Financial Results
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
|
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
|
|
|
$m |
|
$m |
|
Change |
|
$m |
|
$m |
|
Change |
|
– Net commission income |
202.8 |
|
176.3 |
|
15% |
|
630.1 |
|
523.5 |
|
20% |
| – Net trading Income |
121.6 |
|
87.4 |
|
39% |
|
364.3 |
|
299.9 |
|
21% |
| – Net interest income |
63.5 |
|
31.4 |
|
102% |
|
164.5 |
|
91.4 |
|
80% |
| – Net
physical commodities income |
3.3 |
|
1.5 |
|
120% |
|
20.2 |
|
4.2 |
|
381% |
|
Revenue |
391.2 |
|
296.6 |
|
32% |
|
1,179.1 |
|
919.0 |
|
28% |
| Front office costs |
(214.8) |
|
(167.3) |
|
28% |
|
(649.7) |
|
(502.5) |
|
29% |
| Control and support costs |
(92.5) |
|
(71.1) |
|
30% |
|
(276.0) |
|
(218.1) |
|
27% |
| Recovery/(provision) for
credit losses |
0.6 |
|
(0.2) |
|
(400)% |
|
2.8 |
|
(4.7) |
|
(160)% |
| Depreciation and
amortisation |
(5.6) |
|
(5.5) |
|
2% |
|
(18.6) |
|
(19.7) |
|
(6)% |
| Other
Income and share of results of associates |
1.6 |
|
0.4 |
|
300% |
|
2.1 |
|
3.4 |
|
(38)% |
|
Adjusted Operating Profit1 |
80.5 |
|
52.9 |
|
52% |
|
239.7 |
|
177.4 |
|
35% |
|
Adjusted Operating Profit
Margin1 |
21% |
|
18% |
|
300 bps |
|
20% |
|
19% |
|
100 bps |
|
Adjusting items2 |
(1.5) |
|
(5.3) |
|
(72)% |
|
(21.7) |
|
(20.3) |
|
7% |
|
Reported Profit Before Tax |
79.0 |
|
47.6 |
|
66% |
|
218.0 |
|
157.1 |
|
39% |
| Tax |
(20.6) |
|
(15.2) |
|
36% |
|
(56.7) |
|
(43.9) |
|
29% |
|
Reported Profit After Tax |
58.4 |
|
32.4 |
|
80% |
|
161.3 |
|
113.2 |
|
42% |
- These are non-IFRS
financial measures. See Appendix 1 “Non-IFRS Financial Measures and
Key Performance Indicators” for additional information and for a
reconciliation of each such IFRS measure to its most directly
comparable IFRS measure.
- Refer to Appendix 1
“Non-IFRS Financial Measures and Key Performance Indicators” for
additional information.
Performance for the three months ended 30 September
2024
Reported Profit Before Tax increased by $31.4m, 66%, to $79.0m
for Q3 2024, from $47.6m in the same period of 2023 reflecting
strong revenue growth at improved operating margins.
Revenue grew by 32% to $391.2m in Q3 2024 from $296.6m in the
same period in 2023, reflecting a combination of favourable market
conditions, strong underlying growth and the benefits of our
acquisitions.
Net commission income increased by 15% to $202.8m in Q3 2024
from $176.3m in Q3 2023. The increase occurred mainly in Agency and
Execution, which increased by 21% to $141.9m in Q3 2024 from
$117.6m in Q3 2023 reflecting increased customer activity in
Energy, as well as in Securities primarily driven by our
acquisition of Cowen's prime services business in December
2023.
Net trading income rose by 39% to $121.6m in Q3 2024 from $87.4m
for Q3 2023. This was driven by our Metals business within our
Market Making segment, where market conditions normalised but
remained positive, and a comparatively subdued operating
environment in Q3 2023. Net trading income in Hedging and
Investment Solutions also increased by 12% to $45.7m in Q3 2024 as
demand grew for commodity hedging and financial product services,
and by 60% to $20.3m in Agency and Execution driven by increased
activity in Capital Markets business.
Net interest income increased by 102% to $63.5m for Q3 2024 from
$31.4m for Q3 2023. This growth reflected the benefit of higher
balances, re-investment of maturing assets at higher yields and the
acquisition of Cowen's prime services business in December
2023.
Net physical commodities income increased by 120% to $3.3m for
Q3 2024 from $1.5m for Q3 2023. This increase was primarily due to
an increase in sales volumes from physical recycled metal and
physical oil sales, driven by growth in our recycled metals
business and the addition of physical oil broking capabilities.
Front office costs increased by 28% to $214.8m in Q3 2024,
largely reflecting a 16% increase in average front office headcount
driven by recent acquisitions, as well as organic growth.
Control and Support costs increased 30% to $92.5m in Q3 2024,
primarily reflecting investment in our Finance, Risk and Compliance
functions, to ensure we continually invest in our systems and
processes to support future sustainable growth, as well as
integrating additional Control & Support employees as part of
recent acquisitions.
Adjusting items reduced by 72% to $1.5m in Q3 2024 from $5.3m in
Q3 2023. These costs are primarily related to corporate activities
and are recognised within our corporate segment. Adjusting items
reduced mainly due to the non-recurrence of costs incurred in
preparation for and associated with our successful IPO and owner
fees in the prior period.
As a result of the revenue and cost trends noted above, Adjusted
Operating Profit increased 52% to $80.5m for Q3 2024 from $52.9m in
Q3 2023 and Adjusted Operating Profit Margins improved to 21% in Q3
2024, up from 18% in Q3 2023. In addition, as a result of the
revenue, cost trends and adjusting items noted above, Profit After
Tax Margins increased to 15% in Q3 2024 from 11% in Q3 2023.
Performance for the nine months ended 30 September
2024
Reported Profit Before Tax for the nine months ended 30
September, 2024 ("9M 2024") increased 39% to $218.0m from $157.1m
in the nine months ended 30 September 2023 ("9M 2023") reflecting
continued strong year-on-year performance.
Year to date revenue grew by 28% to $1179.1m in 9M 2024 from
$919.0m in 9M 2023, reflecting a combination of favourable market
conditions, strong underlying growth and the benefits of our
acquisitions.
Revenue growth was driven by Net commission income which
increased by 20% to $630.1m in 9M 2024 from $523.5m in 9M 2023. The
increase occurred mainly in Agency and Execution, which increased
by 28%, reflecting increased customer activity in Energy, as well
as from our acquisition of Cowen's prime services business. Net
commission income also notably increased in our Clearing segment
which increased by 7% versus 2023, driven by our Metals and
Agriculturals businesses.
Net trading income rose by 21% to $364.3m in 9M 2024 from
$299.9m in 9M 2023. This was driven by our Hedging and Investment
Solutions business, which increased by 28% to $157.7m, as demand
grew for commodity hedging and financial product services. Net
trading income was also significantly higher within our Market
Making segment, primarily from Metals reflecting exceptional market
conditions and market sentiment in the second quarter across
Copper, Aluminium and Nickel, following revised guidance on Russian
metals from the LME.
Net interest income increased by 80% to $164.5m in 9M 2024 from
$91.4m in 9M 2023. This growth reflected the benefit of higher
average investment returns, re-investment of maturing assets at
higher yields and the acquisition of Cowen's prime services
business in December 2023.
