Aquis Exchange PLC - Interim Results
Announcement provided by
Aquis Exchange PLC · AQX12/09/2024 07:00
Aquis Exchange PLC
("Aquis", the "Company" or the "Group")
Interim results for the six months ended 30 June 2024
Continued strategic progress across all divisions
Investment in Technologies division to support conversion of growing, high-quality pipeline
Aquis Exchange PLC (AQX.L), the creator and facilitator of next-generation financial markets, is pleased to announce its unaudited results for the six months ended 30 June 2024.
Financial highlights:
|
HY24 |
HY23 |
Change |
Net revenue |
10.0 |
9.7 |
+3.5% |
EBITDA |
1.6 |
1.7 |
-6.5% |
Profit before tax |
1.1 |
1.1 |
-8.1% |
Basic EPS (p) |
3.0p |
3.8p |
-0.8p |
Cash and cash equivalents |
14.5 |
13.9 |
+4.3% |
Operational highlights
· Strategic delivery across all divisions:
- Aquis Technologies: strong growth in contract pipeline; more than half are for national exchanges or central banks, demonstrating the evolution of the division's client profile.
- Aquis Markets: market share up to 5.20% (FY23: 4.85%), as the benefits of the change to the proprietary trading rule continue to flow through and members adapt to the change.
- Aquis Data: increase in revenue, driven by new data fees for members which came into effect in the second quarter, with further positive impact expected as the year progresses.
- Aquis Stock Exchange: strong growth in trading, with volumes up 44% on the prior year and
· Post-period end:
- Announced
- Increased stake in OptimX Markets to 10.2%, adding additional connectivity to Aquis Matching Pool (AMP).
Outlook
· Current trading is in line with the Board's expectations set out in the August 2024 trading update.
· The Group has a strong cash position of
Aquis CEO, Alasdair Haynes, said:
"I am pleased with the progress made by Aquis in the first half of 2024, as we continued to deliver against our strategy at pace. We have made meaningful progress across all of our divisions, the majority of which have increased revenues and maintained stable PBT, reflecting the investment plans we communicated last year.
"There is real momentum across the business. Our pipeline in the Technologies division has increased materially since last year and now stands at record levels, with notable growth in the quality of the pipeline as well. Our strategic investment in this division demonstrates our commitment to strengthen the Group's ability to capitalise on this pipeline, and drive further scale.
"I am excited about the future as Aquis remains well-placed to pursue the opportunities that lie ahead, as we continue to execute our long-term growth plan."
Enquiries:
Aquis Exchange PLC Alasdair Haynes, CEO Richard Fisher, CFO Adele Gilbert, Head of Marketing & Investor Relations
|
Tel: +44 (0)20 3597 6329 investorrelations@aquis.eu |
Investec Bank plc (Nominated Adviser and Broker) David Anderson Lydia Zychowska St John Hunter
|
Tel: +44 (0)20 7597 5970 |
Canaccord Genuity Limited (Joint Broker) Emma Gabriel George Grainger
|
Tel: +44 (0) 20 7523 8000
|
VSA Capital Limited (AQSE Corporate Adviser) Andrew Raca MHP Group (Financial PR Adviser) Eleni Menikou Robert Collett-Creedy |
Tel: +44 (0 )20 3005 5000
Tel: +44 (0) 20 3128 8000 Aquis@mhpgroup.com
|
About Aquis Exchange PLC
Aquis Exchange PLC ("Aquis") is
Aquis consists of four divisions:
Aquis Markets operates lit and dark order books, covering 16 European markets. For its lit books, Aquis uses a subscription pricing model which works by charging users according to the message traffic they generate, rather than a percentage of the value of each stock that they trade.
Aquis Technologies is the software and technology division of Aquis. It focuses on building better markets via the creation and licensing of cutting-edge, cost-effective exchange infrastructure technology and services, including matching engine and trade surveillance solutions.
Aquis Stock Exchange (AQSE) is a stock market providing primary and secondary markets for equity and debt products. It is authorised as a Recognised Investment Exchange, which allows it to operate a regulated listings venue. The AQSE Growth Market is divided into two segments 'Access' and 'Apex'; the Access market focuses on earlier stage growth companies, while Apex is the intended market for larger, more established businesses.
Aquis Data generates revenue from the sale of data derived from Aquis Markets and Aquis Stock Exchange to market participants.
Aquis is authorised and regulated by the
In the first half of 2024, Aquis continued to deliver on its strategic priorities, despite ongoing challenging market and economic conditions. This progress has strengthened our position, which will enable us to better capitalise on the growing and compelling market opportunity across all of our divisions.
Operational Review
Aquis Technologies
Aquis Technologies is the software and technology division of Aquis. It creates and licenses cutting-edge, cost-effective exchange infrastructure technology and services, including matching engine and trade surveillance solutions.
Aquis Technologies currently has eight contracts, of which six have recognised revenue. In accordance with IFRS accounting standards, Aquis recognises license revenue on completion of project delivery, which can lead to irregular revenue recognition, period-on-period. The cash flow from these contracts is consistent and is received each month over the long term.
