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Associated Press
4 days ago
- Business
- Associated Press
Marex Agrees to Acquire Agrinvest Commodities
LONDON, June 05, 2025 (GLOBE NEWSWIRE) -- Marex Group plc ('Marex' or the 'Group'; NASDAQ: MRX), the diversified global financial services platform, today announces that it has agreed to acquire Agrinvest Commodities, a Brazilian agricultural commodities business. This acquisition will expand Marex's operations in the Americas and add new capabilities and clients to diversify earnings. Agrinvest acts as an agent connecting buyers and sellers in physical agricultural markets including corn and soybeans. It also provides its clients with consulting support to understand their hedging options and commercial strategies within these agricultural markets. Acquiring Agrinvest gives Marex physical commodities capabilities in Brazil, in addition to its existing derivatives operations. With about 1,300 clients and 100 employees, Agrinvest augments Marex's current Brazilian business. Ian Lowitt, CEO of Marex, commented: 'Brazil is a globally important commodity producer and is a country where we have been looking to expand. Agrinvest's partners have built an impressive business, and we see great potential in supporting their future growth across Brazil. This deal will bring new clients to our platform, and we also see opportunities to offer them additional hedging services.' Ram Vittal, CEO of the Americas, Marex, commented: 'We're excited to expand our presence in the Americas with the acquisition of Agrinvest in Brazil, reinforcing our commitment to growth across the region. The addition of Agrinvest strengthens our agricultural business and broadens our capabilities, allowing us to expand in one of the world's most dynamic agriculture markets.' Benedito Joao Gai Neto, CEO of Agrinvest, commented: 'We are thrilled to join the Marex platform, with its global reach, growing client base and range of capabilities. As part of Marex, we will have the support we need to expand our business and the services we can offer our clients in this exciting region, and also in other countries.' About Marex: Marex Group plc (NASDAQ: MRX) is a diversified global financial services platform providing essential liquidity, market access and infrastructure services to clients across energy, commodities and financial markets. The Group provides comprehensive breadth and depth of coverage across four services: Clearing, Agency and Execution, Market Making and Hedging and Investment Solutions. It has a leading franchise in many major metals, energy and agricultural products, with access to 60 exchanges. The Group provides access to the world's major commodity markets, covering a broad range of clients that include some of the largest commodity producers, consumers and traders, banks, hedge funds and asset managers. With more than 40 offices worldwide, the Group has over 2,400 employees across Europe, Asia and the Americas. For more information visit Enquiries please contact: Marex: Nicola Ratchford / Adam Strachan +44 778 654 8889 / +1 914 200 2508 [email protected] / [email protected] FTI Consulting US / UK +1 716 525 7239 / +44 7976870961 [email protected]
Yahoo
16-05-2025
- Business
- Yahoo
Q1 2025 Marex Group PLC Earnings Call
Adam Strachan; Head of Investor Relations; Marex Group PLC Ian Lowitt; Chief Executive Officer, Director; Marex Group PLC Rob Irvin; Group Chief Financial Officer; Marex Group PLC Benjamin Budish; Analyst; Barclays Kyle Voigt; Analyst; KBW Patrick Moley; Analyst; Piper Sandler Alex Leung; Analyst; UBS Operator Good day and thank you for standing by. Welcome to the Marex Q1 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. (Operator Instructions). Please be advised that today's conference is being recorded. I would now like to have a conversation with your first speaker today, Adam Strachan, Head of Investor Relations. Please go ahead. Adam Strachan Good morning everyone, and thanks for joining us today for Marex's first quarter 2025 earnings conference call. Speaking today are Ian Lowitt, Group Chief Executive Officer, and Rob Irvin Group Chief Financial Officer. After Ian and Rob have made their formal remarks, we will open the call to questions. Before we begin, I would like to remind everyone that certain matters discussed in today's conference call are forward-looking statements relating to future events, management plans, and objectives for the business, and the future financial performance of the company that are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are referred to in Marex's press release issued today. The forward-looking statements made today are as of the date of this call, and Marex does not undertake any obligation to update these forward-looking statements. Finally, the speakers may refer to certain adjusted or non IFRS financial measures on this call. A reconciliation schedule of the non IFRS financial measures to the most directly comparable IFRS measures is also available in the press release issued today. A copy of today's press release and investor presentation may be obtained by visiting the investor relations page of the website at I'll now hand the call over to Ian. Ian Lowitt Good morning and welcome to our first quarter 2025 earnings call. This was a strong first quarter performance with adjusted profit before tax of $96 million at the top end of the preliminary range we published at our Invest today and subsequently with our F1 filing. We've had a very busy few weeks since the end of the quarter. We hosted our inaugural Investor day on April 2nd, had a highly successful equity offering on April 17th, and a well-received debt offering on May 1st. This has provided us with many opportunities to engage with our investors, both existing and many new ones. We are very appreciative of the engagement we have experienced and would particularly like to thank our major long-term investors, many of whom came to our Invested today in New York for their ongoing support. Based on our interactions with investors, it does feel as though there is increasing recognition, understanding and acceptance of the power of the Marist platform to deliver strong and reliable results through the cycle. So with that, let's turn to the performance highlights on slide 4. We delivered a strong first quarter driven by robust client activity in what was a favorable operating environment for our business. The exchange volumes in Q1 were up 15% year on year and up 12% versus the fourth quarter. And there was a Goldilocks level of volatility across many asset classes which we were able to monetize. Adjusted PBT was up 42% with strong revenue growth, as Rob will discuss later, in all of our business segments. Agency execution was a particular standout with continued growth in prime services. And our energy business also performs strongly. At the start of April, there was a period which included some very high volume days, typically 2 to 3 times the average level for the first quarter. We were able to process these heightened volumes successfully on our platform, confirming the operational resilience of the firm and the scalability of our platform. We also managed our risk well, remaining in close dialogue with our clients and added materially to our liquidity position, maintaining record levels of surplus. This liquidity surplus has further increased with a $500 million senior notes issuance that we executed in early May as we continue to extend and diversify our funding sources. Although there is a funding cost which impacts net interest income, this is very valuable insurance from our perspective in this type of environment, and this is a trade-off that we are willing to make to mitigate our risk. At the end of