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Marex Group plc(MRX) - 2024 Q2 - Quarterly Report
MRXMarex Group plc(MRX)2024-08-14 11:12

Financial Performance - Revenue for H1 2024 increased by 27% to 787.9millionfrom787.9 million from 622.4 million in H1 2023[8] - Profit Before Tax for H1 2024 rose by 27% to 139.0millioncomparedto139.0 million compared to 109.5 million in H1 2023[8] - Adjusted Operating Profit for H1 2024 increased by 28% to 159.2millionfrom159.2 million from 124.5 million in H1 2023[11] - Net commission income for H1 2024 grew by 23% to 427.3millionfrom427.3 million from 347.2 million in H1 2023[9] - Net trading income for H1 2024 rose by 14% to 242.7millionfrom242.7 million from 212.5 million in H1 2023[9] - Net interest income for H1 2024 increased by 68% to 101.0millionfrom101.0 million from 60.0 million in H1 2023[11] - Net physical commodities income surged by 526% to 16.9millionforH12024from16.9 million for H1 2024 from 2.7 million in H1 2023[11] - Adjusted Operating Profit increased by 21% in H1 2024 to 119.0million,withAdjustedOperatingProfitMarginsrisingby200basispointsto53119.0 million, with Adjusted Operating Profit Margins rising by 200 basis points to 53%[15] - Agency and Execution revenue rose to 332.6 million in H1 2024, a 32% increase from 252.3millioninH12023,benefitingfrompositivemarketconditionsandrecentacquisitions[16]−Securitiesrevenueincreasedby25252.3 million in H1 2023, benefiting from positive market conditions and recent acquisitions[16] - Securities revenue increased by 25% to 188.5 million in H1 2024, compared to 150.2millioninH12023,primarilyduetotheCowenacquisition[18]−Energydivisionrevenuegrewby42150.2 million in H1 2023, primarily due to the Cowen acquisition[18] - Energy division revenue grew by 42% to 143.3 million in H1 2024, up from 101.0millioninH12023,reflectingimprovedactivitylevelsinEuropeanEnergymarkets[20]−MarketMakingrevenueincreasedby23101.0 million in H1 2023, reflecting improved activity levels in European Energy markets[20] - Market Making revenue increased by 23% to 111.3 million in H1 2024, driven by strong Metals trading performance[22] - Hedging and Investment Solutions revenue rose by 36% to 86.0millioninH12024,upfrom86.0 million in H1 2024, up from 63.3 million in H1 2023, with growth across all regions[25] - Profit After Tax for the three months ended June 30, 2024, was 59.3million,comparedto59.3 million, compared to 43.6 million in the previous quarter[48] - Profit after tax for the six months ended June 30, 2024, was 102.9million,upfrom102.9 million, up from 80.8 million, marking a growth of 27.5%[57] - Total comprehensive income for the period ended 30 June 2024 was 98.9million,comparedto98.9 million, compared to 75.3 million for the same period in 2023, reflecting a year-over-year increase of 31.2%[63] Dividends and Shareholder Returns - A progressive dividend policy was announced, with an initial dividend of 10millionor10 million or 0.14 per share to be paid in Q3 2024[3] - The Board of Directors approved an initial dividend of 10millionor10 million or 0.14 per share, expected to be paid on 16 September 2024[36] - Dividends paid during the period totaled 44.1milliontoordinaryshareholdersand44.1 million to ordinary shareholders and 6.6 million to holders of AT1 securities, compared to 24.5millionand24.5 million and 6.6 million, respectively, in the prior year[98] - The company paid ordinary dividends of 50.7millionforthesixmonthsendedJune30,2024,comparedto50.7 million for the six months ended June 30, 2024, compared to 31.1 million in the same period of 2023, reflecting a year-over-year increase of 62.0%[66] Assets and Liabilities - Total Assets decreased from 17.6billionat31December2023to17.6 billion at 31 December 2023 to 17.2 billion at 30 June 2024, primarily due to a reduction in Reverse Repo agreements from 3.2billionto3.2 billion to 2.1 billion[29] - Cash and Liquid Assets increased from 4.5billionat31December2023to4.5 billion at 31 December 2023 to 5.1 billion at 30 June 2024, reflecting liquidity generated from structured notes and customer balance growth[30] - Total Equity increased by 14% to 882.3million,upfrom882.3 million, up from 775.9 million, driven by a Profit After Tax of 102.9millioninH12024[31]−TheGroup′sTotalCapitalRatioimprovedto276102.9 million in H1 2024[31] - The Group's Total Capital Ratio improved to 276% as of 30 June 2024, up from 229% at 31 December 2023, indicating significant capital headroom[35] - Total liabilities decreased to 16,307.1 million from 16,835.7million,showingareductionof3.116,835.7 