Marex Spectron Issues Performance UpdateMay 20, 2014
The company also published its 2013 Annual Report and Accounts which showed a small overall loss for the year on a reported basis driven by the cost of restructuring and rising exchange and clearing fees during a bear market year and low trading volumes in its core commodity markets. EBITDA, which excludes $8.2 million of one-time restructuring costs and depreciation and amortisation charges of $9.3 million, was positive at $11.3 million in 2013.
EBITDA for the first quarter of 2014, a record for Marex Spectron, exceeded the EBITDA generated in all of 2013.
John Wall, CEO of Marex Spectron, said: “Last year was very difficult for everyone operating in the global commodity markets. During 2013 we grew our commission revenue, our client base and our geographic reach and maintained capital and liquidity buffers well in excess of regulatory requirements.
“The changes we made to the firm in 2013 and the investment we have made in our core commodity businesses can be seen in our record performance in the first quarter of 2014.”
Marex Spectron grew total revenues by 3% in 2013. While revenue from its commodity broking units fell 3%, it outperformed competitors’ commodity brokerage operations, which fell 4% at the low end, to 16% in the worst case. Restructuring parts of the firm drove non-recurring costs up but is expected to increase the Group’s profitability by an estimated $10 million per annum from 2014.
Market share in Metals and Agricultural markets grew in 2013, and was maintained in off-exchange Energy markets. Gross commissions increased from $269.8 million in 2012, to $296.6 million in 2013, an increase of 10%, which, in a year of a flat to shrinking commission fee pool, is indicative of impressive share gains.
The cost of trading increased from $84.1 million in 2012 to $103.1 million in 2013 (23%), reflecting rising exchange fees. Market Making revenues were down year-on-year reflecting the impact of lower volatility on our market making activities in Metals and Agricultural products.
Revenue in Marex Spectron’s Financial Futures & Options grew by 12% and the company’s technology services continued to grow strongly
John Wall said: “We have come through difficult market conditions and we are well set to weather further storms.
“We are already seeing the benefits of the changes we have made and are confident we can continue to build on our strengths. 2014 has started strongly and there is good reason to expect the business to perform well, in absolute terms and relative to our peers, through the rest of the year.”
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Notes to editors:
ABOUT MAREX SPECTRON
Marex Spectron is one of the world’s largest privately held brokers of financial instruments in the commodities sector and a leader in facilitating trade in physical energy products.
We are the conduit for clients transacting in raw materials and related derivatives. We do so efficiently, discretely and with confidence, on or off-exchange.
We provide liquidity in commodity markets that are frequently difficult for clients to access or that require specialist knowledge to navigate successfully.
We connect our clients to any of the world’s major commodity exchanges via state of the art networks. We provide a full suite of services to trading companies who need to outsource infrastructure and support operations.
We also broker financial futures and options, foreign exchange, fixed income and equity securities.
Our aim is to provide our clients with a global, integrated service that enables them to trade how they want to trade: by voice, on electronic platforms or through trading floors where possible.
Our clients are predominantly commodity producers and consumers, banks, hedge funds, asset managers, brokers, commodity trading advisors and professional traders.
We are members of the London Metal Exchange (where we are a Ring Dealer), the CME Group exchanges, ICE US, NYSE Liffe, ICE Futures and Eurex.
We are over 600 market professionals, headquartered in London with offices across Europe, North America and Asia.