During the period, growth of the Technologies contract pipeline accelerated to become the strongest in the division's history. One contract was signed subject to client funding and a further 12 opportunities are in active discussion. Half of these are for national exchanges or central banks, demonstrating the evolution and quality of the division's prospective client profile.
The strategic investment, outlined below, which is being deployed to build out a set of key additional products, is expected to both alleviate the perceived execution risk of the current 'build on demand' approach and also to facilitate a shorter implementation period for contracts won.
Post-period end, the Group was informed that a historical contract for a start-up exchange would not be renewed for a reason not related to Aquis or its technology. Whilst this is disappointing, the Group remains encouraged by the scale of the opportunity in the Technologies division and the quality of its pipeline.
Strategic initiatives
Management has identified significant opportunity within the Technologies division for the provision of large multi-year contracts for the Group's market-leading proprietary matching engine technology.
As announced on 28 August 2024, Aquis is undertaking an additional significant investment into its Technologies division to underpin this strategic focus. By expanding the product suite, and enhancing capabilities and expertise within the division, this strategic investment will fundamentally change Aquis' ability to access the total addressable market for exchange technology. By broadening our range of asset classes, we both further support the growth of technology contracts over the medium to long term and also better serve the technology needs of sophisticated national exchanges and major financial institutions.
Aquis intends to invest an additional
Aquis Markets
Aquis Markets is the Group's pan-European secondary trading equities market. It comprises the
Over the period, the change in the proprietary trading rule which came into effect in late 2023, had a positive impact on market share, which grew to 5.20% (FY23: 4.85%). Further progress in market share is expected as members continue to adapt to this change.
Market conditions remain challenging, with low lit market volumes persisting. However, the division continues to innovate and endeavour to better serve member requirements.
Post-period end, we completed our investment in OptimX Markets, taking Aquis' stake to 10.2%. OptimX continues to make progress against its strategic objectives, and when live, will add additional connectivity to the Aquis Matching Pool ('AMP') and provide members with the ability to cross large blocks.
Aquis Data
Aquis generates revenue from the sale of data derived from Aquis Markets (AQXE & AQEU) and Aquis Stock Exchange to non-member market participants. The total number of market data customers by 30 June 2024 was 107 (31 December 2023: 75).
Revenues grew during the period as a result of both the growth in customer numbers and the introduction of fees for data (which came into effect in Q2). We expect this positive trend to continue.
The creation of a consolidated tape in both the EU and the
Aquis Stock Exchange (AQSE)
Aquis Stock Exchange is a modern market for modern businesses, bringing positive disruption and competition to the primary listings sector in the
Tough conditions persisted in the period, with a depressed primary listings environment across all exchanges. Aquis Stock Exchange had two IPOs in the period, but is reassured by its larger pipeline of issuers exploring listings in Q4 2024 or Q1 2025.
The division saw positive momentum in trading and fundraising, with a 44% increase in the value of trading, 10% increase in the number of trades and 88% increase in the total value of further issues compared to H1 23.
The division is profitable and we remain positive on the long-term potential for the Aquis Stock Exchange.
Financial Review
Net revenue increased 3.5% to
Divisional net revenues:
|
6 months to |
6 months to |
Change |
Markets |
5,780 |
5,868 |
-1.5% |
Technologies |
1,214 |
1,133 |
7.1% |
Data |
2,153 |
1,840 |
17.0% |
Aquis Stock Exchange |
867 |
833 |
4.1% |
|
10,014 |
9,674 |
3.5% |
EBITDA was
Operating costs increased by 5.6% to
Profit before tax of
The Group continues to maintain a strong balance sheet and continues to generate cash above operational requirements. Cash equivalents at 30 June 2024 were
Summary and Outlook
Despite the continued macroeconomic headwinds affecting the operating conditions of many of our divisions, we are pleased with the strategic progress achieved in H1 24.
We have gained market share in our Markets division. The pipeline in our Technologies business has grown notably and through the planned strategic investment we believe we are well positioned to continue to grow in this division.
Starting in H2 24, our strategic investments in the Technologies division will drive further scale and quality of contracts. Although full benefits will be realised in the medium to long term, we are pleased with the strength of the current pipeline and will continue to focus on securing and converting these contracts in the short term.
The consolidated tape represents significant potential upside for Aquis.