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
Change |
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
Change |
|
Average Fed Funds % |
5.27% |
|
5.25% |
|
2bps |
|
5.31% |
|
4.92% |
|
39 bps |
| |
|
|
|
|
|
|
|
|
|
|
|
| Average daily balances
($bn)1 |
13.8 |
|
11.2 |
|
2.6 |
|
12.9 |
|
12.9 |
|
— |
| |
|
|
|
|
|
|
|
|
|
|
|
| Interest income ($m) |
187.2 |
|
141.2 |
|
46.0 |
|
518.7 |
|
392.3 |
|
126.4 |
|
Interest paid out ($m) |
(69.3) |
|
(61.7) |
|
(7.6) |
|
(195.3) |
|
(173.1) |
|
(22.2) |
|
Interest on balances ($m) |
117.9 |
|
79.5 |
|
38.4 |
|
323.4 |
|
219.2 |
|
104.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net Yield on balances % |
3.4% |
|
2.8% |
|
60 bps |
|
3.3% |
|
2.3% |
|
100 bps |
| |
|
|
|
|
|
|
|
|
|
|
|
| Average notional debt
securities ($bn) |
2.7 |
|
2.3 |
|
0.4 |
|
2.6 |
|
2.1 |
|
0.5 |
| Yield on debt
securities % |
8.0% |
|
8.4% |
|
(40 bps) |
|
8.1% |
|
8.1% |
|
— |
| |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense
($m) |
(54.4) |
|
(48.1) |
|
(6.3) |
|
(158.9) |
|
(127.8) |
|
(31.1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Income ($m) |
63.5 |
|
31.4 |
|
32.1 |
|
164.5 |
|
91.4 |
|
73.1 |
- Average daily
balances are calculated using an average of the daily holdings in
exchanges, banks and other investments over the period. Previously,
average balances were calculated as the average month end amount of
segregated and non-segregated client balances that generated
interest income over a given period.
Net physical commodities income increased by 381% to $20.2m in
9M 2024 from $4.2m for 9M 2023. This increase was primarily due to
an increase in sales volumes from physical recycled metal and
physical oil sales, largely driven by growth in our recycled metals
business and the addition of physical oil broking capabilities.
Front office costs represent staff, systems and infrastructure
costs associated with running our revenue generating operations.
These costs increased 29% to $649.7m in 9M 2024, largely reflecting
a 25% increase in average front office headcount driven by recent
acquisitions, as well as organic growth.
Control and Support costs primarily reflect staff and property
related costs, along with professional fees and other
administrative expenses associated with the support functions.
These costs increased 27% to $276.0m in 9M 2024, primarily
reflecting investment in our Finance, Risk and Compliance
functions, to ensure we continually invest in our systems and
processes to support future sustainable growth, as well as
integrating additional Control and Support employees as part of
recent acquisitions. Total control and support average FTE grew 23%
to 1,063 for 9M 2024.
Adjusting items increased by 7% to $21.7m for 9M 2024 from
$20.3m the year earlier. These costs are primarily related to
corporate activities and are recognised within our corporate
segment. Adjusting items increased mainly due to costs incurred in
preparation for and associated with our successful IPO, including
accounting treatment for growth shares, as well as activities
related to our shareholders representing dividend like
contributions made to participants within share based payment
schemes and higher amortisation of acquired brands and customer
lists, these were partly offset by the non-recurrence of goodwill
impairment recognised in 2023 and lower owner fees reflecting the
shorter period of ownership.
As a result of the revenue and cost trends noted above, Adjusted
Operating Profit increased 35% to $239.7m in 9M 2024 and Adjusted
Operating Profit Margins improved to 20% in 9M 2024, from 19% in 9M
2023. In addition, as a result of the revenue, cost trends and
adjusting items noted above, Profit after Tax Margins increased to
14% in 9M 2024 from 12% in 9M 2023.
Segmental performance
Clearing
Marex provides clearing services across the range of energy,
commodity and financial markets. We act as principal for our
clients and provide access to 60 exchanges globally.
Performance for the three months ended 30 September
2024
Our Clearing business performed well in Q3 2024, and Revenue
increased 22% to $116.7m, up from $95.6m in Q3 2023. This was
driven by net interest income which rose by 54% to $54.7m in Q3
2024 from $35.6m in Q3 2023 primarily reflecting higher average
balances.
Adjusted Operating Profit increased by 32% to $62.4m in Q3 2024,
from $47.2m in Q3 2023. Adjusted Operating Profit Margins which
have increased by 400bps to 53% from 49% in the prior period.
Performance for the nine months ended 30 September
2024
Our Clearing business performed well in 9M 2024, benefiting from
higher levels of client activity on our platform, with 826m
contracts cleared in 9M 2024 which is 31% higher than in 9M
2023.
Revenue increased 18% to $341.6m in 9M 2024, up from $289.5m in
9M 2023, driven by net interest income which rose by 35% to $141.7m
in 9M 2024 from $105.0m in 9M 2023 reflecting the benefit of higher
interest rates and higher average balances. Net commission income
also grew by 7% to $197.4m. Revenue growth was generated from our
mature businesses, notably in Metals thanks to favourable market
conditions in the second quarter, as well as benefiting from our
growth initiatives, notably in Australia, Singapore and in our
Prime Services offerings.
Revenue growth was supported by investment in staff with average
headcount increasing by 12% to 299.
Adjusted Operating Profit increased by 24% to $181.4m for 9M
2024, from $145.8m in 9M 2023. Adjusted Operating Profit Margins
have increased by 300bps to 53% from 50% in the prior period.
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
|
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
|
|
|
$m |
|
$m |
|
Change |
|
$m |
|
$m |
|
Change |
|
Net commission income |
61.8 |
|
59.6 |
|
4% |
|
197.4 |
|
183.7 |
|
7% |
| Net interest income |
54.7 |
|
35.6 |
|
54% |
|
141.7 |
|
105.0 |
|
35% |
| Net
trading income |
0.2 |
|
0.4 |
|
(50%) |
|
2.5 |
|
0.8 |
|
213% |
|
Revenue |
116.7 |
|
95.6 |
|
22% |
|
341.6 |
|
289.5 |
|
18% |
| Front office costs |
(36.6) |
|
(31.2) |
|
17% |
|
(109.0) |
|
(87.9) |
|
24% |
| Control and support costs |
(17.6) |
|
(17.2) |
|
2% |
|
(51.0) |
|
(52.0) |
|
(2%) |
| Recovery/(provision) for
credit losses |
— |
|
— |
|
—% |
|
0.1 |
|
(3.7) |
|
(103%) |
| Depreciation and
amortisation |
(0.1) |
|
(0.1) |
|
—% |
|
(0.3) |
|
(0.2) |
|
50% |
| Other
Income and share of results of associates |
— |
|
0.1 |
|
n.m.3 |
|
— |
|
0.1 |
|
n.m.3 |
|
Adjusted Operating Profit
($m)1 |
62.4 |
|
47.2 |
|
32% |
|
181.4 |
|
145.8 |
|
24% |
| Adjusted Operating Profit
Margin1 |
53% |
|
49% |
|
400 bps |
|
53% |
|
50% |
|
300 bps |
| Front office headcount
(No.)2 |
313 |
|
277 |
|
13% |
|
313 |
|
277 |
|
13% |
| Contracts cleared (m) |
288.0 |
|
210.0 |
|
37% |
|
826.0 |
|
629.0 |
|
31% |
| Market
volumes (m) |
2,991.0 |
|
2,372.0 |
|
26% |
|
8,618.0 |
|
7,543.0 |
|
14% |
- These are non-IFRS
financial measures. See Appendix 1 “Non-IFRS Financial Measures and
Key Performance Indicators” for additional information and for a
reconciliation of each such IFRS measure to its most directly
comparable IFRS measure.
- The headcount is as
at the end of the period.
- n.m. = not
meaningful to present as a percentage.
Agency and Execution
Agency and Execution provides essential liquidity and execution
services to our clients primarily in the energy and financial
securities markets.
Our energy division provides essential liquidity to clients by
connecting buyers and sellers in the opaque OTC energy markets to
facilitate price discovery. We have leading positions in many of
the markets we operate in, including key gas and power markets in
Europe; environmental, petrochemical and crude markets in North
America; and fuel oil, LPG (liquefied petroleum gas) and
mid-distillates globally. We achieve this through the breadth and
depth of the service we offer to customers, including market
intelligence for each product we transact in, based on the
extensive knowledge and experience of our teams.
