LMAX Exchange

LMAX Reports 35% Gross Profit in 2018 as Exchange Expands Into APAC

LMAX Exchange Group has reported a record financial performance for the year ended 31st December 2018, including gross revenues of US$50m, up 27% from 2017, and gross profit of US$45m, up 35% from 2017.

The leading independent operator of institutional exchanges for electronic FX trading and cryptocurrencies has reported full-year profitability since 2014 and is currently on a 15% four-year annually compounded growth in Gross Profit, 91% four-year annually compounded growth in Statutory EBITDA, and 126% four-year annually compounded growth in Operating Profit.

David Mercer, CEO of LMAX Exchange
David Mercer, CEO of LMAX Exchange

David Mercer, CEO of LMAX Exchange, commented: “Last year saw our industry swept by consolidation and changes in market structure. Against this background, we emerged as the sole remaining independent exchange for global FX trading. Clients clearly value our independent status and distinctive business model focused on providing consistent, best-in-class service.”

LMAX Exchange execution venues have all printed trading volume record highs, more than US$3 trillion annually in total. The successful year was driven by increased trading from existing clients, growing market traction in the institutional client segment and a stand out performance from Asia Pacific region.

Other LMAX performance metrics include:
Statutory EBITDA of US$18.6m, up 62% from 2017
Operating Profit of US$13.4m, up 135% from 2017
Total trading volume across exchanges in excess US$3 trillion, up 21%
Continued growth of international exchanges
Trading volumes on New York (NY4) up 267% from 2017
Trading volumes on Tokyo (TY3) up 60 % from 2017

“Volumes were up 21% and operating profit grew by 135%, reflecting a growing need we have identified among institutional market participants for order-driven firm liquidity and an increasing focus on transparency, precision, and consistency in execution.”

David Mercer, CEO of LMAX Exchange, continued: “As we progress into 2019, we will be placing increased focus on growing business with our global institutional client segment. Following a number of senior high calibre hires in our distribution teams, notably in EMEA and Asia Pacific, we are perfectly positioned to service these clients by convincing them about the quality of our robust, low-latency, transparent execution .We are particularly pleased about the outstanding contribution from our Asia Pacific business, where we grew revenues by 47%. With clients in 100 different countries and 11 offices worldwide, we remain in expansion mode and have built out our multi-hub offering positions to maximize growth potential.”

The CEO of LMAX expects the trend to continue as the firm carries on its services for the 300-plus funds, banks, asset managers and brokers that make up its global client base. Since its launch, LMAX has invested US$100 million to ensure the primacy of its execution venues, but CEO Mercer pledged to “further invest in our market-leading proprietary technology”.

In 2018, LMAX has consolidated its ownership, bringing 95% of LMAX Exchange Group under management ownership via leveraged buyout in order to ensure independent status as OTC FX execution venues consolidate. The year 2018 also saw LMAX transitioning its MTF and Broker businesses into distinct FCA regulated entities in the context of the introduction of MiFID II requirements.
LMAX expects its cryptocurrency business to thrive exponentially. The firm launched its institutional crypto exchange in May 2018 and partnered with Genesis Markets in July 2018.