Current trading remains in line with the Board's expectations set out in the August 2024 trading update.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2024
|
|
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
|||
|
Note |
|
£'000 |
|
£'000 |
|
£'000 |
|
|||
Income Statement |
|
|
|
|
|
|
|
|
|||
Revenue |
3 |
|
9,518 |
|
23,711 |
|
9,342 |
|
|||
Impairment credit / (charge) on contract assets |
4 |
|
496 |
|
(1,016) |
|
332 |
||||
Impairment credit / (charge) on trade and other receivables |
4 |
|
47 |
|
(80) |
|
(5) |
|
|||
Other (losses) / gains |
5 |
|
(25) |
|
51 |
|
(40) |
|
|||
Administrative expenses |
6 |
|
(8,449) |
|
(16,396) |
|
(7,932) |
|
|||
Earnings before interest, taxation, depreciation and amortisation |
|
|
1,587 |
|
6,270 |
|
1,697 |
|
|||
Depreciation and amortisation |
6 |
|
(796) |
|
(1,373) |
|
(672) |
|
|||
Finance expense |
6,15 |
|
(40) |
|
(103) |
|
(54) |
|
|||
Finance income |
6 |
|
301 |
|
401 |
|
174 |
|
|||
Profit before taxation |
|
|
1,052 |
|
5,195 |
|
1,145 |
|
|||
Income tax (expense) / credit |
8 |
|
(240) |
|
8 |
|
(99) |
|
|||
Profit after taxation |
|
|
812 |
|
5,203 |
|
1,046 |
|
|||
|
|
|
|
|
|
|
|
|
|||
Other comprehensive income Items that may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|||
Foreign exchange differences on translation of foreign operations
|
|
(96) |
|
(121) |
|
(101) |
|
||||
Other comprehensive loss for the period
|
|
|
(96) |
|
(121) |
|
(101) |
|
|||
Total comprehensive profit for the period |
|
716 |
|
5,082 |
|
945 |
|
||||
|
|
|
|
|
|
|
|
||||
Earnings per share (pence) |
|
|
|
|
|
|
|
||||
Basic |
|
|
|
|
|
|
|
||||
Ordinary shares |
9 |
|
3 |
|
19 |
|
4 |
|
|||
Diluted |
|
|
|
|
|
|
|
|
|||
Ordinary shares |
9 |
|
3 |
|
19 |
|
4 |
|
|||
|
|
|
|
|
|
|
|
|
|||
The consolidated statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024
|
|
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
Assets |
Note |
|
£'000 |
|
£'000 |
|
£'000 |
|
Non-current assets |
|
|
|
|
|
|
|
|
Goodwill |
10 |
|
83 |
|
83 |
|
83 |
|
Intangible assets |
10 |
|
1,893 |
|
1,502 |
|
1,253 |
|
Property, plant and equipment |
11 |
|
3,682 |
|
3,819 |
|
3,829 |
|
Deferred tax asset |
7 |
|
1,785 |
|
1,785 |
|
1,594 |
|
Investments |
12 |
|
592 |
|
592 |
|
- |
|
Trade and other receivables |
13 |
|
5,713 |
|
5,811 |
|
4,108 |
|
|
|
|
13,748 |
|
13,592 |
|
10,867 |
|
Current assets |
|
|
|
|
|
|
|
|
Trade and other receivables |
13 |
|
7,097 |
|
6,895 |
|
6,800 |
|
Derivative financial instruments |
5 |
|
27 |
|
51 |
|
- |
|
Cash and cash equivalents |
|
|
14,545 |
|
14,766 |
|
13,905 |
|
|
|
|
21,669 |
|
21,712 |
|
20,705 |
|
Total assets |
|
|
35,417 |
|
35,304 |
|
31,572 |
|
Liabilities |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Trade and other payables |
14 |
|
4,011 |
|
4,469 |
|
4,455 |
|
Derivative financial instruments |
5 |
|
- |
|
- |
|
40 |
|
|
|
|
4,011 |
|
4,469 |
|
4,495 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Lease liabilities |
15 |
|
2,241 |
|
2,457 |
|
2,667 |
|
Total liabilities |
|
|
6,252 |
|
6,926 |
|
7,162 |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
29,165 |
|
28,378 |
|
24,410 |
|
Equity |
|
|
|
|
|
|
|
|
Called up share capital |
16 |
|
2,756 |
|
2,752 |
|
2,752 |
|
Share premium account |
17 |
|
11,968 |
|
11,810 |
|
11,810 |
|
Other reserves |
20 |
|
3,331 |
|
2,742 |
|
2,320 |
|
Treasury shares |
18 |
|
(5,069) |
|
(4,389) |
|
(3,798) |
|
Retained earnings |
|
|
16,332 |
|
15,520 |
|
11,363 |
|
Foreign currency translation reserve |
|
|
(153) |
|
(57) |
|
(37) |
|
Total equity |
|
|
29,165 |
|
28,378 |
|
24,410 |
|
The notes to the financial statements on pages 12 to 30 form an integral part of these financial statements. The interim financial statements were approved by the board of directors and authorised for issue on 12 September 2024 and are signed on its behalf by:
R Fisher Director |
A Haynes Director |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2024
|
Note |
Share Capital |
|
Share Premium |
|
Other Reserves |