Our presence in the financial markets is growing as we integrate
and optimise recent acquisitions, allowing Marex to diversify its
asset class coverage away from traditional commodity markets. The
key revenue streams for our agency and execution financial
securities business are equity derivatives, primarily index options
and fixed income, including corporate and government bonds.
Performance for the three months ended 30 September
2024
Revenue increased by 30% to $170.4m in Q3 2024, from $131.3m in
the same period of 2023. This was primarily driven by the benefit
of the Cowen acquisition which increased Securities revenues by
$17.7m for Q3 2024. There was also strong organic revenue growth in
the quarter, notably in Rates which increased by $7.2m to $26.2m
due to higher volumes compared to the same period in 2023 and a new
structured rates desk which commenced in 2024. This was further
supplemented by the strong growth in our Energy business where
revenues for Q3 2024 increased 25% to $70.3m compared to $56.4m for
the same period in 2023, reflecting a combination of increased
activity levels in European Energy markets, good demand for our
environmentals and the benefit of our acquisitions.
Adjusted Operating Profit increased 60% to $25.6m in Q3 2024
from $16.0m in Q3 2023. This resulted in Adjusted Operating Profit
Margins increasing to 15% from 12%.
Performance for the nine months ended 30 September
2024
Revenue increased substantially to $503.0m in 9M 2024 compared
to $383.6m in 9M 2023, reflecting the positive market conditions in
the energy markets, and the benefit of recent acquisitions,
primarily Cowen, which increased our capabilities in financial
securities.
Energy revenue increased 36% for 9M 2024 to $213.6m, compared to
$157.4m in 9M 2023. This strong growth was a reflection of
continued improvement in activity levels in European Energy
markets, good demand for our environmentals offering as we continue
to support our clients in the energy transition, as well as
investment in new desks and capabilities.
Securities revenue increased by 28% to $288.2m for 9M 2024,
compared to $224.5m during 9M 2023, primarily as a result of the
benefit of the Cowen acquisition which completed in December 2023
and contributed $52.4m to revenues.
Adjusted Operating Profit increased to $70.5m in 9M 2024 from
$42.9m in 9M 2023 reflecting revenue growth and improved Adjusted
Operating Profit Margins, which increased to 14% in the 9M 2024, up
from 11% for the same period in 2023.
Average headcount increased by 25% to 669 in 9M 2024 from 537 in
9M 2023.
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
|
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
|
|
|
$m |
|
$m |
|
Change |
|
$m |
|
$m |
|
Change |
|
Securities |
99.7 |
|
74.3 |
|
34% |
|
288.2 |
|
224.5 |
|
28% |
| Energy |
70.3 |
|
56.4 |
|
25% |
|
213.6 |
|
157.4 |
|
36% |
| Other
revenue |
0.4 |
|
0.6 |
|
(33)% |
|
1.2 |
|
1.7 |
|
(29)% |
|
Revenue |
170.4 |
|
131.3 |
|
30% |
|
503.0 |
|
383.6 |
|
31% |
| Front office costs |
(127.0) |
|
(98.5) |
|
29% |
|
(385.8) |
|
(295.8) |
|
30% |
| Control and support costs |
(17.4) |
|
(16.4) |
|
6% |
|
(45.5) |
|
(43.6) |
|
4% |
| Provision for credit
losses |
— |
|
— |
|
0% |
|
(0.3) |
|
(0.6) |
|
(50)% |
| Depreciation and
amortisation |
(0.4) |
|
(0.3) |
|
33% |
|
(0.9) |
|
(0.7) |
|
29% |
| Other
Income and share of results of associates |
— |
|
(0.1) |
|
n.m.3 |
|
— |
|
— |
|
n.m.3 |
|
Adjusted Operating Profit
($m)1 |
25.6 |
|
16.0 |
|
60% |
|
70.5 |
|
42.9 |
|
64% |
| Adjusted Operating Profit
Margin1 |
15% |
|
12% |
|
300 bps |
|
14% |
|
11% |
|
300 bps |
| Front office headcount
(No.)2 |
655 |
|
555 |
|
18% |
|
655 |
|
555 |
|
18% |
| Marex volumes: Energy (m) |
14.0 |
|
13.0 |
|
8% |
|
44.0 |
|
31.0 |
|
42% |
| Marex volumes: Securities
(m) |
81.0 |
|
54.0 |
|
50% |
|
222.0 |
|
175.0 |
|
27% |
| Market volumes: Energy
(m) |
439.0 |
|
353.0 |
|
24% |
|
1,279.0 |
|
1,028.0 |
|
24% |
| Market
volumes: Securities (m) |
2,862.0 |
|
2,336.0 |
|
23% |
|
8,177.0 |
|
7,369.0 |
|
11% |
- These are non-IFRS
financial measures. See Appendix 1 “Non-IFRS Financial Measures and
Key Performance Indicators” for additional information and for a
reconciliation of each such IFRS measure to its most directly
comparable IFRS measure.
- The headcount is as
at the end of the period.
- n.m. = not
meaningful to present as a percentage.
Market Making
Our Market Making business provides direct liquidity to our
clients across a variety of products, primarily in the energy,
metals and agriculture markets. This ability to make prices and
trade as principal in a wide variety of energy, environmentals and
commodity markets differentiates us from many of our peers.
Performance for the three months ended 30 September
2024
Revenue increased by over 100% to $52.0m in Q3 2024, from $25.7m
in the same period of 2023. This was primarily driven by Metals
trading, which continued to perform strongly compared to a more
subdued performance in the three months a year earlier. Revenue
from securities also grew significantly by $6m primarily reflecting
a stronger performance from Equities and FX.
Adjusted Operating Profit increased significantly to $17.1m in
Q3 2024, reflecting strong Metals revenue growth as well as strong
profitability from Securities compared with losses in the prior
period. These factors also led to Adjusted Operating Profit Margins
increasing to 33% from 3% in the prior period.
Performance for the nine months ended 30 September
2024
Revenue increased by 40% to $163.3m in 9M 2024, from $116.4m in
9M 2023. This was driven by Metals trading which benefited from
unusual market conditions across Copper, Aluminium, Nickel in the
second quarter, following revised guidance on Russian metals from
the LME. Higher revenue in Metals and Securities was partly offset
by lower revenue in Agriculturals and Energy. Agriculturals had a
strong performance from Grains in 2023 and there was lower
volatility in the energy markets in the first 9 months of 2024.
Revenue growth was also supported by Front Office hiring, with
average headcount increasing by 14% to 104.
Adjusted Operating Profit increased by 126% to $56.6m in 9M
2024, reflecting strong revenue growth, which also led to Adjusted
Operating Profit Margins increasing to 35% in 9M 2024 from 21% in
9M 2023.
