LMAX 2013 Revenues £18 million, Net Loss £4 million – LeapRate Exclusive

Specialist FX multilateral trading facility LMAX Exchange has today released its annual report for the year ended December 31, 2013, which summarizes the firm’s net loss during the year, amounting to £3.9 million ($7M).

Highlights of LMAX’s annual report include:

  • Revenues at LMAX increased nearly five-fold from 2012 to £18.1M (about $30M)…
  • … but LMAX still posted a Net Loss for the year of £3.9M ($7M).
  • LMAX did note that it was profitable by Q4.
  • LMAX beefed up its cash reserves by raising £2.6M ($4.4M) in new equity after year-end. The company’s own-cash had been reduced to just £2.1M at year-end, down from £5.2M as at Dec 31 2012.
  • LMAX holds £34M ($57M) in segregated client funds, up from £21M at year-end 2012
  • LMAX major expansion plans are into Asia.

Total revenues during 2013 were £18.1 million ($30M), during a year which generated all round high volumes for the vast majority of industry participants globally.

At the very start of this year, LMAX CEO David Mercer made the bold prediction that FX volumes would double by 2020, with the firm having embarked on some interesting developments recently including the introduction of the facility to trade Ven virtual currency, as well as having concentrated significantly on providing its ‘no last-look’ exchange business during last year to its broker partners, as well as the company’s foray into the Interbank sector in March last year, with a platform which delivers all the benefits of exchange quality execution exclusively to banks. The company’s lnterbank division had 17 banks connected to the exchange as at 31 December 2013.

During the halcyon days of summer 2013, LMAX’s volume increased to $125 billion per month, an increase which occurred at approximately the same time as the firm’s consideration of expanding into the US market with Mr. Mercer having stated that the company needs “to be in New York within the next 12 to 18 months.”

In terms of this particular report, the corporate results of LMAX are particularly interesting as this is its first annual statement of performance since its management buyout from parent Betfair.

In 2012, the financial year end of the Company was changed to 3l December to make it consistent with the year end of its parent company Hamsard 3297 Limited (“Hamsard”). As a result the comparative period is for the eight months to 3l December 2012 with the current period being for twelve months ending 3l December 2013 (“FY13”).

Several milestones were achieved in FY13 as notional volume reached USD l.ltn (prior period: $243bn). Client funds extended to $70 million, an increase of 71% (prior period.’ $4lm). LMAX’s distribution strategy continued to deliver improved results with enhanced customer traction, which delivered strong volume and revenue growth during the year, from a more diverse customer base and product mix. LMAX turnover increased to £18.1m for the year ended 3l December 2013 (prior period: £3.7 million) driven by growth from institutional clients.

LMAX’s growth in volumes and revenue reduced the loss for the year to £3.9 million (prior period: £15.0 million), In the last quarter of 2013, LMAX recorded operational profìts.

During the next 12 months, the business intends to continue enhancing its market presence by promoting the key messages of speed, price and transparency to a wider audience of customers by focusing on key growth regions, whilst improving the service offering and expanding the products available on the exchange.

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