Commodity broker Marex plans more acquisitions; shares rise after results

By Eric Onstad

LONDON (Reuters) – British commodities broker Marex Group is planning further acquisitions as it looks to diversify its U.S. listing, its chief executive told Reuters, after strong half-year results lifted shares to a record high.

Marex debuted on the U.S. Nasdaq Stock Exchange in April with an initial public offering (IPO) price of $19 per share. The stock rose 18% on Wednesday to a peak of $24.58.

The company reported a 27 percent increase in revenue in the first six months of the year and a 27 percent increase in net profit to $102.9 million.

Jefferies said in a note that second-quarter earnings per share of 90 cents significantly beat estimates of 57 cents.

“The biggest driver of this action was the achievement of revenue of $124 million,” the note reads.

Marex has been actively pursuing acquisitions in recent years and intends to continue to do so in the future, CEO Ian Lowitt said in an interview.

“We have really solid M&A potential,” he said.

“This activity slowed down during the period when we were mainly focused on IPOs and investor meetings, but it has definitely picked up now.”

He added that Marex intends to focus on acquisitions that will allow the company to diversify geographically and product-wise, with particular emphasis on the markets of the Middle East, Asia and the US.

The company recorded positive results in the second half of the year, but activity is generally slightly weaker than in the first six months.

Marex expects full-year adjusted operating profit of $280 million to $290 million, compared with $159.2 million in the first half.

The company benefited from rising global interest rates, which boosted revenue from customer accounts, but expectations of rate cuts in coming months could limit that trend, Lowitt said.

“We expect interest rates to come down. That’s a modest headwind for us, but there are a number of growth initiatives that we’re confident will offset that.”

(Reporting by Eric Onstad; editing by Paul Simao)