March, we completed the honor acquisition and expect Hamilton Court to also close later this quarter. We successfully executed on our 2nd equity follow on transaction since our IPO, and we're extremely pleased with the response, which reflected very strong support from the market. And we've increased our dividend to $0.15 per share for the first quarter of 2025 from $0.14 per quarter in 2024 post our IPO. On page 5, we've laid out the key metrics that we use to assess our performance, growth, margins and returns, productivity, and quality of earnings. Revenues grew 28% to $467 million while our margin increased to 21%, delivering adjusted PBT of $96 million up 42%. Reported return on equity was 29%, up 6% points year over year. Our sharp ratio of monthly adjusted profits was 5, reflecting the quality and resilience of our earnings and the relatively tight distribution of daily profitability. We also track our performance versus overall exchange volumes, which are publicly available. We recognize this relationship is directional rather than determinative, as volumes are only one driver of revenues, albeit an important one, and it does provide a very useful lens on our business. Volumes on exchange don't capture OTC or other off exchange activity such as Prime services, which are included in our revenues and explain, for example, the outperformance in our agency and execution segment in securities this quarter. While we're attentive to the quarterly numbers, we typically focus on the longer term time period which has less noise in it. On this basis, it's apparent that we continue to gain share and are growing faster than the market, which itself is growing at a healthy rate, as you can see on the next slide. Slide 7, shows the growth in exchange volumes in our markets since 2021. This growth accelerated in Q1, reflecting the strong operating environment this quarter. As I said at the investor day, this growth is above what we would have expected at IPO and is underpinned by secular trends. These secular trends include growing demand for listed derivatives due to increased receptivity to this as a hedging tool globally. There is also increasing demand from producers and consumers of energy and commodities to hedge out their exposures on a recurring basis. And the ongoing expansion of the financial product market is presenting us with significant opportunity to grow and diversify our firm. We're also in a world of macroeconomic uncertainty and geopolitical unpredictability that you see playing out every day. This is an attractive market backdrop for us with high exchange volumes, not just in individual asset classes but across most asset classes simultaneously. In addition to exchange volumes, another important driver of our performance is volatility. What's interesting about the data is that it shows volatility has been declining somewhat over the last 3 years, during which time period we have grown our profits materially. We have set up the firm to generate reliable earnings growth across the cycle through servicing client flow and gaining share, while also being able to capture upside in periods of unusual volatility. These volatility spikes tend to be quite short dated, often only a few weeks before reverting to more normalized levels. Although we might see a 5% to 10% earnings benefit from higher volatility in a particular quarter, as we did, for example, in Q2 last year, over a four-year period, they are less visible. The key point here is we are not reliant on these elevated periods of volatility to deliver profit growth, and we are proud of our track record of delivering sequential growth through a variety of market environments. A quick word on our recent equity and debt issuance activity before I hand over to Rob. The secondary offering in mid-April was a standout success at over 8 times over subscription, notwithstanding the tough market backdrop at the time. To be able to accomplish this in such a volatile market environment with the VIX in the mid-30s is something we're extremely proud of. We brought in many new investors and saw continued participation from existing shareholders, further improving the quality of our share register and demonstrating our increased credibility as a public company. Our free flow has increased from 38% at IPO to nearly 70% in a year. Our average daily trading volume has also increased from less than $10 million in the six months post IPO. To mid-teens between the 1st and 2nd follow-on, and it's now at over $40 million. Support from the market is also reflected in our $500 million dollar US dollar issuance of senior notes that we executed intraday on May 1st. This demonstrated further the market's comfort with Marex as an issuer and our ability to support our growth as a public company. With that, I'll hand over to Rob to take you through the financials in more detail. Rob Irvin Thanks, Ian, and good morning everyone. As Ian said, we had another strong quarter in line with our published preliminary range. Q1 revenue grew 28% to $467 million with strong growth across all business segments. Total costs increased 26% to $365 million. Front office costs were up 23%, predominantly reflecting higher compensation costs on strong revenue performance across the group. Control and support costs were up 33%, primarily driven by investments in technology to support automation and business growth. We also continue to make investments in our finance, risk, and compliance functions to support our controlled growth and development as a public company. This included specific investments relating to recent acquisitions and our compliance with Sarbanes-Oxley. Adjusted profit before tax grew 42% to $96 million. Well, margins expanded 200 basis points to 21%, reflecting margin improvement in agency and execution. Non-operating adjustments were a gain of $1.7 million this quarter due to a bargain purchase gain of $3.4 million on Darton Group Limited. Adjusted return on equity rose to 30%. Well, adjusted diluted EPS was $0.91 per share, up 32% year over year. Now looking at our first quarter performance by business compared to Q1 2024. Clearing revenue grew 18% to $119 million driven by growth in net interest income as higher average balances more than offset lower average Fed fund rates. Net commission income was $1.7 million lower as positive performance in energy and metals was offset by lower client activity in agriculturals, which experienced higher volatility in Q1 2024 compared to this quarter. Agency and execution revenue grew 42% to $240 million driven by growth in all asset classes. Securities revenue grew 59% to $151 million. The most significant contribution came from the continued build out of our prime services offering, including growth and security-based swaps. Energy revenue grew 20% to $88 million reflecting the combination of record volumes, strong demand for our environmentals offering, and the benefit of acquisitions. Adjusted profit before tax more than doubled in this segment as margins improved from 13% to 24%. This was driven by the benefit from restructuring as well as growth in higher margin activity, particularly in prime services. Market making revenue grew 27% to $53 million with growth in all asset classes. Security revenues doubled, more metals revenue growth was more muted at 6% due to the uncertainty arising from the potential implementation of global tariffs on base metals. Average daily bar or value at risk remain low at $3.4 million as we continue to manage our market risk well with 92% of trading days and 100% of weeks positive in the quarter. Solutions revenue grew 9% to $45 million against a very tough first quarter comparative as the business continued to benefit from the expanding sales team and onboarding of new