|
Treasury Shares |
|
Retained Earnings |
|
Foreign Currency Translation Reserve |
|
Total |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2023 |
|
2,751 |
|
11,785 |
|
1,813 |
|
(3,350) |
|
10,317 |
|
64 |
|
23,380 |
|
Profit for the 6-month period |
- |
|
- |
|
- |
|
- |
|
1,046 |
|
- |
|
1,046 |
|
|
Foreign exchange differences on translation of foreign operations |
- |
|
- |
|
- |
|
- |
|
- |
|
(101) |
|
(101) |
|
|
Total comprehensive income for the period |
- |
|
- |
|
- |
|
- |
|
1,046 |
|
(101) |
|
945 |
|
|
Issue of new shares |
16,17 |
1 |
|
25 |
|
- |
|
- |
|
- |
|
- |
|
26 |
|
Movement in share based payment reserve |
20 |
- |
|
- |
|
507 |
|
- |
|
- |
|
- |
|
507 |
|
Movement in treasury shares |
18 |
- |
|
- |
|
- |
|
(448) |
|
- |
|
- |
|
(448) |
|
Balance at 30 June 2023 |
|
2,752 |
|
11,810 |
|
2,320 |
|
(3,798) |
|
11,363 |
|
(37) |
|
24,410 |
|
Profit for the 6-month period |
- |
|
- |
|
- |
|
- |
|
4,157 |
|
- |
|
4,157 |
|
|
Foreign exchange differences on translation of foreign operations |
- |
|
- |
|
- |
|
- |
|
- |
|
(20) |
|
(20) |
|
|
Total comprehensive income for the period |
- |
|
- |
|
- |
|
- |
|
4,157 |
|
(20) |
|
4,137 |
|
|
Issue of new shares |
16,17 |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Movement in share based payment reserve |
20 |
- |
|
- |
|
422 |
|
- |
|
- |
|
- |
|
422 |
|
Movement in treasury shares |
18 |
- |
|
- |
|
- |
|
(591) |
|
- |
|
- |
|
(591) |
|
Balance at 31 December 2023 |
|
2,752 |
|
11,810 |
|
2,742 |
|
(4,389) |
|
15,520 |
|
(57) |
|
28,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the 6-month period |
- |
|
- |
|
- |
|
- |
|
812 |
|
- |
|
812 |
|
|
Foreign exchange differences on translation of foreign operations |
- |
|
- |
|
- |
|
- |
|
- |
|
(96) |
|
(96) |
|
|
Total comprehensive income for the period |
- |
|
- |
|
- |
|
- |
|
812 |
|
(96) |
|
716 |
|
|
Issue of new shares |
16,17 |
4 |
|
158 |
|
- |
|
- |
|
- |
|
- |
|
162 |
|
Movement in share based payment reserve |
20 |
- |
|
- |
|
589 |
|
- |
|
- |
|
- |
|
589 |
|
Movement in treasury shares |
18 |
- |
|
- |
|
- |
|
(680) |
|
- |
|
- |
|
(680) |
|
Balance at 30 June 2024 |
|
2,756 |
|
11,968 |
|
3,331 |
|
(5,069) |
|
16,332 |
|
(153) |
|
29,165 |
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2024
|
|
|
Note |
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
Net cash flows from operating activities |
19 |
1,409 |
|
4,103 |
|
911 |
||
|
|
|
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
|
|
|
|
Recognition of intangible assets |
10 |
(771) |
|
(1,082) |
|
(509) |
|
|
Purchase of property, plant and equipment |
11 |
(279) |
|
(411) |
|
(57) |
|
|
Investment acquisitions |
|
12 |
- |
|
(592) |
|
- |
|
Interest received |
|
6 |
285 |
|
385 |
|
169 |
|
Recovery of rent deposit |
|
|
5 |
|
- |
|
- |
|
Net cash used in investing activities |
(760) |
|
(1,700) |
|
(397) |
||
|
|
|
|
|
|
|
|
|
Financing Activities |
|
|
|
|
|
|
|
|
|
Issue of new shares |
16,17 |
162 |
|
26 |
|
26 |
|
|
Principal portion of lease liability |
15 |
(256) |
|
(516) |
|
(257) |
|
|
Purchase of treasury shares |
|
(680) |
|
(1,197) |
|
(448) |
|
|
Net cash used in financing activities |
(774) |
|
(1,687) |
|
(679) |
||
|
|
|
|
|
|
|
|
|
Net (decrease) / increase in cash and cash equivalents |
(125) |
|
716 |
|
(165) |
|||
Cash and cash equivalents at the beginning of the period |
14,766 |
|
14,171 |
|
14,171 |
|||
Effect of exchange rate changes on cash and cash equivalents |
(96) |
|
(121) |
|
(101) |
|||
Cash and cash equivalents at the end of the period |
14,545 |
|
14,766 |
|
13,905 |
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation of half-year report
This condensed consolidated interim financial report for the half-year reporting period beginning 1 January 2024 and ending 30 June 2024 ("interim period") has been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2023 and any public announcements made by Aquis Exchange PLC ("Aquis" or the "Company") during the interim reporting period.
