FXCM confirms it is actively pursuing acquisitions

FXCM reports healthy Q3 results and Oct volumes, shares trade up.

On its Q3 conference call yesterday (more on Q3 results below), in response to a question regarding what it plans to do with its growing (now $260 million) cash balance in addition to its $155 million credit line, FXCM confirmed that it is actively pursuing acquisitions, and indeed is currently actively engaged in acquisition discussions with more than one potential target.

However, FXCM management said that they do not see any big acquisitions in the pipeline nor the acquisition of any of its major cometitors worldwide, but rather smaller ones. As well, FXCM is actively buying back its own stock, with a share repurchase program of $51 million now in place, in addition to $28 million already repurchased.

As far as FXCM’s Q3 results are concerned, the company beat analyst expectations reporting Revenues of $115 million, EBITDA of $37 million and Net Income of $12.5 million — all nice increases from both last quarter and from Q3 last year. Recent acquisition Lucid Markets contributed more than 40% of company-wide EBITDA. And post-Q3, October volumes (see chart above) came in strong at $324 billion retail (up 7% over September) and $53 billion institutional (up 15%). Just as importantly, margins on retail trading edged up to $99/million, versus $90 in Q2 and $93 in Q3-2011.

The stock market certainly cheered FXCM’s quarter and October volume numbers, with FXCM stock (NYSE: FXCM) trading up 5% on Thursday after the figures were released.

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