LBMA Annual Report 2023
Last year, and in advance of the 2022 audit of accounts being published, LBMA made a commitment to soften the impact of its financial decisions on its Members, Refiners and stakeholders.
In 2022, welcome improvements in some revenue streams coupled with departmental cost control measures and favourable Foreign Exchange rates have driven net profit returns marginally above that forecasted. For the first time since COVID-19, LBMA ran a full event programme including the in-person LBMA/LPPM Global Precious Metals Conference held in Lisbon in October, 2022. Financially, the event hit and marginally exceeded the targets set at the beginning of the year and this more than compensated for slightly higher costs in respect of the AGM, Annual Party and Annual Dinner.
Across both LBMA and PMPL, revenue was up by almost 24% and expenditure up by almost 42%. This reflected the net impact of a normalised, post-pandemic, activity schedule coupled with the impact of inflation.
Looking more closely at the financial detail, the major contributor to growth in LBMA revenue and expenditure in 2022 was the Lisbon Conference. The event realised £966K of additional revenue and accounted for almost 65% of total revenue growth. Similarly, it accounted for £819K of additional expenditure, or 49% of total expenditure growth. The impact of conducting a full event schedule grew expenditure by a further £362K across the year.
Other factors impacting upon financial performance included the cost of delivering the strategic plan in the Responsible Sourcing and Good Delivery business areas.
PMPL financial returns continue to go from strength to strength, with profit after tax for 2022 up by 29% on that returned in 2021. The principal driver for this has been the variation in US Dollar FX rates across the year. With both gold and silver benchmark returns paid in US dollars, the GB Pound returns have been favourable.
2023 looks set to be an encouraging year for both LBMA and PMPL with record membership levels and a sold-out Conference held in Barcelona. Early indications are that the LBMA departmental savings and revenue improvements across the year looks set to be around £340K above that budgeted. Clearly much of this will be driven by new Member revenue and Conference, but improvements have been delivered across all departments. Similarly, PMPL looks set to return improved profits driven by, among other things, the commencement of the Trade Reporting Revenue share from Nasdaq. All of this means that LBMA looks set to achieve its reserves targets well ahead of schedule.
The combination of the 2022 outturn coupled with significant improvements across 2023 means that LBMA has been able to deliver on its commitment to soften the impact on its Members, Refiners, and other stakeholders. Members and Subscribers have already been notified that their fees for 2024 will be frozen at the 2023 rates. There will be some increases in GDL maintenance and Responsible Sourcing Auditor fees, but overall the message is positive.