clients. Financial products grew 41% to $31 million driven by structured notes balance growth. Hedging solutions decreased 27% to $14 million also reflecting higher volatility in parts of the ag market in Q1 2024. Average balances in the first quarter increased to $17.1 billion up from $11.3 billion a year ago, driven by growth in plant balances and our increased liquidity position. As Ian said, we intentionally hold high levels of liquidity to support our businesses and clients through volatile markets, even if this costs us more from a funding perspective, as was the case this quarter. Net interest income was $53.4 million compared to $35.6 million in Q1 last year, reflecting the significant step up in average balances, including growth in prime services, despite a lower average Fed fund rate. NII reduced by $9 million versus the fourth quarter, driven by several items. First, higher interest expense reflecting the full quarter's impact of the $600 million US dollar notes issued in late October 2024 and increased structured notes issuance. This meant our liquidity position was very strong at the start of April. Second, the impact of average Fed funds decreasing by 35 basis points, and third, the repricing of fixed-term investments at lower rates. These factors were partially offset by $1.6 billion dollar growth in average balances. The Fed funds for curb is currently implying 2 to 3 rate cuts by year end, and as before, we have given you our illustrative rate sensitivity. This indicates that 100 basis points decrease in rates across a full year would reduce adjusted profit before tax by around $20 million. This is of course assuming a static balance sheet and ignoring any future growth or actions we might take. We have a rolling hedge program in place which causes a modest drag to NRI today and offers us protection if rates were to fall below the current Fed funds curve. Turning now to our balance sheet and strong capital and liquidity position on the next two slides before I hand back to Ian to conclude. As a reminder on this slide, you can see that 80% of our balance sheet consists of high quality liquid assets which support client activity. Once we net off assets and liabilities by client activity, we are left in the corporate balance sheet that carries corporate cash and other assets against group liabilities, including our structured notes portfolio and senior note issuance. Total assets remain broadly stable at $24.4 billion as at the end of March, as did our residual assets of $5.1 billion. We manage our capital and liquidity risk very prudently, as reflected in the headroom that we maintain above minimum requirements to ensure we're well positioned in periods of market stress. During the first quarter in particular, we held very high levels of liquidity, which, as I mentioned before, had an impact on NII. At the end of Q1 2025, total funding was $4.3 billion up from $3.8 billion at year end, with $1.2 billion of surplus to support our day to day operations. Our structured note program remains a core source of funding for us, and we've further extended our funding maturity profile with our $500 million US dollars senior debt issuance earlier this month. Taking this into account, our liquidity surplus over our regulatory minimum as of last week stood at $1.6 billion. This also supports our investment grade credit ratings from S&P and Fitch. Last month, Fitch updated its rating outlook for Marex from stable to positive to reflect our strong earnings and diversification of our franchise. Our strong capital generation meant we were able to announce an increased quarterly dividend of $0.15 per share for the first quarter of 2025 payable to shareholders on the 10th of June. And now I'll hand back to Ian. Ian Lowitt Thanks, Rob. So in conclusion, this was a strong quarter. It was an above normal operating environment with higher levels of activity and volumes that we were able to convert into revenue and profit growth. The second quarter has started well. We saw higher volumes in early April, which tested the operational resilience of our infrastructure before they reverted to more normalized levels in the second half of the month. As far as the rest of the year is concerned, we see a lot of momentum and are excited about our future, but remain sanguine about the risks and how the environment might change. We've laid on a lot of extra liquidity to protect the firm at a cost obviously, but that is one that we believe is well worth paying. Rates are expected to continue to fall, which will impact net interest income. But as we saw in the first quarter, we're able to deliver very strong results notwithstanding this impact. We continue to evaluate many M&A opportunities and are maintaining our strict discipline as you would expect us to. We have passed on select deals where we felt we were unable or unlikely to meet our return hurdles, but are confident that there will be many transactions which will in fact meet our return targets. Through a combination of organic and inorganic initiatives, we expect to be able to deliver continued structural growth, which offsets macro headwinds. We've had a great start to the year, are aware of the challenges, and are very confident about the position of the franchise and our opportunities set. With that, I'll ask the operator to open the call for your questions. Operator (Operator Instructions). Benjamin Budish from Barclays. Benjamin Budish Hi, good morning and thank you for taking my questions. Ian, I was wondering if perhaps to start we could come back to the prime business, just trying to think through. I mean, can you unpack in a little bit more detail what is going on there that's changed? Just kind of looking at the last, 56 quarters of revenues, it looks like there's been a step function higher in both. The last couple of quarters. So just trying to think through, like, are we at a new run rate? Is there more upside? Like how much is sort of environmentally, kind of benefiting you right now? And it looks like your profit margin in the agency and execution segment also stepped up quite a bit. Is that something we should see more of, or are we kind of at the right level in like the low to mid-20s? Ian Lowitt Well, thanks, Ben. I'll give you sort of my perspective and then, Paolo runs the businesses with us and I think he can sort of add additional sort of points there. I mean, I think with regard to sort of prime services, there are a couple of things that are sort of worth noting. One is, as we described previously, we always felt that this was going to be a hugely important part of the sort of strategic plan of the firm and that, it represented, a really important, level of growth for us. I think as we also shared, it was a little bit slower than we expected. In the sense that, integrating it and making it part of Marras and reversing, sort of some of the sort of issues that had arisen while it was sort of for sale, as part of TD, just took a little bit longer than we thought. And so it was sort of a bit slower in 2024 than we would have expected, but we've definitely seen, a really nice pick up in that, in the fourth quarter, and that's extended, to the first quarter. In terms of, the expectation with regard to, the run rate, I think there was a certain amount of unmet demand which we, have now captured, and I think that that has elevated the level. I don't think that it represents a peak, but I do think that, the growth rate will probably slow from, what we've experienced over the last two quarters, but I certainly have an expectation that over the long term this will, continue to represent, a really important opportunity for us. I would say similarly with regard to securities. The agency and execution segment which you