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Screenshot of a breaking news alert e-mail from Q2 2017
Institutional FX exchange and liquidity provider LMAX Exchange has announced its results for 2017, indicating continued and healthy top and bottom line growth for the company.
Although it was not formally announced by the company, we understand that the company’s top line Revenues grew by just over 10% in 2017, coming in at £30.5 million (USD $41 million), versus £27.7 million in 2016. The top line growth trickled down nicely into a higher level of profitability for LMAX Exchange, with Gross Profit of £25.4 million (up 22% over 2016) and EBITDA of £8.8 million, up 58% from the previous year.
Driving revenue growth was were annual volumes from institutional clients increasing 58% year-on-year, reflecting the company’s expanding client base of institutions around the world, following robust and rapid growth on its international exchanges. Trading volumes on New York (NY4) were up fivefold year on year, while volumes on Tokyo (TY3) increased threefold year on year.
2017 completes a phenomenal two-year run for LMAX Exchange, which has seen two-year (2015-2017) annually compounded growth in EBITDA (151% annual growth), Gross Profit (28% annual growth), and Notional volumes (20% annual growth).
David Mercer, CEO of LMAX Exchange said:
We bring a fundamentally different and positive vision to the FX industry – giving clients transparent, fair execution and lower trading costs. Our results demonstrate the increasing appeal of order-driven firm liquidity for trading institutions and the growing focus on precision and certainty of execution. LMAX Exchange has built a leading institutional exchange for FX trading and we are proud to count over 300 large funds and brokers in our global institutional client base, and all major global banks and non-banks among our 25 liquidity providers.
As an established, independent business, gaining significant traction year on year, we are in an exceptionally good position to drive further growth in client funds and trading volumes. We will continue to fulfil our ambition of capturing a larger share of the institutional market as we propagate the exchange model globally.
The Company expects strong revenue growth to continue and its market share to increase further in 2018. We are witnessing continued focus on governance and regulatory changes driving more FX trading onto regulated exchanges like LMAX Exchange. These developments are commensurate with the Company’s vision of transforming global FX trading into a fairer and more transparent market place.
LMAX Exchange recently underwent a management buyout, with a 31.35% stake in the company bought back from Paddy Power Betfair for £21.945 million with funding from Silicon Valley Bank. The transaction valued LMAX Exchange at £70 million. The buyback brings 95% of the company under the control of management.
Strategically, LMAX Exchange recently underwent a regulatory-driven reorganization, diving the company into two units due to MiFID II: MTF and Broker.