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
|
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
|
|
|
$m |
|
$m |
|
Change |
|
$m |
|
$m |
|
Change |
|
Metals |
31.8 |
|
9.6 |
|
231% |
|
100.2 |
|
42.8 |
|
134% |
| Agriculture |
3.8 |
|
5.2 |
|
(27)% |
|
18.1 |
|
27.2 |
|
(33)% |
| Energy |
6.0 |
|
6.5 |
|
(8)% |
|
19.8 |
|
24.3 |
|
(19)% |
|
Securities |
10.4 |
|
4.4 |
|
136% |
|
25.2 |
|
22.1 |
|
14% |
|
Revenue |
52.0 |
|
25.7 |
|
102% |
|
163.3 |
|
116.4 |
|
40% |
| Front office costs |
(29.0) |
|
(19.9) |
|
46% |
|
(84.2) |
|
(68.6) |
|
23% |
| Control and support costs |
(5.8) |
|
(5.7) |
|
2% |
|
(22.2) |
|
(23.7) |
|
(6)% |
| Depreciation and
amortisation |
(0.1) |
|
(0.1) |
|
0% |
|
(0.3) |
|
(0.2) |
|
50% |
| Other
Income and share of results of associates |
— |
|
0.2 |
|
n.m.3 |
|
— |
|
1.1 |
|
n.m.3 |
|
Adjusted Operating Profit
($m)1 |
17.1 |
|
0.2 |
|
n.m.3 |
|
56.6 |
|
25.0 |
|
126% |
| Adjusted Operating Profit
Margin1 |
33% |
|
3% |
|
n.m.3 |
|
35% |
|
21% |
|
1400 bps |
| Front office headcount
(No.)2 |
107 |
|
92 |
|
16% |
|
107 |
|
92 |
|
16% |
| Marex volumes: Metals (m) |
11.0 |
|
7.0 |
|
57% |
|
33.2 |
|
19.9 |
|
67% |
| Marex volumes: Agriculture
(m) |
9.0 |
|
7.0 |
|
29% |
|
27.0 |
|
21.0 |
|
29% |
| Marex volumes: Energy (m) |
0.6 |
|
0.5 |
|
20% |
|
1.5 |
|
1.5 |
|
0% |
| Marex volumes: Financials
(m) |
0.4 |
|
1.4 |
|
(71)% |
|
1.4 |
|
3.9 |
|
(64)% |
| Market volumes: Metals
(m) |
107.0 |
|
83.0 |
|
29% |
|
324.0 |
|
251.0 |
|
29% |
| Market volumes: Agriculture
(m) |
138.0 |
|
124.0 |
|
11% |
|
435.0 |
|
393.0 |
|
11% |
| Market volumes: Energy
(m) |
439.0 |
|
353.0 |
|
24% |
|
1,279.0 |
|
1,028.0 |
|
24% |
| Market
volumes: Financials (m) |
2,862.0 |
|
2,336.0 |
|
23% |
|
8,177.0 |
|
7,369.0 |
|
11% |
1. These are non-IFRS financial measures. See Appendix 1
“Non-IFRS Financial Measures and Key Performance Indicators” for
additional information and for a reconciliation of each such IFRS
measure to its most directly comparable IFRS measure.
2. The headcount is as at the end of the period.
3. n.m. = not meaningful to present as a percentage
Hedging and Investment Solutions
Our Hedging and Investment Solutions business provides high
quality bespoke hedging and investment solutions to our
clients.
Tailored commodity hedging solutions allow corporates to hedge
their exposure to movements in energy and commodity prices, as well
as currencies and interest rates, across a variety of different
time horizons. Our financial products offering allows investors to
gain exposure to a particular market or asset class, for example
equity indices, in a cost effective manner through
a structured product.
Performance for the three months ended 30 September
2024
The business delivered revenue growth of 13% to $35.6m in Q3
2024, up from $31.6m in Q3 2023. Revenue growth occurred across
both Hedging Solutions and Financial Products with both benefiting
from the expansion of the Sales team and onboarding of new
clients.
Adjusted Operating Profit fell by 16% to $7.3m in Q3 2024, down
from $8.7m in Q3 2023, reflecting higher front office expenses as
we continued to invest in the business, infrastructure and
distribution network for future growth.
Performance for the nine months ended 30 September
2024
The business performed strongly during 9M 2024, increasing
revenue by 28% to $121.6m, up from $94.9m in 9M 2023. Revenue
growth occurred across all regions, with hedging solutions
benefiting from favourable market events and volatility in Cocoa
and Coffee, while financial products benefited from positive
investor sentiment and equity market performance. We continue to
make good progress with our growth initiatives, expanding our
product coverage with custom index and FX capabilities, and
expanding our global footprint that now includes Australia and the
Middle East. As a result, we continue to bring new clients onto our
platform in both our Hedging Solutions and Financial Products
businesses.
Adjusted Operating Profit increased by 19% to $33.3m in 9M 2024,
up from $27.9m for the first 9M 2023. Adjusted Operating Profit
Margins fell by 2% to 27% as we continued to invest in our
people, with average headcount increasing by 68% to 171, as well as
in our infrastructure and distribution network to support future
growth.
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
|
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
|
|
|
$m |
|
$m |
|
Change |
|
$m |
|
$m |
|
Change |
|
Hedging solutions |
19.0 |
|
16.3 |
|
17% |
|
61.5 |
|
46.0 |
|
34% |
|
Financial products |
16.6 |
|
15.3 |
|
8% |
|
60.1 |
|
48.9 |
|
23% |
|
Revenue |
35.6 |
|
31.6 |
|
13% |
|
121.6 |
|
94.9 |
|
28% |
| Front office costs |
(22.5) |
|
(17.7) |
|
27% |
|
(70.7) |
|
(50.2) |
|
41% |
| Control and support costs |
(6.6) |
|
(6.1) |
|
8% |
|
(19.9) |
|
(17.6) |
|
13% |
| Recovery/(provision) for
credit losses |
1.0 |
|
(0.2) |
|
(600)% |
|
2.8 |
|
(0.2) |
|
(1,500)% |
| Depreciation and
amortisation |
(0.2) |
|
(0.1) |
|
100% |
|
(0.5) |
|
(0.2) |
|
150% |
| Other
Income and share of results of associates |
— |
|
1.2 |
|
n.m.4 |
|
— |
|
1.2 |
|
n.m.4 |
|
Adjusted Operating Profit
($m)1 |
7.3 |
|
8.7 |
|
(16)% |
|
33.3 |
|
27.9 |
|
19% |
| Adjusted Operating Profit
Margin1 |
21% |
|
28% |
|
(700 bps) |
|
27% |
|
29% |
|
(200 bps) |
| Front office headcount
(No.)2 |
185 |
|
119 |
|
55% |
|
185 |
|
119 |
|
55% |
|
Structured notes balance ($m)3 |
2,278.9 |
|
1,721.2 |
|
32% |
|
2,278.9 |
|
1,721.2 |
|
32% |
- These are non-IFRS
financial measures. See Appendix 1 “Non-IFRS Financial Measures and
Key Performance Indicators” for additional information and for a
reconciliation of each such IFRS measure to its most directly
comparable IFRS measure.
- The headcount is as
at the end of the period.
- The notional value
of the Structured notes balance was $2,423.4m as at 30 September
2024 and $2,038.2m at 30 September 2023.
- n.m. = not
meaningful to present as a percentage
Corporate
The Corporate segment includes the Group's control and support
functions. Corporate manages the resources of the Group, makes
investment decisions and provides operational support to the
business segments. Corporate net interest income is derived through
earning interest on house cash balances placed at banks and
exchanges. Revenue for Q3 2024 was $16.5m compared with $12.4m for
the Q3 2023, while Revenue for the 9M 2024 was $49.6m compared with
$34.6m in 9M 2023, driven by net interest income primarily
reflecting higher average Fed Fund interest rates.
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
|
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
|
|
|
$m |
|
$m |
|
Change |
|
$m |
|
$m |
|
Change |
|
Revenue |
16.5 |
|
12.4 |
|
33% |
|
49.6 |
|
34.6 |
|
43% |
| Control and support costs |
(44.7) |
|
(25.7) |
|
74% |
|
(137.4) |
|
(81.2) |
|
69% |
| (Provision)/recovery for
credit losses |
(0.4) |
|
— |
|
n.m.3 |
|
0.2 |
|
(0.2) |
|
(200%) |
| Depreciation and
amortisation |
(4.8) |
|
(4.9) |
|
(2%) |
|
(16.6) |
|
(18.4) |
|
(10%) |
| Other
Income and share of results of associates |
1.5 |
|
(1.0) |
|
(250%) |
|
2.1 |
|
1.0 |
|
110% |
|
Adjusted Operating Loss
($m)1 |
(31.9) |
|
(19.2) |
|
66% |
|
(102.1) |
|
(64.2) |
|
59% |
| Control
and support headcount (No.)2 |
1,117 |
|
903 |
|
24% |
|
1,117 |
|
903 |
|
24% |
- These are non-IFRS
financial measures. See Appendix 1 “Non-IFRS Financial Measures and
Key Performance Indicators” for additional information and for a
reconciliation of each such IFRS measure to its most directly
comparable IFRS measure.