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
2. Significant post balance sheet events
On 31 July 2024 Aquis Exchange PLC acquired a further 5% stake in OptimX LLC, a US-based financial services start-up focused on the block trading market (the "investment"). This transaction was the second tranche of planned investment rounds for which Aquis transferred
On 2 July 2024 Aquis Exchange PLC recovered its rent deposit from the landlord of the
3. Revenue
Revenue analysed by class of business:
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Exchange Fees |
6,069 |
|
11,583 |
|
6,153 |
Licence Fees |
718 |
|
7,298 |
|
801 |
Issuer Fees |
578 |
|
1,108 |
|
548 |
Data Vendor Fees |
2,153 |
|
3,722 |
|
1,840 |
|
9,518 |
|
23,711 |
|
9,342 |
Licence fees and contract assets: Aquis Exchange PLC provides technology services under licence to clients. The services comprise the provision of an exchange platform and / or a surveillance system and may also include support services comprising basic infrastructure support or additional services. The duration of the licences varies between 1 and 7 years and will consist of an implementation fee, and, post implementation, a monthly licence fee for the duration of the contract. The monthly fees also cover system maintenance and system upgrades that typically occur every 12 - 18 months. The licensing contracts are accounted for under IFRS 15 and any corresponding contract assets are subject to IFRS 9 provisioning, as disclosed further in Note 4. Contract liabilities arise when consideration has been provided to Aquis prior to completion of relevant performance obligations as outlined below. These balances typically arise when customers pay in advance of implementation. As of the balance sheet date there are no contract liabilities (2023: nil). The revenue from licensing contracts with customers has been categorised reflecting the nature, amount, customer categorisation, contract duration and uncertainty of revenue and cash flows. Revenue from licensing contracts is assessed for each contract and is recognised as and when each performance obligation is satisfied. A transaction price is determined by the contractual terms of an agreement. Transaction prices are allocated to each performance obligation based on the standalone price of the product or service offered by the Group. The list of performance obligations included within Aquis' Technology Licence agreements is outlined in previous year's Annual Report and Accounts. For licensing contracts, the Company has assessed the expected credit loss of each client individually. The transaction price is allocated according to the Group's obligations to the client over the course of licence period. There is no constrained variable consideration in any customer contracts. The licensing fees line item also includes connectivity fees for licensing contract customers that are recognised at a point in time as they reflect variable revenue determined on a monthly basis and are underpinned by a separate agreement. |
|
|||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
||
|
£'000 |
|
£'000 |
|
£'000 |
|
||
As at 1 January |
8,481 |
|
6,114 |
|
6,114 |
|
||
PO2: Licence fees |
- |
|
5,419 |
|
86 |
|
||
PO3: Maintenance fees |
340 |
|
450 |
|
218 |
|
||
Net ECL credit / (provision) on contract assets |
496 |
|
(1,016) |
|
332 |
|
||
Transfers to trade receivables |
(1,494) |
|
(2,345) |
|
(1,133) |
|
||
Adjustments for foreign exchange gains / (losses) |
21 |
|
(141) |
|
(29) |
|
||
As at end of period
|
7,844 |
|
8,481 |
|
5,558 |
|
||
|
4. Expected credit loss
The Group has two types of financial asset that are subject to potential impairment, these are contract assets relating to technology licencing contracts within the Company and also trade receivables arising on services provided in the AQSE subsidiary.
The Group have concluded that trade receivables and contract assets have different risk characteristics and therefore the Expected Credit Loss (ECL) rates for each type of asset are measured separately. Since they comprise a portfolio of only a small number of clients, contract assets have been assessed on a client-by-client basis, whilst trade receivables have been grouped based on shared credit risk characteristics and the days past due.
IFRS 9 provisioning is applied to technology licensing contract assets based on management estimates of the collectability of contracts over their useful life, and which are re-assessed at each renewal and also at each year-end.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for trade receivables and contract assets and therefore the ECL for each contract is assessed on a lifetime basis rather than at each reporting date. As the simplified approach is adopted it is not necessary to consider the impact of a significant increase in credit risk.
The expected credit loss on licensing contract assets has been calculated in accordance with IFRS 9:
|
|
Contract Assets |
|
Trade receivables |
|
|
£'000 |
|
£'000 |
Opening impairment provision at 1 January 2023 |
|
1,347 |
|
59 |
ECL increase during the period |
|
- |
|
5 |
Written-off financial assets |
|
- |
|
(14) |
ECL on new contract assets |
|
23 |
|
- |
ECL reversed over time |
|
(355) |
|
- |
Impairment provision at 30 June 2023 |
|
1,015 |
|
50 |
ECL increase during the period |
|
- |
|
75 |
Written-off financial assets |
|
- |
|
(21) |
ECL on new contract assets |
|
1,707 |
|
- |
ECL reversed over time |
|
(358) |
|
- |
Impairment provision at 31 December 2023 |
|
2,363 |
|
104 |
ECL increase during the period |
|
- |
|
(47) |
Written-off financial assets |
|
- |
|
- |
ECL on new contract assets |
|
- |
|
- |
ECL reversed over time |
|
(496) |
|
- |
Impairment provision at 30 June 2024 |
|
1,867 |
|
57 |
5. Other gains and losses
Earnings before interest, taxation, depreciation and amortisation is stated after charging:
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Fair value movements in derivative instruments, (losses) / gains |
(25) |
|
51 |
|
(40) |
In January 2023 forward contracts were taken by the Company in order to economically hedge against foreign exchange movements in contract asset balances denominated in US Dollars. These derivatives are remeasured at fair value at each reporting date with the movement recognised in profit or losses within other gains and losses.
