Marex Spectron reports record full year 2019 results and strong start to 2020

April 27, 2020

Marex Spectron reports record full year results

  • Record results across all financial metrics
  • Significant successes from new acquisitions and organic initiatives
  • Exceptional start to 2020
  • LONDON, 27 APRIL 2020 – Marex Spectron (the ‘Group’), the global commodities specialist, has today reported record results for the year ended 31 December 2019. Gross revenues were up 43% to $554.9 million (2018: $388.5 million) and net revenues were up 19% to $349.9 million from $294.7 million in 2018. EBITDA was up 36% to $70.5 million, compared with $52.0 million in 2018 and $39.6 million in 2017; EBITDA margin increased to 20.1% (2018:17.6%). Profit before Tax (PBT) grew 248% to $46.6million (2018: $13.4million) and Adjusted Profit before Tax (which excludes one-time items) increased to $53.4million (2018: $45.6million). These results demonstrate the success of the Group’s business model in a year in which it continued to expand through acquisition and ongoing organic growth.

    2019 highlights included:

    The acquisition and successful integration of four bolt-on businesses of varying sizes that materially expanded the Group’s scale and scope of operation and increased regional diversification, with North America now accounting for a third of the Group’s business. These were:

  • Chicago-based Rosenthal Collins Group, a leading regulated agricultural Futures Commission Merchant with over 150 employees.
  • London-based CSC Commodities, a trading firm specialising in market making in energy derivative products including crude oil, residual fuel oil, naphtha, gasoline, natural gas, coal and several dry freight routes and sizes.
  • Dublin-based Energy Broking Ireland, a leading Irish energy and power broker.
  • London-based Marquee Oil Broking, a specialist physical fuel oil broker.
  • Establishing a Central Bank of Ireland regulated entity in Dublin as the European Headquarters to ensure client continuity post Brexit and in June 2019 migrating all European gas and power clients to the new entity.

    Successful expansion of Marex Solutions, the corporate hedging and structured notes business, that saw a 168% increase in net revenue to $18.8 million and has diversified the Group’s earnings and sources of liquidity.

    Endorsement from S&P Global Ratings, reaffirming the BBB long-term and A-2 short-term issuer credit ratings on Marex Financial.

    The Group closed the year with its strongest ever liquidity position of $387million. This was enhanced by an increase in its’ working capital facility to $165 million, as well as further diversifying liquidity capabilities through a new structured notes business, Marex Financial Products.

    Outlook: A record start to 2020

    High levels of volatility are generally good for Marex Spectron’s businesses, and the first quarter earnings (unaudited net revenues of $142.2million and PBT$26.5million) reflect that positive market environment. Net revenues are 41% above the same period last year, with all businesses contributing positively. PBT for the quarter is over 50 % of full year 2019. The recent acquisition of Tangent Trading in March further enhances the Group’s business in sustainable metals and is part of an ongoing growth strategy. The Group has also continued to strengthen its liquidity position since the year-end, putting it in a strong position to handle market disruption from Covid-19.

    Ian Lowitt, Chief Executive Officer of Marex Spectron, commented:

    “This has been yet another record year for our Group. We exceeded our financial targets for 2019, with record results across every financial metric, which was achieved despite the various macroeconomic headwinds. We successfully transformed the scale and scope of the Group and these results, together with the first quarter results from 2020, demonstrate the strength of our diversified global business and the commitment of our people worldwide.

    “Our business is well positioned for current and future markets. We have shown that we can successfully integrate large businesses and manage our costs. Our goal is to continue developing our business organically and look for new growth opportunities to further our global expansion, as we increasingly diversify and strengthen our competitive position across markets, products and regions.

    “Our performance this year has been very encouraging and we remain on track for another record year. This is a clear demonstration of the resilience and diversification of our franchise. Consistent with other firms in our sector, Covid-19 has been a challenge, with 90% of our staff working from home, but this has been navigated successfully. I would like to thank all our clients for their continued loyalty and support and our employees for their dedication and hard work”.

    “Looking ahead, we firmly believe that we can grow our market share and thrive through the inevitable dislocations which will result from this situation. We have a scalable platform for future growth and believe we are exceptionally well-positioned to capitalise on the opportunities ahead and remain very ambitious for the future of our franchise.”

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