- The headcount is as at the end of the period.
- n.m. = not meaningful to present as a percentage
Summary Financial Position
Our balance sheet continues to consist of high-quality liquid
assets which underpin client activity on our platform.
Total Assets have increased by $1.9 billion from $17.6 billion
at 31 December 2023 to $19.5 billion at 30 September 2024. This was
largely driven by a $1.3 billion increase in Cash and Liquid Assets
which increased from $4.5 billion at 31 December 2023 to $5.8
billion at 30 September 2024.
Securities balances also increased from $4.0 billion at 31
December 2023 to $5.1 billion at 30 September 2024, due to growth
in equity instruments driven by client activity.
The Group's equity base increased during the first nine months
of the year, with Total Equity increasing by 24% to $959.8m, up
from $775.9m as a result of strong profitability with Profit After
Tax of $161.3m in the nine months to 30 September 2024.
Furthermore, our share capital increased by $68.3m due to the
Primary Issuance completed during the IPO. These increases were
partly offset by dividend payments of $44.1m in H1 2024 and $9.9m
in Q3 2024.
|
|
30 September 2024 |
|
31 December 2023 |
|
|
| |
|
|
Restated1 |
|
|
|
|
$m |
|
$m |
|
Change |
|
Cash & Liquid Assets2 |
5,829.2 |
|
4,465.9 |
|
31% |
| Trade Receivables |
4,526.0 |
|
4,789.8 |
|
(6%) |
| Reverse Repo Agreements |
2,583.8 |
|
3,199.8 |
|
(19%) |
| Securities3 |
5,111.7 |
|
4,022.7 |
|
27% |
| Derivative Instruments |
1,008.6 |
|
655.6 |
|
54% |
| Other Assets4 |
226.4 |
|
258.2 |
|
(12%) |
|
Goodwill and Intangibles |
220.0 |
|
219.6 |
|
—% |
|
Total Assets |
19,505.7 |
|
17,611.6 |
|
11% |
|
Trade Payables |
8,078.3 |
|
6,785.9 |
|
19% |
| Repurchase Agreements |
2,333.7 |
|
3,118.9 |
|
(25%) |
| Securities5 |
4,740.8 |
|
4,248.1 |
|
12% |
| Debt Securities |
2,635.0 |
|
2,216.3 |
|
19% |
| Derivative Instruments |
652.1 |
|
402.2 |
|
62% |
| Other
Liabilities6 |
106.0 |
|
64.3 |
|
65% |
|
Total Liabilities |
18,545.9 |
|
16,835.7 |
|
10% |
|
Total Equity |
959.8 |
|
775.9 |
|
24% |
- Prior period
comparatives have been restated. Refer to note 2(c) in our
unaudited condensed consolidated financial statements for further
information.
- Cash & Liquid Assets are cash
and cash equivalents, treasury instruments pledged as collateral
and treasury instruments unpledged.
- Securities assets are equity
instruments and stock borrowing.
- Other Assets are inventory,
corporate income tax receivable, deferred tax, investment in
associate, investments, right-of-use assets, and property plant and
equipment.
- Securities liabilities are stock
lending and short securities.
- Other Liabilities are deferred tax
liability, lease liability, provisions and corporation tax.
Liquidity
|
|
30 September 2024 |
|
31 December 2023 |
|
|
$m |
|
$m |
|
Total available liquid resources |
1,831.9 |
|
1,369.8 |
|
Liquidity headroom |
1,189.6 |
|
738.8 |
A prudent approach to capital and liquidity and commitment to
maintaining an investment grade credit rating are core principles
which underpin the successful delivery of our growth strategy. As
at 30 September 2024, the Group held $1,831.9m of total available
liquid resources, including the undrawn portion of the RCF,
compared with $1,369.8m at the end of 2023.
Group liquidity resources consist of cash and high-quality
liquid assets that can be quickly converted to meet immediate and
short-term obligations. The resources include non-segregated cash,
short-term money market funds and unencumbered securities
guaranteed by the U.S. Government. The Group also includes any
undrawn portion of its committed revolving credit facility (‘RCF’)
in its total available liquid resources. The unsecured revolving
credit facility of $150m remains undrawn as at 30 September
2024.
Liquidity headroom is based on the Group’s Liquid Asset
Threshold Requirement, which is prepared according to the
principles of the UK Investment Firms Prudential Regime (IFPR). The
requirement includes a liquidity stress impact calculated from a
combination of systemic and idiosyncratic risk factors.
Facilities held by operating subsidiaries, and which are only
available to that relevant subsidiary, have been excluded from
these figures as they are not available to the entire Group.
In February 2023, the Group successfully completed its inaugural
public senior bond issuance, raising €300m of additional liquidity.
The bonds have an annual coupon of 8.375%, mature in February 2028
and have been rated BBB- by both S&P and Fitch.
Regulatory capital
The Group is subject to consolidated supervision by the UK
Financial Conduct Authority and has regulated subsidiaries in
jurisdictions both inside and outside of the UK.
The Group is regulated as a MIFIDPRU investment firm under IFPR.
The minimum capital requirement as at 30 September 2024 was
determined by the Own Funds Threshold Requirement (‘OFTR’) set via
an assessment of the Group’s capital adequacy and risk assessment
conducted annually.
The Group and its subsidiaries are in compliance with their
regulatory requirements and are appropriately capitalised relative
to the minimum requirements as set by the relevant competent
authority. The Group maintained a capital surplus over its
regulatory requirements at all times.
Maintaining a prudent approach to capital and liquidity in order
to maintain an investment grade credit rating are core principles
which underpin the successful delivery of our growth strategy. The
Group manages its capital structure in order to comply with
regulatory requirements, ensuring its capital base is more than
adequate to cover the risks inherent in the business and to
maximise shareholder value through the strategic deployment of
capital to support the Group’s growth and strategic development.
The Group performs business model assessment, business and capital
forecasting, stress testing and recovery planning at least
annually. The following table summarises the Group’s capital
position as at 30 September 2024 and as at the year end:
|
|
30 September 2024 |
|
31 December 2023 |
|
|
$m |
|
$m |
|
Core equity Tier 1 Capital1 |
629.3 |
|
437.7 |
| Additional Tier 1 Capital (net
of issuance costs) |
97.6 |
|
97.6 |
| Tier 2 Capital |
2.1 |
|
3.1 |
|
Total Capital resources |
729.0 |
|
538.4 |
|
|
|
|
|
|
|
|
|
|
|
Own Funds Threshold Requirement2 |
235.1 |
|
235.1 |
|
Total Capital ratio3 |
310% |
|
229% |
- Core Tier 1 Capital contains the unaudited results for the
period, which does not form a part of capital resources until they
are audited.
- Own Funds Requirement presented as Own Funds Threshold
Requirement based on the latest approved Group Internal Capital
Assessment.
- The Group’s total capital resources as a percentage of Own
Funds Requirement.
At 30 September 2024, the Group had a Total Capital Ratio of
310% (31 December 2023: 229%), representing significant capital
headroom to minimum requirements. The increase in the Total Capital
Ratio resulted from an increase in total capital resources due to
profit (unaudited) in Q3 2024.
Dividend
The Board of Directors approved an interim dividend of $0.14 per
share, expected to be paid on 10 December 2024 to shareholders on
record as at close of business on 25 November 2024.
Forward looking statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including expected financial results
and Adjusted Operating Profit and Reported Profit Before Tax,
expected growth and business plans, expected investments and
dividend payments. In some cases, these forward-looking statements
can be identified by words or phrases such as “may,” “will,”
“expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,”
“believe,” “potential,” “continue,” “is/are likely to” or other
similar expressions.