asked about, we have been sort of flagging for a while that, we did believe that it was a real opportunity, to raise margins in that segment, as a result of the restructuring of an integration of sort of the acquisitions that we've done in that in that place, that space, I think Paolo's going to be sort of too modest to sort of claim all the credit there, but he really does deserve and the team, a lot of credit for the work that they've done, to improve the margins and the profitability of, that particular business. And again, I think that there's been a Left which it's not going to maintain at the same pace, but I don't believe we're absolutely at sort of the limit, but the amount of margin expansion we would expect there will be less than the expansion we've seen today. Do you want to, yeah. Rob Irvin I mean, thanks, Ben. I need to add a couple of points, on the first question around sort of prime brokerage as Ian said, it took some time. To sort of reverse the sort of negative momentum, but we have consciously added product capability and you know that takes a little bit of time and I think that you know some important extensions to products, particularly some of the synthetic offerings that we now have really only came online in late in the 3rd quarter and into the 4th quarter, and that sort of allowed us to increase the volume of activity across, very, a very large number of clients, it's, It now feels as though that's quite stable. I think that it will grow from here, but at a much more modest rate, so somewhere in the sort of high single digits, maybe sort of low double digits, as opposed to, the very sort of rapid growth that we saw between the 2nd, between the 3rd quarter, the 4th quarter, and into the 1st quarter. And then as we sort of we talked about consistently, our margin target for agency and execution was in the, mid-20s, and we didn't really expect to get there as quickly as we have, but we always expected that we would, be able to get there through some combination of. Capabilities and restructuring some of our businesses. So I think you know we're close to our target levels and we might see some improvement. We certainly hope to have some improvement, but we're not going to see these sort of large percentage increases again it will be much more modest. Benjamin Budish Right, all very helpful. Maybe just a quick follow up on Arno, which closed at the end of March. I'm assuming there was very little contribution, if any, in the quarter. So any just sort of modeling help you could provide, where do the revenues show up? What are the sort of what's the P&L profile look like? And in terms of kind of cross sell in the Middle East, what's sort of the timeline for when you think you can start to execute on some of those opportunities? Thank you. Ian Lowitt So with regard to ANA, it closed absolutely at the end of the quarter, so you've seen almost no contribution in the quarter from ANA. I think that, it's performed, in April, at the levels that, we'd anticipated. So, we've seen some of those sort of day one synergies we anticipated sort of coming through and it's certainly performing, consistently with all of those expectations. You know what has been heartening with regard to that is that we have now had, a couple of the sort of marquee accounts, in Abu Dhabi reach out to become clients of the firm which, previously we'd been in discussions with them, but not having in Abu Dhabi, entity had prevented us from being able to on board those, so it's still very early days with regard to, the cross sale and the addition of new clients because of the Abu Dhabi presence, but certainly, for the 1st month it's going extremely well. Rob, do you want to talk about where it's going to turn up? Yeah. Rob Irvin So it'll turn up in our clearing segment then going forward. Ian Lowitt All right. Thank you very much. Rob Irvin Thanks Ben. Operator Kyle Voigt from KBW. Kyle Voigt Hey, good morning, everyone. Maybe if I just start on the clearing commissions, I hear your point about ag volatility kind of pulling back a bit on a year to year basis, but even so at CME we saw over 20% growth in ag volumes in I think even you disclosed 27% growth in in total cleared futures volumes in the quarter so I was just wondering if you could provide a bit more color on the divergence between your cleared volume growth and the commission revenue growth. Was there anything to note from a pricing perspective that you're. In the quarter whether that's competition related or product mix, and then if you can just provide a bit more color on what we're seeing in the market on the ag side versus what you're seeing and what you're telling us in terms of your ags business on the clearing front, I'm seeing product mix related as well. Ian Lowitt Yeah, I mean there are a number of things you're asking about, I think around a. You'll recall that the first quarter of last year was a sort of unusually sort of positive environment, particularly around cocoa, but also with a bunch of, the other, sort of agricultural products. So I think that, a big That that that was sort of, genuinely, an unusual environment that I think we were able to do particularly well with. What we're seeing, at the moment is not, sort of pricing pressure or anything of that kind, we are seeing, as we saw in metals, some amount of people sitting on the sidelines, around, some of the agricultural products, as well as, sort of some of the metal products where people are just sort of unsure of how the tariffs are going to play out. It's actually been evident, in market making, in the agricultural products where, the open interest has been defining some of those products. So, broadly, the reason that you want to have a diversified business is because there will be periods where, individual asset classes perform well and other asset classes are. Seeing less activity and you know that's the power of, sort of broadening out. So I think that's That that's really the story as I see it and if there's something you want to add on. So. Rob Irvin The one thing I would say that within the press release, the contracts cleared is the training 12 months, if not the quarter only. So if you actually look in on the slides, slide 6, you'll see that our volumes are up 17%, which is very much in line with our revenues. Kyle Voigt Understood. Thank you for clarifying. Just a follow up on the 500 million notes issuance in May. Do you feel comfortable with where you're at now from a funding perspective as we think about the remainder of this year and how should we think about the need for additional funding as we're modeling out into 2026? Ian Lowitt Yeah, look, I think that I think we feel very comfortable with sort of our liquidity position as Rob was indicating, I think that, when you're in these periods of heightened uncertainty, and this week, may feel like it's all, sort of dampening down and everything's fine. I mean that's not in the way it's felt at various points in the course of, sort of April, and I suspect there will be, other weeks where it'll feel. Sort of less benign. So given that as a basic backdrop, it seemed to us that it's sensible to increase the amount of liquidity you hold, we were, as you'll be aware, able to issue under, our F1 because we had. Statutory accounts, information and that had not yet gone stale and so we were able to sort of issue in a format that you know is typically the one that the market is looking for and that was, a driver of the timing and why we wanted to do it, in early May. But when you have an opportunity, to raise liquidity in a business like ours, it just seems sensible to do, and it does provide us with sort of two things. One is sort of insurance in the event that, the markets, sort of behave in a much