20/21 Annual Report

I am pleased to present my Chief Executive report for the year ended 30 June 2021.

Although turbulence in global markets has continued throughout the last 12 months, Onyx has managed to build strong foundations for our service-businesses whilst continuing to generate higher-than-expected profits through trading.

Business Overview

The 2020/2021 financial year, and the period since, were a time of tremendous progress and intense activity
during which Onyx's trading business continued to perform strongly in parallel to the expansion and roll out of
the Group's wider service offering. I'm delighted by what we achieved during this period and I'm really excited about the year ahead as we look to evolve the Group into an integrated platform business providing end to end market solutions to the oil industry.

The excellent financial performance during the period, which resulted in pre-tax profits for the year of £26.4m, was underpinned by our trading business which continued to perform ahead of our expectations. In addition substantial strides were made to grow and expand our new business lines and I expect to see a significant financial contribution from these businesses in the next financial year.

During the period we experienced continued challenges from the pandemic, and from the associated restrictions, but our internal processes and governance remained robust and thanks to the professionalism of our team we were able to continue unaffected with our day-to-day operations and with the implementation of our growth plans.

A key ingredient to our success and growth has been our ongoing ability to attract and retain the very best people available in the market. I was therefore delighted that, against the challenging backdrop of the pandemic we were able to maintain the quality and integrity of our market-leading trader training programme, and I am very proud of the fact that our trading team is made up of over 80% organically grown traders. Over the last twelve months we have also been able to attract world-class talent to build and grow our service businesses, fully supported by our fantastic technology team, and this has resulted in us being able to design, implement and launch 'Flux', our new trading platform, to the market.

In the trading business I was very pleased to see that our revenues were increasingly diversified this financial
year, with particular improvements in Crude, Naphtha and Gasoline desks which become an increasing
proportion of the overall revenue, as well as a standout performance from our new Natural Gas desk. Six of our seven desks are led and/or traded by a team of personnel handpicked and trained through our Onyx Elite Trader Training programme, bringing further validity of our ability to create sustainable growth in the trading business in the long term. After a highly challenging period of volatility in markets, we have made further additions to bolster our Risk team and support functions, and have implemented new risk management technology that has strengthened our intraday and overnight surveillance of trading risk. It is excellent that all our trading desks are profitable and that we didn't experience any downside volatility in revenues throughout the year. This gives us a fantastic platform from which to expand and grow our trading business even further.

For our service businesses, we were able to attract two senior managers with exceptional track records to lead our Research and Hedging Advisory departments. Since building out the team, Research has, in particular, made great strides, bringing together a team of research analysts, business development and research specific technology we call 'Edge'. This has resulted in steady growth, with sales growth accelerating towards the end of the 2020/2021 financial year and since. Research has been enhanced by improvements to the infrastructure and technology, but also the exciting introduction of proprietary data that is now a highly exciting part of the growth story for the Group.

We have now established the foundations of our proprietary dataset, sourcing a new team that has engineered a raw data set from our trading set that we believe is unique and will change the way oil swap markets are analysed. The data driven analysis of our market making positions reveals the make-up of the market position much the way the CFTC Commitment of Traders report is able to do, which is unique given the consolidation of market share we have been able to achieve across the oil swaps market. This is the first tangible evidence of the power of the Group business as a whole, demonstrating how the subsidiaries work in tandem to create value greater than the sum of its parts.

I am looking forward to seeing the continued progress of these businesses in the current financial year.

Future Operations and Outlook

The development of a cohesive business strategy for the Group that creates potent and scalable value has been further enhanced by the release of Flux, which was launched in the early months of the new financial year.

Flux has been created entirely in-house, led and operated by our exceptional technology talent. The data and
technology industry is now one of the most competitive for attracting talent in the world, so I was delighted that we were able to attract strong talent who bought into our vision and I am very aware of how important strong foundations in this area will be as we scale the business through data and technology. The coming year will be focussed on iteratively improving the software, to refine it to the industry specific needs. It will also create the backbone on which we intend to consolidate our liquidity providing, data and services, into one technology enabled hub for oil swaps trading.

Trading in the first quarter of the new financial year continued to be strong, a significant improvement on the
first quarter of last year. The trading business will continue its rapid expansion in terms of personnel, with a
focus on training the next generation which will in turn allow us to grow sustainably and organically into new
desks outside of oil swaps.

As ever we are focussed on retaining market share in each oil swap products, aiming for number one or two in the world which correlates with strong market making performance as well as validity and accuracy to our
proprietary data. We further expect to continue our build out of our service lines, and expect to be able to
demonstrate continued revenue growth throughout the financial year.

Vision and Alignment

What is thrilling for me personally is seeing our long-term vision for the Group coming together. For just over
five years we have been steadily consolidating our position as the number one liquidity provider of oil swaps,
whilst simultaneously building a presence in the logistical chain of oil swap trading that takes market
participants from market visibility, evaluation and price discovery through to execution.

The building of solid infrastructure in the form of data and technology is absolutely key to enable scale, however it will never be more important that the people that underpin whole business and vision. I am incredibly proud of just how unified and cohesive we are. The team continue to demonstrate bravery, agility and passion and this makes us an unstoppable force as we seek to complete the transformation of Onyx Capital Group into a market leading player across the oil industry.

Conclusion

The performance of the whole team has, once again, been exemplary. Trading revenues were increasingly diversified, new desks are turning significant profits, and the trader-training programme continues to produce high-performing personnel. The launch of Flux and Edge, and the recruitment of senior managers with proven track records mean that the service-businesses now have solid foundations to generate profits in the next financial year. All of this was achieved during a period of continued turbulence in global markets with a state of lockdown being imposed for a significant portion of the year. 

Greg Newman - CEO - Onyx Capital Group

View our full results at Companies House

View our 2019/20 Annual Report