These forward-looking statements are subject to risks,
uncertainties and assumptions, some of which are beyond our
control. In addition, these forward-looking statements reflect our
current views with respect to future events and are not a guarantee
of future performance. Actual outcomes may differ materially from
the information contained in the forward-looking statements as a
result of a number of factors, including, without limitation:
subdued commodity market activity or pricing levels; the effects of
geopolitical events, terrorism and wars, such as the effect of
Russia’s military action in Ukraine, on market volatility, global
macroeconomic conditions and commodity prices; changes in interest
rate levels; the risk of our clients and their related financial
institutions defaulting on their obligations to us; regulatory,
reputational and financial risks as a result of our international
operations; software or systems failure, loss or disruption of data
or data security failures; an inability to adequately hedge our
positions and limitations on our ability to modify contracts and
the contractual protections that may be available to us in OTC
derivatives transactions; market volatility, reputational risk and
regulatory uncertainty related to commodity markets, equities,
fixed income, foreign exchange and cryptocurrency; the impact of
climate change and the transition to a lower carbon economy on
supply chains and the size of the market for certain of our energy
products; the impact of changes in judgments, estimates and
assumptions made by management in the application of our accounting
policies on our reported financial condition and results of
operations; lack of sufficient financial liquidity; if we fail to
comply with applicable law and regulation, we may be subject to
enforcement or other action, forced to cease providing certain
services or obliged to change the scope or nature of our
operations; significant costs, including adverse impacts on our
business, financial condition and results of operations, and
expenses associated with compliance with relevant regulations; and
if we fail to remediate the material weaknesses we identified in
our internal control over financial reporting or prevent material
weaknesses in the future, the accuracy and timing of our financial
statements may be impacted, which could result in material
misstatements in our financial statements or failure to meet our
reporting obligations and subject us to potential delisting,
regulatory investments or civil or criminal sanctions, and other
risks discussed under the caption “Risk Factors” in our final
prospectus filed pursuant to 424(b)(4) with the Securities and
Exchange Commission (the “SEC”) on 31 October 2024 and our other
reports filed with the SEC.
The forward-looking statements made in this press release relate
only to events or information as of the date on which the
statements are made in this press release. Except as required
by law, we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events.
In addition, statements that “we believe” and similar statements
reflect our beliefs and opinions on the relevant subject. These
statements are based upon information available to us as of the
date of this press release, and while we believe such information
forms a reasonable basis for such statements, such information may
be limited or incomplete, and our statements should not be read to
indicate that we have conducted an exhaustive inquiry into, or
review of, all potentially available relevant information. These
statements are inherently uncertain, and investors are cautioned
not to unduly rely upon these statements.
Non-IFRS Financial Measures and Key Performance
Indicators
This press release contains non-IFRS financial measures,
including Adjusted Operating Profit, Adjusted Operating Profit
Margin, Adjusted Earnings per Share, Adjusted Diluted Earnings per
Share, Adjusted Operating Profit after Tax Attributable to Common
Equity and Return on Adjusted Operating Profit after Tax
Attributable to Common Equity. These non-IFRS financial measures
are presented for supplemental informational purposes only and
should not be considered a substitute for profit after tax, profit
margin, return on equity or any other financial information
presented in accordance with IFRS and may be different from
similarly titled non-IFRS financial measures used by other
companies.
We anticipate that full year Adjusted Operating Profit will be
approximately $300m to $305m and that our Reported Profit Before
Tax for 2024 will be approximately $277m to $282m. The adjustments
to full year Reported Profit Before Tax guidance as reflected in
full year Adjusted Operating Profit guidance are: $3.8 million for
amortisation of acquired brands and customer lists, $2.4 million of
activities related to shareholders, $2.2 million of employer tax on
vesting of the growth shares, $2.4 million of owner fees, $8.6
million of IPO preparation costs, and $2.3 million of fair value of
the cash settlement option on the growth shares, each of which was
incurred in Q3 2024 as shown under 'Reconciliation of Non-IFRS
Financial Measures and Key Performance Indicators'. In addition,
our Adjusted Operating Profit guidance reflects an estimated $1.3
million related to the amortisation of acquired brands and customer
lists expected to be incurred in Q4 2024.
Neither the Group’s independent auditors, nor any other
independent accountants, have compiled, examined, or performed any
procedures with respect to the anticipated full year results
contained herein, nor have they expressed any opinion or any other
form of assurance on such information or its achievability, and
assume no responsibility for, and disclaim any association with,
the anticipated full year results.
Adjusted Operating Profit
We define Adjusted Operating Profit as profit after tax adjusted
for (i) tax, (ii) goodwill impairment charges, (iii) acquisition
costs, (iv) bargain purchase gains, (v) owner fees, (vi)
amortisation of acquired brands and customer lists, (vii)
activities in relation to shareholders, (viii) employer tax on the
vesting of Growth Shares, (ix) IPO preparation costs and (x) fair
value of the cash settlement option on the Growth Shares. Items (i)
to (x) are referred to as “Adjusting Items.” Adjusted Operating
Profit is the primary measure used by our management to evaluate
and understand our underlying operations and business trends,
forecast future results and determine future capital investment
allocations. Adjusted Operating Profit is the measure used by our
executive board to assess the financial performance of our business
in relation to our trading performance. The most directly
comparable IFRS Accounting Standards measure is profit after tax.
We believe Adjusted Operating Profit is a useful measure as it
allows management to monitor our ongoing core operations and
provides useful information to investors and analysts regarding the
net results of the business. The core operations represent the
primary trading operations of the business.
Adjusted Operating Profit Margin
We define Adjusted Operating Profit Margin as Adjusted Operating
Profit (as defined above) divided by revenue. We believe that
Adjusted Operating Profit Margin is a useful measure as it allows
management to assess the profitability of our business in relation
to revenue. The most directly comparable IFRS Accounting Standards
measure is profit margin, which is Profit after Tax divided by
revenue.
Adjusted Operating Profit after Tax Attributable to
Common Equity
We define Adjusted Operating Profit after Tax Attributable to
Common Equity as profit after tax adjusted for the items outlined
in the Adjusted Operating Profit paragraph above. Additionally,
Adjusted Operating Profit after Tax Attributable to Common Equity
is also adjusted for (i) tax and the tax effect of the Adjusting
Items to calculate Adjusted Operating Profit and (ii) profit
attributable to Additional Tier 1 (“AT1”) note holders, net of tax,
which is the coupons on the AT1 issuance and accounted for as
dividends, adjusted for the tax benefit of the coupons. We define
Common Equity as being the equity belonging to the holders of the
Group’s share capital. We believe Adjusted Operating Profit after
Tax Attributable to Common Equity is a useful measure as it allows
management to assess the profitability of the equity belonging to
the holders of the Group’s share capital. The most directly
comparable IFRS Accounting Standards measure is profit after
tax.
Return on Adjusted Operating Profit after Tax
Attributable to Common Equity
We define the Return on Adjusted Operating Profit after Tax
Attributable to Common Equity as the Adjusted Operating Profit
after Tax Attributable to Common Equity (as defined above) divided
by the average Common Equity for the period. Common Equity is
defined as being the equity belonging to the holders of the Group’s
share capital. Common Equity is calculated as the average balance
of total equity minus additional Tier 1 capital. For the nine
months ended 30 September 2024 and 2023, Common Equity is
calculated as the average balance of total equity minus additional
Tier 1 capital, as at 31 December of the prior period, 31 March, 30
June and 30 September of the current period. For the three months
ended 30 September 2024 and 2023 Common Equity is calculated as the
average of 30 September and 30 June of the current period. For the
nine months ended 30 September 2024 and 2023, Return on Adjusted
Operating Profit after Tax Attributable to Common Equity is
calculated for comparison purposes on an annualised basis as
Adjusted Operating Profit after Tax Attributable to Common Equity
for the period divided by nine and multiplied by twelve and then
divided by average Common Equity for the period. It is presented on
an annualised basis for comparison purposes. For the three months
ended 30 September 2024 and 2023, Return on Adjusted Operating
Profit after Tax Attributable to Common Equity is calculated for
comparison purposes on an annualised basis as Adjusted Operating
Profit after Tax Attributable to Common Equity for the period is
multiplied by four and then divided by average Common Equity for
the period. It is presented on an annualised basis for comparison
purposes.
