BGC Partners aims to convert into corporation

Maria Nikolova

The current target is to be positioned to begin executing a conversion around the end of the third quarter of 2020.

International brokerage and fintech company BGC Partners (NASDAQ:BGCP) is planning to become a corporation. The announcement was made by Howard W. Lutnick, Chairman and Chief Executive Officer of BGC, as a part of the financial report for the final quarter and full year 2019.

Mr Lutnick explained:

“Before our first quarter conference call, we expect to submit a proposal to BGC’s Board of Directors and relevant committees with respect to converting our partnership into a corporation. Our current target is to be positioned to begin executing a conversion around the end of the third quarter of 2020, and expect to complete the execution around year end. Any such restructuring would be subject to tax, accounting, regulatory, and other considerations and approvals”.

In terms of results, let’s note that BGC posted GAAP net income of $83.5 million for FY19, up 13.3% from a year earlier. Revenues for 2019 amounted to $2.01 billion, up 8.6% from the preceding year.

“BGC’s revenues improved by 8.6 percent and 4.5 percent for the full year and fourth quarter of 2019 compared with last year,” said Mr Lutnick. “We generated top-line growth despite generally lower industry volumes. I am pleased to announce that our board declared a 14 cent qualified dividend for the fourth quarter. At yesterday’s closing stock price, this translates into a 9.4 percent annualized yield”.

Fenics generated strong year-on-year growth from its rates and data, software, and post-trade businesses during 2019. Inter-company revenues increased as the enhanced Fenics platform was rolled out to more voice/hybrid desks.

Fenics saw total electronic brokerage revenues of $204.6 million in FY19, up 4.4.% from a year earlier, whereas data, software and post-trade revenues were up 12.2% year-on-year at $277.8 million.

Over the last three calendar years, Fenics net revenue growth has meaningfully exceeded BGC’s overall organic top-line improvement, which is a trend the Company expects to continue.

On February 5, 2020, BGC Partners’ Board of Directors declared a quarterly qualified cash dividend of $0.14 per share payable on March 11, 2020 to Class A and Class B common stockholders of record as of February 26, 2020. The ex-dividend date will be February 25, 2020.

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