These derivatives are measured at fair value and are classified at level 2 of fair value hierarchy measurements. Future cash flows are estimated based on quoted forward exchange rates and contract forward rates. There are no significant unobservable inputs. The period to date loss on these items is
6. Operating expenses
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Administrative Expenses |
|
|
|
|
|
Share-based payments |
589 |
|
1,086 |
|
507 |
Exchange (gains) / losses |
(82) |
|
104 |
|
(53) |
Employee costs |
4,977 |
|
9,133 |
|
4,407 |
Operating costs |
2,965 |
|
6,073 |
|
3,071 |
|
8,449 |
|
16,396 |
|
7,932 |
Profit before taxation is stated after charging:
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Depreciation, amortisation and finance costs |
|
|
|
|
|
Depreciation of property plant and equipment |
416 |
|
761 |
|
384 |
Amortisation of intangible assets |
380 |
|
612 |
|
288 |
|
796 |
|
1,373 |
|
672 |
Operating expenses (continued)
Profit before taxation is stated after charging (continued):
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Finance expense on lease liabilities (note 15) |
40 |
|
103 |
|
54 |
Finance income on lease assets (note 15) |
(5) |
|
(16) |
|
(5) |
Interest on deposited funds |
(296) |
|
(385) |
|
(169) |
|
(261) |
|
(298) |
|
(120) |
Total Group expenses were as follows: |
8,984 |
17,471 |
8,484 |
7. Deferred tax asset
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Deferred tax asset |
1,785 |
|
1,785 |
|
1,594 |
8. Income tax
|
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
|||||
|
Current tax |
£'000 |
|
£'000 |
|
£'000 |
|
|||||
|
UK Corporation tax charge |
- |
|
- |
|
- |
|
|||||
|
Overseas tax charges on foreign operations |
240 |
|
184 |
|
99 |
|
|||||
|
Total tax charge |
240 |
|
184 |
|
99 |
|
|||||
Deferred tax |
|
|
|
|
|
|||||||
|
Origination and reversal of timing differences |
- |
|
(192) |
|
- |
|
|||||
|
Effect of changes in tax rates |
- |
|
- |
|
- |
|
|||||
|
Total tax charge |
- |
|
(192) |
|
- |
|
|||||
Income tax (continued)
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Profit before tax |
1,052 |
|
5,195 |
|
1,145 |
Expected tax charge based on a corporation tax charge of 25% (Dec 23: 23.5% June 23: 19%) |
59 |
|
1,039 |
|
195 |
Expected tax charge based on effective overseas rates of 25% |
240 |
|
182 |
|
99 |
Fixed asset differences |
- |
|
- |
|
(182) |
Expenses not deductible for tax purposes |
92 |
|
219 |
|
87 |
Other differences |
(1) |
|
1 |
|
(7) |
Remeasurement of deferred tax for changes in tax rates |
8 |
|
79 |
|
(93) |
Movement in deferred tax not recognised |
(158) |
|
(1,528) |
|
- |
Tax charge / (credit) for the period |
240 |
|
(8) |
|
99 |
9. Earnings per share
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023 |
Number of Shares ('000) |
|
|
|
|
|
Weighted average number of ordinary shares for basic earnings per share |
26,685 |
|
26,814 |
|
26,871 |
Weighted average number of ordinary shares for diluted earnings per share |
27,585 |
|
27,714 |
|
27,771 |
Earnings (£'000) |
|
|
|
|
|
Profit for the period from continued operations |
812 |
|
5,203 |
|
1,046 |
Basic and diluted earnings per share (pence) |
|
|
|
|
|
Basic earnings per ordinary share |
3 |
|
19 |
|
4 |
Diluted earnings per ordinary share |
3 |
|
19 |
|
4 |
Basic earnings per share is in respect of all activities of the Group and diluted earnings per share takes into account the dilution effects which would arise on conversion or vesting of all outstanding share options and share awards under the Enterprise Management Incentive (EMI) scheme.
The basic EPS when adjusted for outstanding EMI options of 852,378 (2023: 899,378), including forfeited options in the period of nil (2023: nil), gives a weighted average of 27,585,823 (2023: 27,714,143).
10. Intangible assets
|
Developed Trading Platforms
|
Other Intangibles |
Goodwill
|
|
|
£'000 |
£'000 |
£'000 |
|
Cost |
|
|
|
|
As at 31 December 2022 |
3,617 |
209 |
83 |
|
Additions |
468 |
41 |
- |
|
As at 30 June 2023 |
4,085 |
250 |
83 |
|
Additions |
566 |
7 |
- |
|
As at 31 December 2023 |
4,651 |
257 |
83 |
|
Additions |
770 |
1 |
- |
|
As at 30 June 2024 |
5,421 |
258 |
83 |
|
|
|
|
|
|
Accumulated amortisation |
|
|
|
|
|
|
|
|
|
As at 31 December 2022 |
2,772 |
22 |
- |
|
Charge for the period |
268 |
20 |
- |
|
As at 30 June 2023 |
3,040 |
42 |
- |
|
Charge for the period |
292 |
32 |
- |
|
As at 31 December 2023 |
3,332 |
74 |
- |
|
Charge for the period |
351 |
29 |
- |
|
As at 30 June 2024 |
3,683 |
103 |
- |
|
|
|
|
|
|
Carrying amount |
|
|
|
|
As at 31 December 2022 |
845 |
187 |
83 |
|
As at 30 June 2023 |
1,045 |
208 |
83 |
|
As at 31 December 2023 |
1,319 |
183 |
83 |
|
As at 30 June 2024 |
1,738 |
155 |
83 |
|
Other intangible assets include assets valued at
Goodwill
On 11 March 2020 the Group acquired Aquis Stock Exchange Limited (formerly NEX Exchange Limited) which resulted in recognition of goodwill of
The goodwill arising on consolidation represents the growth potential of the primary listings exchange and the synergies with the rest of the business. AQSE has no intangible assets.