We believe Return on Adjusted Operating Profit after Tax
Attributable to Common Equity is a useful measure as it allows
management to assess the return on the equity belonging to the
holders of the Group’s share capital. The most directly comparable
IFRS Accounting Standards measure for Return on Adjusted Operating
Profit after Tax Attributable to Common Equity is return on equity,
which is calculated as profit after tax for the period divided by
average equity. Average equity for the nine months ended 30
September 2024 and 2023, average equity is calculated as the
average of total equity as at 31 December of the prior period, 31
March, 30 June and 30 September of the current period. For the
three months ended 30 September 2024 and 2023 Common Equity is
calculated as the average of 30 September and 30 June of the
current period. For the nine months ended 30 September 2024 and
2023, return on equity is calculated for comparison purposes on an
annualised basis as profit after tax for the period divided by nine
and multiplied by twelve and then divided by average Common Equity
for the period. For the three months ended 30 September 2024 and
2023, Return on Adjusted Operating Profit after Tax Attributable to
Common Equity is calculated for comparison purposes on an
annualised basis as Adjusted Operating Profit after Tax
Attributable to Common Equity for the period is multiplied by four
and then divided by average Common Equity for the period. It is
presented on an annualised basis for comparison purposes.
Adjusted Earnings per Share and Adjusted Diluted
Earnings per Share
Adjusted Earnings per Share is defined as the Adjusted Operating
Profit after Tax Attributable to Common Equity for the period
divided by weighted average number of ordinary shares for the
period. We believe Adjusted Earnings per Share is a useful measure
as it allows management to assess the profitability of our business
per share. The most directly comparable IFRS Accounting Standards
metric is basic earnings per share. This metric has been designed
to highlight the Adjusted Operating Profit After Tax Attributable
to Common Equity over the available share capital of the Group.
Adjusted Diluted Earnings per Share is defined as the Adjusted
Operating Profit after Tax Attributable to Common Equity for the
period divided by the diluted weighted average shares for the
period. We believe Adjusted Diluted Earnings per Share is a useful
measure as it allows management to assess the profitability of our
business per share on a diluted basis. Dilution is calculated in
the same way as it has been for diluted earnings per share. The
most directly comparable IFRS Accounting Standards metric is
diluted earnings per share.
We believe that these non-IFRS financial measures provide useful
information to both management and investors by excluding certain
items that management believes are not indicative of our ongoing
operations. Our management uses these non-IFRS financial measures
to evaluate our business strategies and to facilitate operating
performance comparisons from period to period. We believe that
these non-IFRS financial measures provide useful information to
investors because they improve the comparability of our financial
results between periods and provide for greater transparency of key
measures used to evaluate our performance. In addition these
non-IFRS financial measures are frequently used by securities
analysts, investors and other interested parties in their
evaluation of companies comparable to us, many of which present
related performance measures when reporting their results.
These non-IFRS financial measures are used by different
companies for differing purposes and are often calculated in
different ways that reflect the circumstances of those companies.
In addition, certain judgments and estimates are inherent
in our process to calculate such non-IFRS financial measures.
You should exercise caution in comparing these non-IFRS financial
measures as reported by other companies.
These non-IFRS financial measures have limitations as analytical
tools, and you should not consider them in isolation or as
substitutes for analysis of our results as reported under IFRS
Accounting Standards. Some of these limitations are:
- they do not reflect costs incurred
in relation to the acquisitions that we have undertaken;
- they do not reflect impairment of
goodwill;
- other companies in our industry may
calculate these measures differently than we do, limiting their
usefulness as comparative measures; and
- the adjustments made in calculating
these non-IFRS financial measures are those that management
considers to be not representative of our core operations and,
therefore, are subjective in nature.
Accordingly, prospective investors should not place undue
reliance on these non-IFRS financial measures.
We also use key performance indicators (“KPIs”) such as Average
Balances, Trades Executed, and Contracts Cleared to assess the
performance of our business and believe that these KPIs provide
useful information to both management and investors by showing the
growth of our business across the periods presented.
Our management uses these KPIs to evaluate our business
strategies and to facilitate operating performance comparisons from
period to period. We define certain terms used in this release as
follows:
“FTE” means the number of our full-time equivalents as of the
end of a given period, which includes permanent employees and
contractors.
“Average FTE” means the average number of our full-time
equivalents over the period, including permanent employees and
contractors.“Average Daily Balances” means the average of the daily
holdings in exchanges, banks and other investments over the period.
Previously, average balances were calculated as the average month
end amount of segregated and non-segregated client balances that
generated interest income over a given period.
“Trades Executed” means the total number of trades executed on
our platform in a given year.
“Total Capital Ratio” means our total capital resources in a
given period divided by the capital requirement for such period
under the IFPR.
“Contracts Cleared” means the total number of contracts cleared
in a given period.
"Market Volumes" are calculated as follows:
- All volumes traded on Marex
key exchanges (CBOT, CME, Eurex, Euronext, ICE, LME, NYMEX
COMEX, SGX)
- Energy volumes on CBOT, Eurex,
ICE, NYMEX, SGX
- Financial securities (corporate
bonds, equities, FX, repo, volatility) on CBOE, CBOT, CME,
Eurex, Euronext, ICE, SGX
- Metals, agriculture and energy volumes on CBOT, CME,
Eurex, Euronext, ICE, LME, NYMEX COMEX, SGX
Reconciliation of Non-IFRS Financial Measures and Key
Performance Indicators:
|
|
3 months ended 30 September 2024 |
|
3 months ended 30 September 2023 |
|
9 months ended 30 September 2024 |
|
9 months ended 30 September 2023 |
|
|
$m |
|
$m |
|
$m |
|
$m |
|
Profit After Tax |
58.4 |
|
32.4 |
|
161.3 |
|
113.2 |
|
Taxation charge |
20.6 |
|
15.2 |
|
56.7 |
|
43.9 |
|
Profit Before Tax |
79.0 |
|
47.6 |
|
218.0 |
|
157.1 |
|
Goodwill impairment charge1 |
— |
|
— |
|
— |
|
10.7 |
|
Bargain purchase gains2 |
— |
|
— |
|
— |
|
(0.3) |
|
Acquisition costs3 |
— |
|
0.1 |
|
— |
|
0.6 |
|
Amortisation of acquired brands and customer lists4 |
1.2 |
|
0.6 |
|
3.8 |
|
1.4 |
|
Activities relating to shareholders5 |
— |
|
0.9 |
|
2.4 |
|
0.9 |
|
Employer tax on vesting of the growth shares6 |
— |
|
— |
|
2.2 |
|
— |
|
Owner fees7 |
— |
|
1.5 |
|
2.4 |
|
4.8 |
|
IPO preparation costs8 |
0.3 |
|
2.2 |
|
8.6 |
|
2.2 |
|
Fair value of the cash settlement option on the growth shares9 |
— |
|
— |
|
2.3 |
|
— |
|
Adjusted Operating Profit |
80.5 |
|
52.9 |
|
239.7 |
|
177.4 |
|
Tax and the tax effect on the Adjusting Items10 |
(20.5) |
|
(15.8) |
|
(59.1) |
|
(45.3) |
|
Profit attributable to AT1 note holders, net of tax11 |
(2.5) |
|
(2.5) |
|
(7.4) |
|
(7.4) |
|
Adjusted Operating Profit after Tax Attributable to Common
Equity |
57.5 |
|
34.6 |
|
173.2 |
|
124.7 |
|
|
|
|
|
|
|
|
|
| Profit after Tax
Margin |
15% |
|
11% |
|
14% |
|
12% |
| Adjusted Operating Profit
Margin12 |
21% |
|
18% |
|
20% |
|
19% |
| Basic Earnings per
Share($) |
0.78 |
|
0.44 |
|
2.20 |
|
1.57 |
| Diluted Earnings per
Share ($) |
0.73 |
|
0.41 |
|
2.05 |
|
1.47 |
| Adjusted Earnings per
Share($)13 |
0.82 |
|
0.53 |
|
2.51 |
|
1.90 |
| Adjusted Diluted
Earnings per Share ($)14 |
0.76 |
|
0.49 |
|
2.35 |
|
1.78 |
| Common
Equity15 |
823.5 |
|
622.0 |
|
749.7 |
|
622.0 |
| Return on
Equity16 |
25% |
|
18% |
|
25% |
|
21% |
|
Return on Adjusted Operating Profit after Tax Attributable
to Common Equity (%)17 |
28% |
|
22% |
|
31% |
|
27% |
- Goodwill impairment
charges in 2023 relates to the impairment recognised for goodwill
relating to the Volatility Performance Fund S.A. CGU (‘VPF’)
largely due to declining projected revenue.
