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Commodities broker Marex plans more acquisitions; shares surge after results
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Commodities broker Marex plans more acquisitions; shares surge after results
Aug 14, 2024 8:40 AM

LONDON (Reuters) - British-based commodities broker Marex Group is planning more acquisitions to diversify the company following a U.S. listing, its CEO told Reuters, in the wake of strong interim results that sent shares to a record high.

Marex listed on the U.S. Nasdaq exchange in April with an initial public offering (IPO) price of $19 a share. The shares jumped as much as 18% on Wednesday to a peak of $24.58.

The company posted a 27% surge in revenue for the first six months of the year and 27% gain in after-tax profit to $102.9 million.

Jefferies said in a note that earnings per share of 90 cents in the second quarter came in well above its estimate of 57 cents.

"Clearing revenue of $124 million was the biggest driver of the beat," a note said.

In recent years, Marex has been active in takeovers and this will resume in the future, CEO Ian Lowitt said in an interview.

"We actually have a robust pipeline of M&A opportunities," he said.

"That activity slowed in the period that we were focused predominantly on the IPO and meeting with investors, but now that's definitely picked up."

Marex will focus on acquisitions that diversify the company geographically and by product, with interest in the Middle East, Asia and the U.S., he added.

The company is positive on the second half, but typically activity is slightly less strong than in the first six months.

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

The company has benefited from rising global interest rates, which boost income on client balances, but expectations of rate cuts in coming months may curb that trend, Lowitt said.

"We anticipate interest rates will come down. That's a modest headwind for us, but there are a lot of growth initiatives that we have confidence will offset that."

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