Management has considered indicators of impairment to the balance of goodwill and have noted no reason to conduct a detailed review. Therefore, the balance remains unchanged since and no impairment losses have been recognised to date.
11. Property, plant and equipment
|
Fixtures, fittings and equipment |
|
Computer Equipment |
|
Right of Use Assets |
|
Total |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
Cost |
|
|
|
|
|
|
|
As at 31 December 2022 |
492 |
|
2,991 |
|
4,239 |
|
7,722 |
Additions |
- |
|
44 |
|
13 |
|
57 |
As at 30 June 2023 |
492 |
|
3,035 |
|
4,252 |
|
7,779 |
Additions |
9 |
|
358 |
|
- |
|
367 |
As at 31 December 2023 |
501 |
|
3,393 |
|
4,252 |
|
8,146 |
Additions |
2 |
|
277 |
|
- |
|
279 |
As at 30 June 2024 |
503 |
|
3,670 |
|
4,252 |
|
8,425 |
|
|
|
|
|
|
|
|
Accumulated depreciation and impairment |
|
|
|
|
|
|
|
As at 31 December 2022 |
295 |
|
2,373 |
|
898 |
|
3,566 |
Charge for the period |
30 |
|
160 |
|
194 |
|
384 |
As at 30 June 2023 |
325 |
|
2,533 |
|
1,092 |
|
3,950 |
Charge for the period |
21 |
|
166 |
|
190 |
|
377 |
As at 31 December 2023 |
346 |
|
2,699 |
|
1,282 |
|
4,327 |
Charge for the period |
25 |
|
199 |
|
192 |
|
416 |
As at 30 June 2024 |
371 |
|
2,898 |
|
1,474 |
|
4,743 |
|
|
|
|
|
|
|
|
Carrying amount |
|
|
|
|
|
|
|
As at 31 December 2022 |
197 |
|
618 |
|
3,341 |
|
4,156 |
As at 30 June 2023 |
167 |
|
502 |
|
3,160 |
|
3,829 |
As at 31 December 2023 |
155 |
|
694 |
|
2,970 |
|
3,819 |
As at 30 June 2024 |
132 |
|
772 |
|
2,778 |
|
3,682 |
12. Investments in financial assets
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Financial assets measured at fair value through OCI |
592 |
|
592 |
|
- |
In August 2023 Aquis Exchange PLC acquired a 5.2% stake in OptimX LLC for consideration of
The fair value of OptimX, an unlisted-equity investment, falls within Level 3 of the IFRS 13 Fair Value hierarchy. On initial recognition management made the assessment to recognise movements in the fair value of the investment through Other Comprehensive Income as the investment is not held for trading.
Management has assessed the fair value at 30 June 2024 and there was no change in the investment's carrying value since the year end date.
In July 2024, after the period end, management invested a further
13. Trade and other receivables
|
Current |
||||
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Trade receivables net of impairment |
3,579 |
|
3,033 |
|
4,042 |
Technology licence contract assets |
2,492 |
|
3,030 |
|
1,830 |
Prepayments |
878 |
|
725 |
|
810 |
Other receivables |
148 |
|
107 |
|
118 |
|
7,097 |
|
6,895 |
|
6,800 |
|
|
|
|
|
|
|
Non-Current |
||||
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Trade receivables net of impairment |
5,352 |
|
5,451 |
|
3,758 |
Other receivables |
361 |
|
360 |
|
350 |
|
5,713 |
|
5,811 |
|
4,108 |
Trade and other receivables (continued)
Trade receivables are stated net of any credit impairment provision as set out previously in Note 3 in accordance with IFRS 9, as illustrated below:
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Gross trade receivables |
3,636 |
|
3,137 |
|
4,092 |
Expected credit loss on trade receivables |
(57) |
|
(104) |
|
(50) |
Gross contract assets |
9,712 |
|
10,845 |
|
6,603 |
Expected credit loss on contract assets |
(1,868) |
|
(2,364) |
|
(1,015) |
Receivables net of impairment |
11,423 |
|
11,514 |
|
9,630 |
14. Trade and other payables
|
15. Leases
The right-of use asset was measured at the amount equal to the lease liability, plus prepaid lease payments (being the unamortised portion of the rent deposit asset). The right of use asset is depreciated over the term of the lease and was accounted for during the period ended 30 June 2024 as follows:
Right of Use Asset |
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
Leases (continued)
Rent deposit asset The rent deposit asset (excluding the prepaid right of use portion which has been included in the calculation of the
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
After the period end, Lease Liability The lease liability is calculated as the net present value of the fixed payments (including in-substance fixed payments), less any lease incentives receivable (such as any rent-free periods). The lease payments are discounted using the interest rate implicit in the lease. The lease liability is measured at amortised cost and was accounted for during the period ended 30 June 2024 as follows:
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
The non-current and current portions of the lease liability are included in 'Lease liability' and 'Other Payables' (Trade and Other Payables) on the Statement of Financial Position respectively. |
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Leases (continued)
The finance income and finance expense arising from the Groups leasing activities as a lessee have been shown net where applicable as is permitted by IAS 32 where criteria for offsetting have been met.