more volatile way, and we have to support our clients with additional liquidity, particularly around clearing. But what it also does is it supports, the ongoing growth of the franchise and our ability to add clients and to continue to support them. So whether it's on defense because, the world is just a sort of more volatile place and we need more liquidity to support the existing clearing or it turns out to be, offense where it gives us an ability to add new clients or increase the amount of business we do with clients. We feel that that added liquidity is. It's very valuable. We don't currently have plans to sort of issue again, but, I don't want to say definitively that we won't because if you have opportunities to grow the firm and add liquidity, I think you typically do take that. Thank you. Operator Patrick Moley from Piper Sandler. Patrick Moley Good morning. I have a question on client clearing balances. You've now grown those average balances by over 10% sequentially in each of the last two quarters. Can you speak to, what drove the growth there in the first quarter and then from a modeling perspective, can you give us an idea of maybe where those balances ended the quarter and how they've trended in the 2nd quarter, given some of the volatility we've seen and how that might have impacted it. Rob Irvin Yeah, so I'll and then why don't you add. So the total balances that we disclose is made up of three things. First of all, it includes health cash. Secondly, it would include clearing balances, and thirdly, it would include balances related with our prime services business. What we saw in the first quarter is obviously, as you saw, there has been an increase in the house liquidity, but we also did see some reasonable growth within clearing and within our prime business. In terms of the 2nd quarter, balances have held up well in April. Obviously it's still very early days. We're only 6 weeks into the quarter, but so far balances are holding up and as we've shown here, we do have experience of growing our franchise, growing our customer balances, and we would expect that to continue throughout the rest of this year. Ian Lowitt Yeah, I mean, I think the thing I'd add is, you, we do have a very sort of robust pipeline of clients that we're sort of bringing on, to be clearing clients of the firm, so. I think we've discussed with you, that tends to have quite a long lead time, you need to do a lot of work to get, clients integrated, onto your platform and, once somebody's a clearing client, it's a very sticky relationship, but it does involve, a lot of work to. To get them onto the platform. And the relevant point here is it means that we actually do have quite good visibility onto, new clients coming onto the platform, and that remains, extremely robust and consistent with, historic trend. I think that, you never know how much activity your existing clients are going to do with you, not because it's sort of going anywhere else, but it's just because you don't quite know what the market opportunity is going to be for them. But again, we have no reason to believe that, that's not going to continue at least the current levels, and certainly, into April we've seen, some increases. So both of the drivers of that, seem to be consistent with history. Patrick Moley Okay great and then just to a follow up on M&A, an update on just on the appetite, overall appetite, what conversations have been like with potential targets, and it's been a few months now since you've announced the deal, just wondering how we should think about M&A throughout the rest of the year. Ian Lowitt Yeah, I think that we continue to be very active looking at, potential acquisitions. We're in conversation with, a number of potential acquisitions, as we indicated in the in the commentary, we also are very disciplined and if we can't, sort of generate our target of 20% or we at the end of, the 1st year, then. Something has to be sort of stupid, super strategic for us to sort of proceed with it. And so, I think what you're seeing is the impact of our discipline, but it's not really slowing down, and it's not a case that our appetite has declined. If anything, I think it's probably gone up for acquisitions, and I would also say that, we're pretty excited about, the state of things, that we're looking at, but, one thing that It is important to us and you know we believe important to our investors is that we remain disciplined. I know what you're doing yeah I. Adam Strachan Mean just to say that I mean by their nature, the sort of timing of signing and closing is, not going to be completely smooth and you're not, we would never expect to have a sort of an announcement every quarter, even if over the course of. A year we would hope to have 4 or 5 acquisitions. I know we, we've not, announced anything. It doesn't mean that we've not been working on, quite a few opportunities, and I would hope that we'll be at the point where we can have some, agreed transactions in the next, in the next few weeks or months. Patrick Moley Okay, I appreciate the color that's it for me. Operator (Operator Instructions) Alex Leung from UBS. Please go ahead. Alex Leung Yes, hey, good morning, everyone. I wanted to ask about the environment so far this quarter. This is a topic that's been coming up obviously on some of the other calls this quarter, but it's really this question of what has happened to client health, etc. So obviously a lot of good volatility. And good for you, but also there's always the worry that things turn bad, and it sounds like your business has held up pretty well, but just wondering if there's anything underneath that you can point to where, there were certain client segments with outsized losses or anything that we wake up in a in a month or two and see, hey, something, there was something that that that could hurt us in the future or do you think everything was pretty normal. Ian Lowitt Yeah I mean I was extremely pleased with, how the recent bout of volatility was sort of absorbed within our particular client set as I sort of reflect on why that is, I think that although we had quite a lot of volatility, what you didn't have was very substantial increase in prices in specific commodity, which is what you've seen, for example, after the Ukraine invasion. Or, in some of the metals markets, and it's those marketplaces where you have very sizable. Movements in, the price of a commodity typically up that creates liquidity pressure, for our particular clients because they own the physical is worth more, but they're hedging it with a financial instrument and the amount of margin they have to post on the financial instrument goes up and that creates, some amount of liquidity pressure for them. And interestingly, this bout of sort of volatility didn't have that so we had an experience of almost no missed margin calls, or late margin calls. And so, It was, it was sort of unusual in the sense that there was a lot of, sort of volatility, but the clients all appeared to be well able to meet whatever sort of the requirements were. I mean, I do share your question of, where are the losses, do they just sort of sit on retail balance sheets or are they actually, going to get manifested in some financial institution? I mean, all I can say is that we're not seeing it in any of our clients at all, and that the performance of the clients set has been sort of terrific. I mean, we have hardly, used margin multipliers at all. I mean, there was sort of one client set that, we weren't that familiar with and we added some margin multipliers for a couple of weeks and then took them all. So there's really been, Surprisingly little sort of client stress that has manifested itself, through our franchise. So, we're pleased to see