- A bargain purchase
gain was recognised as a result of the ED&F Man Capital Markets
division acquisition.
- Acquisition costs
are costs, such as legal fees incurred in relation to the business
acquisitions of ED&F Man Capital Markets business, the OTCex
group and Cowen's Prime Services and Outsourced Trading
business.
- This represents the
amortisation charge for the period of acquired brands and customers
lists.
- Activities in
relation to shareholders primarily consist of dividend-like
contributions made to participants within certain of our
share-based payments schemes.
- Employer tax on
vesting of the growth shares represents the Group's tax charge
arising from the vesting of the growth shares.
- Owner fees relate to
management services fees paid to parties associated with the
ultimate controlling party based on a percentage of our EBITDA in
each year, presented in the income statement within other
expenses.
- IPO preparation
costs related to consulting, legal and audit fees, presented in the
income statement within other expenses.
- Fair value of the
cash settlement option on the growth shares represents the fair
value liability of the growth shares at $2.3m. Subsequent to the
initial public offering when the holders of the growth shares
elected to settle the awards in ordinary shares, the liability was
derecognised.
- Tax and the tax
effect on the Adjusting Items represents the tax for the period and
the tax effect of the other Adjusting Items removed from profit
after tax to calculate Adjusted Operating Profit. The tax effect of
the other Adjusting Items was calculated at the Group’s effective
tax rate for the respective period.
- Profit attributable
to AT1 note holders, net of tax are the coupons on the AT1
issuance, which are accounted for as dividends, adjusted for the
tax benefit of the coupons which is calculated using the Group’s
effective tax rate for the period.
- Adjusted Operating
Profit Margin is calculated by dividing Adjusted Operating Profit
(as defined above) divided by revenue for the period.
- The weighted average
numbers of shares used in the calculation for the nine months ended
30 September 2024 and 2023 were 68,875,961 and 65,725,812
respectively. The weighted average numbers of shares used in the
calculation for the three months ended 30 September 2024 and 2023
were 70,290,886 and 65,683,407 respectively. Weighted average
number of shares have been restated as applicable for the Group's
reverse share split.
- The weighted average
numbers of diluted shares used in the calculation for the nine
months ended 30 September 2024 and 2023 were 73,842,790 and
70,030,677 respectively. The weighted average numbers of shares
used in the calculation for the three months ended 30 September
2024 and 2023 were 75,257,715 and 69,988,272 respectively. Weighted
average number of shares have been restated as applicable for the
Group's reverse share split.
- Common Equity is
calculated as the average balance of total equity minus additional
Tier 1 capital. For the nine months ended 30 September 2024 and
2023, Common Equity is calculated as the average balance of total
equity minus additional Tier 1 capital, as at 31 December of the
prior period, 31 March, 30 June and 30 September of the current
period.
- Return on equity is
calculated as profit after tax for the period divided by average
equity.
- Please refer to
Appendix 1 “Non-IFRS Financial Measures and Key Performance
Indicators” for calculation methodology.
Revenue
The following tables presents the Group's segmental revenue for
the periods indicated:
|
3 months ended 30 September 2024 |
Clearing |
|
Agency and Execution |
|
Market Making |
|
Hedging and Investment Solutions |
|
Corporate |
|
Total |
|
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net commission
income/(expense) |
61.8 |
|
141.9 |
|
(0.9) |
|
— |
|
— |
|
202.8 |
| Net trading
income |
0.2 |
|
20.3 |
|
55.4 |
|
45.7 |
|
— |
|
121.6 |
| Net interest
income/(expense) |
54.7 |
|
7.6 |
|
(5.2) |
|
(10.1) |
|
16.5 |
|
63.5 |
|
Net physical commodities income |
— |
|
0.6 |
|
2.7 |
|
— |
|
— |
|
3.3 |
|
Revenue |
116.7 |
|
170.4 |
|
52.0 |
|
35.6 |
|
16.5 |
|
391.2 |
|
3 months ended 30 September 2023 |
Clearing |
|
Agency and Execution |
|
Market Making |
|
Hedging and Investment Solutions |
|
Corporate |
|
Total |
|
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net commission
income/(expense) |
59.6 |
|
117.6 |
|
(0.9) |
|
— |
|
— |
|
176.3 |
| Net trading income/(expense) |
0.4 |
|
12.7 |
|
33.6 |
|
40.8 |
|
(0.1) |
|
87.4 |
| Net interest
income/(expense) |
35.6 |
|
1.0 |
|
(8.5) |
|
(9.2) |
|
12.5 |
|
31.4 |
| Net
physical commodities income |
— |
|
— |
|
1.5 |
|
— |
|
— |
|
1.5 |
|
Revenue |
95.6 |
|
131.3 |
|
25.7 |
|
31.6 |
|
12.4 |
|
296.6 |
|
9 months ended 30 September 2024 |
Clearing |
|
Agency and Execution |
|
Market Making |
|
Hedging and Investment Solutions |
|
Corporate |
|
Total |
|
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net commission
income/(expense) |
197.4 |
|
436.4 |
|
(3.7) |
|
— |
|
— |
|
630.1 |
| Net trading
income |
2.5 |
|
40.2 |
|
163.9 |
|
157.7 |
|
— |
|
364.3 |
| Net interest
income/(expense) |
141.7 |
|
25.1 |
|
(15.8) |
|
(36.1) |
|
49.6 |
|
164.5 |
|
Net physical commodities income |
— |
|
1.3 |
|
18.9 |
|
— |
|
— |
|
20.2 |
|
Revenue |
341.6 |
|
503.0 |
|
163.3 |
|
121.6 |
|
49.6 |
|
1,179.1 |
|
9 months ended 30 September 2023 |
Clearing |
|
Agency and Execution |
|
Market Making |
|
Hedging and Investment Solutions |
|
Corporate |
|
Total |
|
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
$m |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net commission
income/(expense) |
183.7 |
|
342.1 |
|
(2.3) |
|
— |
|
— |
|
523.5 |
| Net trading income/(expense) |
0.8 |
|
38.9 |
|
136.9 |
|
123.4 |
|
(0.1) |
|
299.9 |
| Net interest
income/(expense) |
105.0 |
|
2.6 |
|
(22.4) |
|
(28.5) |
|
34.7 |
|
91.4 |
| Net
physical commodities income |
— |
|
— |
|
4.2 |
|
— |
|
— |
|
4.2 |
|
Revenue |
289.5 |
|
383.6 |
|
116.4 |
|
94.9 |
|
34.6 |
|
919.0 |
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