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
16. Called up share capital
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
Ordinary share capital |
£'000 |
|
£'000 |
|
£'000 |
Issued and fully paid |
|
|
|
|
|
27,516,781 (01 July 2023: 27,516,781; 1 January 2023: 27,509,448) Ordinary shares of 10p each |
2,752 |
|
2,752 |
|
2,751 |
Issue of new shares following exercise of 7,333 EMI share options |
- |
|
- |
|
1 |
Issue of new shares following exercise of 47,000 EMI share options |
4 |
|
- |
|
- |
27,563,781 (31 December 2023: 27,516,781; 30 June 2023: 27,516,781) Ordinary shares of 10p each |
2,756 |
|
2,752 |
|
2,752 |
17. Share premium account
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Share premium |
|
|
|
|
|
At beginning of the period |
11,810 |
|
11,810 |
|
11,785 |
Issue of new shares following exercise of 7,333 EMI share options |
- |
|
- |
|
25 |
Issue of new shares following exercise of 47,000 EMI share options |
158 |
|
- |
|
- |
At end of the period |
11,968 |
|
11,810 |
|
11,810 |
18. Treasury shares
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
At beginning of period |
4,389 |
|
3,798 |
|
3,350 |
Purchase of treasury shares |
681 |
|
771 |
|
444 |
Shares vested or sold by trusts |
- |
|
(157) |
|
- |
Change in level of surplus cash held by trusts |
(1) |
|
(23) |
|
4 |
Treasury shares at close of period |
5,069 |
|
4,389 |
|
3,798 |
Treasury shares are held by the Employee Benefit Trusts. The Investment in Trust has been consolidated within the Group's results as the parent company (Aquis Exchange PLC) can substantially direct the investment activities of the Trusts, thus the Trusts' assets have been consolidated as Treasury Shares.
At 30 June 2024,
|
As at 30/06/2024 |
|
As at 31/12/2023 |
|
As at 30/06/2023 |
|
£'000 |
|
£'000 |
|
£'000 |
Treasury shares held |
5,052 |
|
4,372 |
|
3,757 |
Cash held in employee trusts |
17 |
|
17 |
|
41 |
At the end of the year |
5,069 |
|
4,389 |
|
3,798 |
19. Cash generated from operations
|
6 months ended 30/06/2024 |
|
Year ended 31/12/2023 |
|
6 months ended 30/06/2023
|
|
£'000 |
|
£'000 |
|
£'000 |
Profit before tax |
1,052 |
|
5,195 |
|
1,145 |
|
|
|
|
|
|
Adjustments for: |
|
|
|
|
|
Impairment (credit)/charge on contract assets |
(496) |
|
1,016 |
|
(332) |
Impairment (credit)/charge on trade and other receivables |
(47) |
|
45 |
|
5 |
Fair value adjustment to derivatives |
25 |
|
(51) |
|
40 |
Equity settled share-based payment expense |
589 |
|
1,086 |
|
507 |
Amortisation and impairment of intangible assets |
380 |
|
612 |
|
288 |
Depreciation and impairment of property, plant and equipment |
416 |
|
761 |
|
384 |
Finance expense |
40 |
|
103 |
|
54 |
Finance income |
(5) |
|
(16) |
|
(5) |
Interest income |
(296) |
|
(385) |
|
(169) |
|
|
|
|
|
|
Movement in working capital: |
|
|
|
|
|
Increase in trade and other receivables |
415 |
|
(4,278) |
|
(901) |
Increase in trade and other payables |
(544) |
|
309 |
|
114 |
|
|
|
|
|
|
Cash generated by operations |
1,529 |
|
4,397 |
|
1,130 |
|
|
|
|
|
|
Corporation taxes paid |
(120) |
|
(294) |
|
(219) |
Net cash flow from operating activities |
1,409 |
|
4,103 |
|
911 |
20. Other Reserves
|
£'000 |
As at 31 December 2022 |
1,813 |
Share-based payment expense for the 6-month period |
507 |
As at 30 June 2023 |
2,320 |
Share-based payment expense for the 6-month period |
422 |
As at 31 December 2023 |
2,742 |
Share-based payment expense for the 6-month period |
589 |
As at 30 June 2024 |
3,331 |
The reserves relating to share-based payments reflects the estimated value of the approved employee share option schemes, which include the EMI, CSOP, PPO and Restricted Share options. The valuation of the options granted is estimated using a US binomial or Black Scholes model. Also included in the share-based payment reserve are the treasury shares purchased by the Trust under the Share Incentive Plan.
21. Controlling party
In the opinion of the Directors there is no single overall controlling party. No individual shareholder had a shareholding of 10% or above as at 30 June 2024.
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