that, and, long may it continue. Alex Leung Alright, very good. And then just quick follow up on the clearing segment. I heard the answer obviously earlier on a year to year basis, but even on a quarter of a quarter basis, the business. On a commission site seems to have lagged kind of some of the expectations we had given what's going on in the market, but maybe related to that, I, if my numbers are right, I think the front office headcount was down as well and maybe even down the last couple of quarters. So just wondering if there are there any teams that have left or are you deemphasizing? Certain markets just I thought you were in growth mode, so just surprised to see that the front office personnel number came down. Thank you. So. Rob Irvin There's been a little bit of remapping of headcount, particularly in our a business which straddles both clearing and market making. So I think that's what you're seeing, Alex. Yeah. Ian Lowitt I mean what I can say is there's no change in our outlook with regard to the opportunity in clearing or our are interested in investing in it and there's been no loss of sort of teams or producers, over this period. So, and I think what you're just seeing is the, there's some unusual numbers in the, underlying the overall number when you sort of dig down, a level inevitably in any opposite type business. But the overall business is performing extremely well, it's margins are extremely strong, it's level of growth is one that we're very pleased with and one which we continue to invest in and have, high confidence we'll be able to continue to grow. It has a great pipeline. We're, again seeing sort of top clients looking to come onto the. Onto the platform and so in terms of all the real things that sort of, drive the health of your franchise, all of those, are showing a very healthy franchise that is, continuing to grow and gain share. Alex Leung All right, very good. Thanks. Ian Lowitt Thanks, Alex. Operator Thank you. There are currently no further questions, I will have the call back for closing remarks. Ian Lowitt Well, thanks everybody for joining us. As I said, it was, a strong quarter. We've had a strong start to, our second quarter. We're very pleased with the reaction to our equity offering and our debt offering. We're very pleased with, where the franchise is, how it's performing, the ability that we have to convert the capabilities and clients that we acquire like the cow and acquisition and show how much more profitable that can become as part of the Marex platform. And so, we are extremely confident, over the long term and very pleased with what we've accomplished, year-to-date, which has been very strong start. So thank you for your questions and you know we look forward to updating you with the half year. Operator Thank you. This concludes today's conference call. Thanks for participating. You may now disconnect. 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Associated Press
02-04-2025
- Business
- Associated Press
Marex Group plc provides preliminary Q1 results range and hosts Investor Day in New York
NEW YORK, April 02, 2025 (GLOBE NEWSWIRE) -- Marex Group plc (Nasdaq: MRX) ('Marex'), the diversified global financial services platform, provides a Q1 trading update at its Investor Day, being held today at the Nasdaq Marketsite in New York City. Marex reports a strong start to the year with positive momentum and supportive market conditions continuing through the first quarter of 2025. Client activity has remained strong across the platform with high levels of exchange volumes driven by volatility. Agency and Execution has benefited from strong performance in the Prime Services business and continued progress in the Energy business. As a result, first quarter 2025 revenues are expected to be in a range of $449.3 to $464.3 million (Q1 2024: $365.8 million) and Adjusted Profit Before Tax2 in a range of $92.3 to $97.3 million (Q1 2024: $67.7 million). Ian Lowitt, CEO, stated: 'Very robust levels of client activity across our businesses and positive market conditions have continued into 2025 and led to a strong performance in the first quarter of the year, building on our performance in 2024. These benefits more than outweighed the impact of lower net interest income partly arising from the interest rate environment, compared to the fourth quarter of 2024. This demonstrates the successful execution of our strategy to diversify our business and deliver sustainable growth through a variety of market conditions by expanding our geographic footprint and product capabilities, increasing our relevance to a growing client base.' Preliminary Q1 2025 results range We have not yet completed our closing procedures for the three months ended March 31, 2025. The table below are certain estimated preliminary unaudited financial results for the three months ended March 31, 2025: 3 Months ended March 31, 20251 3 Months ended March 31, 2024 Unaudited ($m) Estimated Low Estimated High Actuals Revenue 449.3 464.3 365.8 Reported Profit Before Tax 94.4 102.1 58.9 Tax 24.5 26.5 15.3 Reported Profit After Tax 69.9 75.6 43.6 Adjusted Profit Before Tax2 92.3 97.3 67.7 Profit After Tax Margin 16% 16% 12% Adjusted Profit Before Tax Margin2 21% 21% 19% Basic Earnings per Share ($)3 0.94 1.02 0.60 Diluted Earnings per Share ($)3 0.88 0.96 0.56 Adjusted Basic Earnings per Share ($)2,3 0.94 0.99 0.74 Adjusted Diluted Earnings per Share ($)2,3 0.88 0.93 0.69 Figures reflect certain estimated preliminary unaudited financial results for the three months ended March 31, 2025. Estimates represent results that are preliminary and subject to change. Actual results will not be finalized until after we complete our normal quarter-end accounting procedures, including the execution of our internal control over financial reporting. These estimates reflect our management's best estimate of the impact of events during this quarter. These are non-IFRS financial measures. See Appendix 1 'Non-IFRS Financial Measures and Key Performance Indicators' for additional information and for a reconciliation of each such IFRS measure to its most directly comparable non-IFRS measure. Weighted average number of shares have been restated as applicable for the Group's reverse share split (refer to Appendix 1 for further detail). Investor Day Marex is hosting an Investor Day today, April 2, 2025 starting at 9:30am E.T. The event will feature presentations from Marex's business heads, to provide a greater understanding of Marex's operations and growth strategy, as well as a question and answer session with senior leadership including Ian Lowitt, CEO, Rob Irvin, CFO and Paolo Tonucci, Chief Strategist and CEO Capital Markets. An audio livestream of the event will be available under the 'events and presentations' section on The webcast will also be available for replay, after the completion of the event. About Marex Group: Marex Group plc (NASDAQ: MRX) is a diversified global financial services platform providing essential liquidity, market access and infrastructure services to clients across energy, commodities and financial markets. The Group provides comprehensive breadth and depth of coverage across four core services: Clearing, Agency and Execution, Market Making and Hedging and Investment Solutions. It has a leading franchise in many major metals, energy and agricultural products, with access to 60 exchanges. The Group provides access to the world's major commodity markets, covering a broad range of clients that include some of the largest commodity producers, consumers and traders, banks, hedge funds and asset managers. Headquartered in London with more than 40 offices worldwide, the Group has over 2,300 employees across Europe, Asia and the Americas. For more information visit Enquiries