million, showing a reduction of 3.1%[61] - Current assets totaled 16,665.2 million, slightly down from 16,936.0millionattheendofDecember2023[59]−Non−currentassetsasofJune30,2024,totaled16,936.0 million at the end of December 2023[59] - Non-current assets as of June 30, 2024, totaled 317.6 million, an increase from 293.0millionasofDecember31,2023[94]−Thetotalbalanceofderivativefinancialassetsincreasedfrom293.0 million as of December 31, 2023[94] - The total balance of derivative financial assets increased from 655.6 million (December 2023) to 730.8million(June2024),reflectingagrowthof11.5730.8 million (June 2024), reflecting a growth of 11.5%[107] - The total balance of derivative financial liabilities increased from 402.2 million (December 2023) to 496.8million(June2024),anincreaseof23.5496.8 million (June 2024), an increase of 23.5%[109] Operational Metrics - Clearing business cleared 538 million contracts in H1 2024, a 28% increase compared to the same period in 2023[13] - Average headcount increased by 13% to 295 in H1 2024, supporting revenue growth across various segments[14] - Total number of trades executed on the platform increased, contributing to overall revenue growth[46] - Average Balances of segregated and non-segregated client balances generating interest income increased over the last five quarters[46] Costs and Expenses - Control and support costs increased by 65% to (90.2) million in H1 2024 compared to (54.8)millioninH12023[28]−Thecompanyincurred(54.8) million in H1 2023[28] - The company incurred 4.6 million in IPO preparation costs for the three months ended June 30, 2024[48] - The Corporate segment reported an adjusted operating loss of 70.2million,impactingtheoverallprofitabilityoftheGroup[90]AccountingandReportingChanges−TheGroupadoptednewaccountingstandardseffectiveJanuary1,2024,butthesedidnotimpacttheinterimcondensedconsolidatedfinancialstatements[70]−TheGroup′saccountingpoliciesforrevenuepresentationwerechangedtodisaggregateincomederivedfromordinaryactivities,enhancingclarity[73]−RevenueforthesixmonthsendedJune30,2023,wasrestatedto70.2 million, impacting the overall profitability of the Group[90] Accounting and Reporting Changes - The Group adopted new accounting standards effective January 1, 2024, but these did not impact the interim condensed consolidated financial statements[70] - The Group's accounting policies for revenue presentation were changed to disaggregate income derived from ordinary activities, enhancing clarity[73] - Revenue for the six months ended June 30, 2023, was restated to 622.4 million, down from the originally reported 1,191.3million[74]−InterestincomeforthesixmonthsendedJune30,2023,wasrestatedto1,191.3 million[74] - Interest income for the six months ended June 30, 2023, was restated to 308.3 million, correcting a previous misclassification[76] - Provision for credit losses for the six months ended June 30, 2023, was restated to 4.5million,previouslyincludedinoperatingexpenses[77]−Impairmentofgoodwillincreasedby4.5 million, previously included in operating expenses[77] - Impairment of goodwill increased by 10.7 million for the six months ended June 30, 2023, related to Volatility Performance Fund S.A.[78] Shareholder Equity and Capital Management - Common Equity as of June 30, 2024, was 784.7million,upfrom784.7 million, up from 673.7 million in the previous quarter[49] - Basic earnings per share increased to 1.41,comparedto1.41, compared to 1.13 in the prior year, indicating a rise of 24.8%[55] - The Group's management has determined that there are no material uncertainties affecting its ability to continue as a going concern for at least 12 months from the reporting period end[69] - The Group's Level 3 financial assets decreased slightly to 0.7millionasofJune30,2024,from0.7 million as of June 30, 2024, from 0.8 million as of December 31, 2023, while Level 3 financial liabilities decreased to 2.6millionfrom2.6 million from 6.0 million[139] IPO and Acquisitions - The company issued 3,846,153 new ordinary shares at an initial offering price of 19.00pershare,generatinggrossproceedsof19.00 per share, generating gross proceeds of 73.0 million during its IPO[68] - The Group completed the acquisition of Cowen Asia Limited and Cowen and Company (Asia) Limited for a total consideration of 3.5millionon2July2024[159]−TheacquisitionofPinnacleFuelLLCwascompletedforatotalconsiderationof3.5 million on 2 July 2024[159] - The acquisition of Pinnacle Fuel LLC was completed for a total consideration of 4.0 million, which included $3.7 million of goodwill premium[100]