Marex Spectron posts $29M increase in profit for 2014

May 18, 2015

All three of Marex Spectron’s core brokerage businesses – Agricultural Products, Energy and Metals – grew earnings before interest, depreciation and amortisation (EBITDA) in 2014. The Group’s gross revenue for EBITDA increased 4 per cent to $377.1 million.

John Wall, Chief Executive Officer of Marex Spectron, said: “The competitive and operating environments were very challenging in 2014, which makes the strength of our results all the more pleasing. We saw consolidation across our industry, many clients trimmed their broker lists and, indeed, their own activities as attention focused on falling demand and prices for many commodities.”

“Despite these challenges, we grew revenue across our core businesses, improved on our already robust financial strength and benefited from prudent cost control. We have based our strategy on being the best in our core markets, the premium provider that clients can trust to execute well, advise intelligently and provide the confidence of a well-managed, transparent, balance sheet. That strategy is paying off.”

Headquartered in London, with dominant market shares in European Agricultural Products, off-exchange Energy, and Metals, Marex Spectron is also present and growing rapidly in North America and Asia.

In 2014, profit before tax in Marex Spectron’s Hong Kong business, which is dominated by Metals broking, grew 80% over 2013. The much younger, Energy-focused, Singapore unit was modestly loss-making but grew commission revenue by 17% and cut losses by 11%, continuing its solid growth trajectory of recent years.

In North America, profit before tax increased by 461% over 2013, reflecting strong growth across a range of markets but particularly in Metals and Biofuels.

The Group as a whole maintained a flat cost base in 2014 compared to 2013, reflecting improved efficiency following a lengthy period of restructuring in 2012 and 2013.

John Wall, said: “Brokers exist to facilitate the growth and evolution of markets and, to that extent, change is the one constant in our industry. Nonetheless, the developments in market structure, regulation, legislation and commodity demand and supply dynamics of the past two years have been extraordinary. No broker can hope to build a successfully sustainable business on a model and cost base that has not undergone similarly transformative change.

“Over the past two years, we have successfully completed a series of initiatives designed to exit under-performing businesses, rationalise our property portfolio, increase efficiency in our control and support operations and focus investment spend on areas where our market share and insight could be most effectively leveraged. This has made us one of the most cost-effective firms in our industry while enabling us to maintain capital and liquidity buffers well in advance of what our regulators require and maintain investment in innovative services and technology.”

At the end of 2014, Marex Spectron’s capital was more than twice that of its Pillar 1 requirements.

While Marex Spectron is predominantly a commodities broker, the firm also operates three businesses serving other markets: Financial Futures & Options, fixed income and equity Securities and the ‘ProTrader’ business which provides a suite of services to trading firms who need to outsource infrastructure and support operations.

The Financial Futures & Options business, along with the rest of its sector, had a difficult 2014 marked by low client trading volume. Nonetheless, the unit remained profitable in 2014. The Securities unit returned a positive EBITDA in 2014 following major restructuring in 2013.

The ProTrader business suffered a 40 per cent decline in EBITDA in 2014, largely due to clients struggling in very weak financial futures markets. It has undergone some restructuring and will have a lower cost base in 2015.

John Wall concluded: “Marex Spectron performed very well in 2014, validating our strategy and the immense work we have done to become more efficient and better at meeting client needs. I am pleased to say that the first quarter of 2015 was encouraging and that I have every confidence in our ability to outperform our peers through the rest of the year. These are challenging times for everyone in our markets, our sustainable advantage is our clients place a premium on our expertise and reliability. ”

For further information, please contact:

Richard Lindsay
Head of Corporate Communications
+44 (0)20 7650 4091

About Marex Spectron Group Limited

Marex Spectron is a leading independent global commodities brokerage headquartered in London but with a global network spanning Asia and North America, and dominant market shares in many major Agricultural, Metal and Energy products.

Our mission is to ensure that we offer our clients unequalled access to liquidity in global commodity markets, on-exchange or off-exchange. Our business is integrated, truly global and prudently managed.

We offer electronic and voice broking services, with state of the art networks to facilitate complex trading strategies. We offer insight and know-how, based on decades of experience, a vast market data set and the latest analytic tools.

While commodity markets form the core of our business, we have responded to client demand for broader services and have active, successful, teams broking financial futures and options, and fixed income and equity securities.

We also have a division that provides a full suite of services to trading firms who need to outsource infrastructure, support operations and the management of electronic trading solutions.

We have a broad range of clients including commodity producers and consumers, banks, hedge funds, asset managers, brokers, commodity trading advisors and professional traders.

We are members of the London Metal Exchange (LME; where we are a Ring Dealer), the CME Group exchanges, ICE Group exchanges and many others.

We are regulated in the UK by the FCA, in the US by the NFA and CFTC, in Hong Kong by the SFC, and in Singapore by the MAS.

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