please contact: Marex Investors - Robert Coates +44 7880 486 329 / [email protected] Media - Nicola Ratchford, Marex / FTI Consulting US / UK Forward Looking Statements This press release contains forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including expected outlook regarding Q1 2025 financial results. In some cases, these forward-looking statements can be identified by words or phrases such as 'may,' 'will,' 'expect,' 'anticipate,' 'aim,' 'estimate,' 'intend,' 'plan,' 'believe,' 'potential,' 'continue,' 'is/are likely to' or other similar expressions. These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation: subdued commodity market activity or pricing levels; the effects of geopolitical events, terrorism and wars, such as the effect of Russia's military action in Ukraine or the on-going conflicts in the Middle East, on market volatility, global macroeconomic conditions and commodity prices; changes in interest rate levels; the risk of our clients and their related financial institutions defaulting on their obligations to us; regulatory, reputational and financial risks as a result of our international operations; software or systems failure, loss or disruption of data or data security failures; an inability to adequately hedge our positions and limitations on our ability to modify contracts and the contractual protections that may be available to us in OTC derivatives transactions; market volatility, reputational risk and regulatory uncertainty related to commodity markets, equities, fixed income, foreign exchange; the impact of climate change and the transition to a lower carbon economy on supply chains and the size of the market for certain of our energy products; the impact of changes in judgments, estimates and assumptions made by management in the application of our accounting policies on our reported financial condition and results of operations; lack of sufficient financial liquidity; if we fail to comply with applicable law and regulation, we may be subject to enforcement or other action, forced to cease providing certain services or obliged to change the scope or nature of our operations; significant costs, including adverse impacts on our business, financial condition and results of operations, and expenses associated with compliance with relevant regulations; and if we fail to remediate the material weaknesses we identified in our internal control over financial reporting or prevent material weaknesses in the future, the accuracy and timing of our financial statements may be impacted, which could result in material misstatements in our financial statements or failure to meet our reporting obligations and subject us to potential delisting, regulatory investments or civil or criminal sanctions, and other risks discussed under the caption 'Risk Factors' in our Annual Report on Form 20-F for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the 'SEC') and our other reports filed with the SEC. The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. In addition, statements that 'we believe' and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this press release, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. Appendix 1 Non-IFRS Financial Measures and Key Performance Indicators In addition to our results determined in accordance with IFRS Accounting Standards (IFRS), we believe the following non-IFRS measures provide useful information both to management and investors in measuring our financial performance for the reasons outlined below. These measures may not be comparable to similarly titled measures presented by other companies, and they should not be construed as an alternative to other financial measures determined in accordance with IFRS. The Group changed the labelling of its non-IFRS measures during 2024 to simplify the naming to better align to the equivalent IFRS reported metric for better understanding and communication and enhance transparency and comparability. Adjusted Profit Before Tax (formerly labelled Adjusted Operating Profit) We define Adjusted Profit Before Tax as profit after tax adjusted for (i) taxation charge (ii) acquisition costs, (iii) bargain purchase gains, (iv) owner fees, (v) amortisation of acquired brands and customer lists, (vi) activities in relation to shareholders, and (vii) IPO preparation costs. Items (i) to (vii) are referred to as 'Adjusting Items.' Adjusted Profit Before Tax is an important measure used by our management to evaluate and understand our underlying operations and business trends, forecast future results and determine future capital investment allocations. Adjusted Profit Before Tax is the measure used by our executive board to assess the financial performance of our business in relation to our trading performance and hence it is our segments performance measure presented under IFRS Accounting Standards. Adjusted Profit Before Tax is also presented on a consolidated basis because our management believes it is important to consider our profitability on a basis consistent with that of our operating segments. When presented on a consolidated basis, Adjusted Profit Before Tax is a non-IFRS measure. The most directly comparable IFRS measure is profit after tax. Adjusted Profit Before Tax Margin (formerly labelled Adjusted Operating Profit Margin) We define Adjusted Profit Before Tax Margin as Adjusted Profit Before Tax (as defined above) divided by revenue. We believe that Adjusted Profit Before Tax Margin is a useful measure as it allows management to assess the profitability of our business in relation to revenue. The most directly comparable IFRS Accounting Standards measure is profit margin, which is profit after tax divided by revenue. Adjusted Profit After Tax Attributable to Common Equity (formerly labelled Adjusted Operating Profit after Tax Attributable to Common Equity) We define Adjusted Profit After Tax Attributable to Common Equity as profit after tax adjusted for the items outlined in the Adjusted Profit Before Tax paragraph above. Additionally, Adjusted Profit After Tax Attributable to Common Equity is also adjusted for (i) tax and the tax effect of the Adjusting Items to calculate Adjusted Profit Before Tax and (ii) profit attributable to AT1 note holders, which is the coupons on the AT1 issuance and accounted for as dividends adjusted for the tax benefit of the coupons. Common equity is a non-IFRS measure and we define Common Equity as being the equity belonging to the holders of the Group's share capital. Adjusted Basic Earnings per Share and Adjusted Diluted Earnings per Share Adjusted Basic Earnings per Share is defined as the Adjusted Profit After Tax Attributable to Common Equity for the period divided by weighted average number of ordinary shares for the period. We believe Adjusted Basic Earnings per Share is a useful measure as it allows management to assess the profitability of our business per share. The most directly comparable IFRS metric is basic earnings per share. This metric has been designed to highlight the Adjusted Profit After Tax Attributable to Common Equity over the available share capital of the Group. Adjusted Diluted Earnings per Share is defined as the Adjusted Profit After Tax Attributable to Common Equity for the period divided by the diluted weighted average shares for the period. We believe Adjusted Diluted Earnings per Share is a useful measure as it allows management to assess the profitability of our business per share on a diluted basis. Dilution is calculated in the same way as it has been for diluted earnings per share. The most directly comparable IFRS metric is diluted earnings per share. Reconciliation The following table reconciles: (1) Adjusted Profit Before Tax and Adjusted Profit after Tax Attributable to Common Equity