LMAX Exchange announces record high profitability in 2016
London, May 2017 – Today, LMAX Exchange, one of UK’s fastest growing financial technology firms and the leading MTF for FX trading, is pleased to announce record high profitability with reported annual EBITDA of £5.6m in 2016. This marks the company’s strongest financial performance to date and demonstrates its rapidly expanding footprint in the global FX market – particularly remarkable in the face of a difficult period for the spot FX industry, which has seen a volume decline of 19% over the last 3 years.
2016 highlights include
- EBITDA of £5.6m, up 300% year-on-year
- Gross profit of £20.8m, up 33% year-on-year
- Strong growth in the institutional segment, volumes up 52% year-on-year
- Completion of global exchange infrastructure with the addition of a matching engine in New York
- Continued leadership in the campaign to eradicate practices open to market abuse
Five year annually compounded growth results (2012-2016) demonstrate
- Gross profit: 61% annual growth
- Notional volumes: 44% annual growth
- Client funds: 30% annual growth
The above performance has been delivered following a significant investment in technology, geographical expansion and product diversification which created a greater breadth of services and a wider addressable market in 2016:
- The completion of the bilateral clearing project has enhanced the company’s presence in the institutional segment and has led to a 52% increase in volumes from this customer segment, which remains the core growth focus for the firm into 2017;
- The September 2016 launch of the North American matching engine in New York (NY4) was a key strategic geographical move. This new liquidity pool for institutional spot FX trading, enabled North American clients to trade on LMAX Exchange with unique, no ‘last look’ limit order liquidity;
- The continued investment in building market presence in AsiaPac, including growth of the Tokyo-based exchange (launched in 2015), has led to a 55% growth in volumes for the region.
David Mercer, CEO of LMAX Exchange commented,
“2016 was a good year for LMAX Exchange. We were able to build on our technology investments in 2015, continue our strong growth and expand our capabilities to new markets. In addition, we were able to deliver for the institutional marketplace and drive volumes in Asia.
This was all achieved against the backdrop of market uncertainty and volatility that we were well positioned to benefit from. Finally, we continued to champion transparency and fairness in the global FX industry as a fundamental belief of the business.
Looking forward through 2017, we are seeing sustained volume growth and significant institutional uptake in all markets.”
In the broader industry context, LMAX Exchange continued to campaign for the need to rid the market of practices open to abuse, such as ‘last look’ and ‘pre-hedging’, in order to increase transparency and regain customers’ trust following a few scandal ridden years. In addition to the regularly published thought leadership reports and the ongoing dialogue with BIS FXWG and the FEMR Working Group representatives from the Bank of England, FCA and HM Treasury, LMAX Exchange recently became the first organisation to publicly commit to the upcoming Global Code of Conduct.
Looking ahead, LMAX Exchange is aiming to lead the development of the Transaction Cost Analysis (TCA) methodology for foreign exchange. This work will see the company launch a whitepaper in May 2017 proposing a comprehensive, new set of metrics for analysing execution quality and trading costs on firm and ‘last look’ liquidity. Highly anticipated industry research, this white paper is intended to contribute to an industry-wide debate on how to conduct TCA in a way that benefits the customer, provides a fair comparison for liquidity providers and creates genuine transparency: one that enables choice and aids quality decision making.
For further information, please contact:
Tom Nutt T: +44 (0) 7775 686 706 E: [email protected]
About LMAX Exchange
LMAX Exchange Group is a dynamic, visionary and award-winning financial technology company. Recognised as one of the UK’s fastest growing technology firms, LMAX Exchange is leading the transformation of the global FX industry to transparent, fair, precise and consistent execution. Operating one global marketplace for trading FX, metals, indices and commodities, LMAX Exchange delivers open access, transparency and a level playing field to all market participants.
LMAX Exchange Group offers all clients the ability to trade on LMAX Exchange central limit order book, driven by streaming no ‘last look’ limit-order liquidity from top tier banks and non-bank financial institutions. Servicing funds, banks, brokerages, asset managers and proprietary trading firms, LMAX Exchange offers an anonymous, regulated, rules-based trading environment, order execution in strict price/time priority, and access to real-time streaming market and trade data, enabling all market participants to control execution quality and total trading costs.
Offering a comprehensive range of instruments and ultra-low latency execution, LMAX Exchange operates a global FX exchange infrastructure with matching engines in London, New York and Tokyo.
LMAX Exchange - a unique vision for global FX.
Financial technology awards:
2017 Best FX Trading Venue - (ECN/MTF) – Fund Technology and WSL Awards more
2016 Best Trading & Execution Technology – HFM US Technology Awards more
2013 Best Overall Testing Project – The European Software Testing Awards more
2011 Best Trading System – Financial Sector Technology Awards more
FX industry awards:
2018, 2017, 2013 Best Execution Venue – Forex Magnates Awards more
2017, 2016, 2015, 2014, 2013 Best FX Trading Venue - (ECN/MTF) – WSL Awards more
2017, 2016, 2015, 2014, 2013 Best Margin Sector Platform – Profit & Loss Readers' Choice Awards more
2014 Best Infrastructure/Technology Initiative – WSL Institutional Trading Awardsmore
Business growth awards:
2016, 2015 Winner – Deloitte UK Technology Fast 50 more
2016, 2015 Winner – Deloitte EMEA Technology Fast 500 more
2015, 2014, 2013 Fastest Growing Tech Company in the UK – The Sunday Times Tech Track 100 more
LMAX Exchange Group is the holding company of LMAX Limited and LMAX Broker Limited.
LMAX Exchange is a trading name of LMAX Limited, which operates a multilateral trading facility, authorised and regulated by the Financial Conduct Authority (firm reference number 509778) and is a company registered in England and Wales (number 6505809).
LMAX Global is a trading name of LMAX Broker Limited which is authorised and regulated by the Financial Conduct Authority (firm reference number 783200) and is a company registered in England and Wales (number 10819525).