from the most directly comparable IFRS Accounting Standards measure, which is profit after tax, (2) Adjusted Profit Before Tax Margin from the most directly comparable IFRS Accounting Standards measure, which is profit margin (which is profit after tax divided by revenue), (3) Adjusted Basic Earnings per Share from the most directly comparable IFRS measure, which is basic earnings per share, and (4) Adjusted Diluted Earnings per Share from the most directly comparable IFRS measure, which is diluted earnings per share, in each case, for the periods presented below. Reconciliation of Non-IFRS Financial Measures and Key Performance Indicators: 3 months ended March 31, 2025 3 months ended March 31, 2025 3 months ended March 31, 2024 Estimated Low Estimated High Actuals $m $m $m Profit After Tax 69.9 75.6 43.6 Taxation charge 24.5 26.5 15.3 Profit Before Tax 94.4 102.1 58.9 Bargain purchase gains1 (3.4) (6.1) — Acquisition costs2 — — 0.2 Amortisation of acquired brands and customer lists3 1.3 1.3 0.8 Activities relating to shareholders4 — — 2.4 Owner fees5 — — 1.7 IPO preparation costs6 — — 3.7 Adjusted Profit Before Tax 92.3 97.3 67.7 Tax and the tax effect on the Adjusting Items7 (22.8) (24.1) (15.5) Profit attributable to AT1 note holders8 (3.3) (3.3) (3.3) Adjusted Profit after Tax Attributable to Common Equity 66.2 69.9 48.9 Profit After Tax Margin 16% 16% 12% Adjusted Profit Before Tax Margin9 21% 21% 19% Basic Earnings per Share ($)10 0.94 1.02 0.60 Diluted Earnings per Share ($)11 0.88 0.96 0.56 Adjusted Basic Earnings per Share($)10 0.94 0.99 0.74 Adjusted Diluted Earnings per Share ($)11 0.88 0.93 0.69 A bargain purchase gain is expected to be recognised as a result of the Group's acquisition of Darton Group Limited. Acquisition costs are costs, such as legal fees incurred in relation to the business acquisitions. This represents the amortisation charge for the period of acquired brands and customers lists. Activities in relation to shareholders primarily consist of dividend-like contributions made to participants within certain of our share-based payments schemes. Owner fees relate to management services fees paid to parties associated with the ultimate controlling party based on a percentage of our EBITDA in each year, presented in the income statement within other expenses. IPO preparation costs related to consulting, legal and audit fees, presented in the income statement within other expenses. Tax and the tax effect on the Adjusting Items represents the tax for the period and the tax effect of the other Adjusting Items removed from Profit After Tax to calculate Adjusted Profit Before Tax. The tax effect of the other Adjusting Items was calculated at the Group's effective tax rate for the respective period. Profit attributable to AT1 note holders are the coupons on the AT1 issuance, which are accounted for as dividends. Adjusted Profit Before Tax Margin is calculated by dividing Adjusted Profit Before Tax (as defined above) divided by revenue for the period. The weighted average numbers of shares used in the calculation for the three months ended March 31, 2025 range estimates and three months ended March 31, 2024 actuals were 70,541,771 and 65,683,374 respectively. Weighted average number of shares have been restated as applicable for the Group's reverse share split. The weighted average numbers of diluted shares used in the calculation for the three months ended March 31, 2025 range estimates and three months ended March 31, 2024 actuals were 74,942,291 and 70,383,309 respectively. Weighted average number of shares have been restated as applicable for the Group's reverse share split.
Yahoo
24-03-2025
- Business
- Yahoo
Marex Group plc Provides Details for Upcoming Investor Day on April 2, 2025
NEW YORK, March 24, 2025 (GLOBE NEWSWIRE) -- Marex Group plc ('Marex'), the diversified global financial services platform, provides details for its upcoming Investor Day being held at the Nasdaq MarketSite in New York on April 2, 2025. The event will feature presentations from Marex's business heads, providing a comprehensive review of Marex's operations and growth initiatives, reiterating the strategy stated at IPO, as well as a question and answer session with senior leadership including Ian Lowitt, CEO, Rob Irvin, CFO and Paolo Tonucci, Chief Strategist and CEO Capital Markets. What: Marex Group plc Investor Day 2025 When: Wednesday, April 2, 2025 9:30am – 2:00pm EST Where: Nasdaq Marketsite, New York, New York Due to limited capacity, the event will be invitation only, but a live stream of the event will be available via webcast. Interested parties can access the webcast through the 'News & Events' section of the Marex investor website at About Marex Group: Marex Group plc (NASDAQ: MRX) is a diversified global financial services platform providing essential liquidity, market access and infrastructure services to clients across energy, commodities and financial markets. The Group provides comprehensive breadth and depth of coverage across four core services: Clearing, Agency and Execution, Market Making and Hedging and Investment Solutions. It has a leading franchise in many major metals, energy and agricultural products, with access to 60 exchanges. The Group provides access to the world's major commodity markets, covering a broad range of clients that include some of the largest commodity producers, consumers and traders, banks, hedge funds and asset managers. Headquartered in London with more than 40 offices worldwide, the Group has over 2,300 employees across Europe, Asia and the Americas. For more information visit Enquiries please contact: Marex Nicola Ratchford / Robert Coates +44 (0) 7786548889 / +44 7880 486329 | nratchford@ / rcoates@ FTI Consulting US / UK +1 (919) 609-9423 / +44 (0) 7776 111 222 | marex@ in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Marex Group acquires warehousing firm Edgemere Terminals, sources say
By Pratima Desai LONDON (Reuters) - Marex Group has bought warehousing and logistics company Edgemere Terminals, which did not have the money to meet the London Metal Exchange's new capital adequacy rules, three sources with knowledge of the matter said. The LME late last week sent a notice to its members informing them of a change of address for Edgemere Terminals to 155 Bishopsgate, London, where commodities broker and financial services firm Marex is headquartered. Edgemere and Marex declined to comment. Edgemere is approved by the LME, which last year hiked its capital adequacy requirements to a minimum of five million pounds ($6.46 million), from one million pounds previously, for the warehouse companies in its network of 33 locations across the United States, Europe and Asia. The 148-year-old exchange, owned by Hong Kong Exchanges and Clearing Ltd., also increased the minimum level of insurance indemnity required for warehouses to one million pounds from 500,000 pounds previously. Edgemere did not have the money to comply with these requirements and had been looking for a buyer since then, the sources said, adding they did not know how much Marex paid for the warehousing firm or when the transaction took place. In August last year, UK-based Marex's CEO Ian Lowitt told Reuters the U.S.-listed firm was planning acquisitions to diversify the company, after strong results that sent shares to a record high. Marex bought rival ED&F Man Capital Markets to boost its metals business and expand in fixed income and equities in 2022, in a deal sources said was worth $220 million. The LME said in a release last September the bankruptcy of a warehouse company in 2016 supported the increases in the minimum capital adequacy requirements and the minimum level of insurance indemnity. ($1 = 0.7744 pounds) Sign in to access your portfolio
