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Aquis Exchange PLC (AQX)

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Thursday 23 September, 2021

Aquis Exchange PLC

Interim Results

RNS Number : 6864M
Aquis Exchange PLC
23 September 2021
 

23 September 2021

Aquis Exchange PLC

("Aquis", the "Company" or the "Group")

 

Interim results for the six months ended 30 June 2021

Continued strong growth with EBITDA more than triple 1H20

 

Aquis Exchange PLC (AQX.L), the exchange services group, is pleased to announce its unaudited results for the six months ended 30 June 2021.

 

Highlights:

·

Revenue increased 37% to £6.7 million (1H20: £4.9 million)

·

EBITDA grew to £1.6 million (1H20: £0.5 million)

·

Pre-tax profit grew to £1.0 million (1H20: £0.0 million)

·

Cash and cash equivalents at 30 June 2021 of £13.9 million (30 June 2020: £11.2 million)

·

Membership of Aquis Exchange (AQX) grew to 39 (1H20: 31) and there was a 27% increase in the average monthly usage, in terms of chargeable orders (2Q 2021 vs 4Q 2020)

·

Market share of all pan-European trading significantly increased at 5.80% in 2Q21 (4.65% 4Q20, 4.56% 2Q20)

·

Overall share of available liquidity of 22%, the highest of any European MTF

·

Aquis Stock Exchange (AQSE) successfully integrated into the Group and multiple enhancements implemented, resulting in a record fourteen admissions completed during 1H21

 

Post-period highlights:

·

Currently tracking in line with market expectations for the full year

·

Achieved a new record monthly market share of pan-European trading of 6.2% in July 2021

 

Alasdair Haynes, Chief Executive Officer of Aquis, commented:

 

"We are delighted to announce that profits have continued to increase, reflecting the strong momentum maintained in revenue growth. This growth has been driven by our existing Members continuing to increase their trading volumes through our pan-European equity, lit market. The strength of our offering in this division is demonstrated by our having reached 5.80% of all pan-European secondary trading during 2Q21.

 

Following the completion of the acquisition of AQSE in March 2020 we introduced a number of strategic initiatives which have significantly improved liquidity, spreads and the overall attractiveness of the market. These changes have had a material effect on the number of companies admitted to trading with 14 new admissions during the first half, compared to three in 1H20.

 

While we anticipate the prevailing economic uncertainty will continue to impact market participants in the short to medium term, we have demonstrated we have the right model, team, technology and vision to deliver shareholder value and look to the future with confidence."

 

 

An overview of the results from Alasdair Haynes, CEO, is available to view on this link:

https://www.brrmedia.co.uk/broadcasts-embed/6149d6a43ae1ca74490b15c2/aqx/?popup=true

 

 

The Group will be hosting webinars for analysts and retail investors today at 9.00 and 13.00 respectively.

 

If you would like to register for the analyst webinar, please contact  [email protected]  . Investors who would like to attend the retail investor webinar can sign up to Investor Meet Company for free and add themselves to the meeting via  https://www.investormeetcompany.com/aquis-exchange-plc/register-investor  . Investors who have already registered will be automatically invited.

 

 

Enquiries:

 

Aquis Exchange PLC

Tel: +44 (0)20 3597 6321

Alasdair Haynes, CEO

 

Jonathan Clelland, CFO and COO

Belinda Keheyan, Head of Marketing

 

Tel: +44 (0)20 3597 6329

Liberum Capital Limited (Nominated Adviser and Broker)

Tel: +44 (0)20 3100 2000

Clayton Bush

 

Chris Clarke

 

Edward Thomas

Kane Collings

 

Canaccord Genuity Limited (Joint Broker)

Bobbie Hilliam

Patrick Dolaghan

 

 

 

 

Tel: +44 (0) 20 7523 8000

Alma PR (Financial PR Adviser)

Tel: +44 (0)20 3405 0209

Susie Hudson

Kieran Breheny

[email protected]

Faye Calow

 

     

 

 

Notes to editors:

 

Aquis Exchange PLC is an exchange services group, which operates pan-European cash equities trading businesses (Aquis Exchange/AQX), growth and regulated primary markets (Aquis Stock Exchange/AQSE) and develops/licenses exchange software to third parties (Aquis Technologies).

 

Aquis Exchange (AQX) is authorised and regulated by the UK Financial Conduct Authority and France's Autorité des Marchés Financiers to operate Multilateral Trading Facility businesses in the UK/Switzerland and in EU27 respectively. AQX operates lit order books and does not allow aggressive non-client proprietary trading, which has resulted in lower market impact and signalling risk on AQX than other trading venues in Europe. According to independent studies, trades on Aquis are less likely to lead to price movement than on other lit markets. AQX 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 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', with different levels of admission criteria. The Access market focuses on earlier stage growth companies, while Apex is the intended market for larger, more established businesses.

 

Aquis Technologies is the software and technology division of Aquis Exchange PLC. It creates and licenses cutting-edge, cost-effective matching engine and trade surveillance technology for banks, brokers, investment firms and exchanges.

 

Aquis Exchange PLC (AQX.L) is listed on the Alternative Investment Market of the LSE (AIM) market. For more information, please go to  www.aquis.eu

 

For more information, please go to www.aquis.eu and www.aquis.technology

 

 

Chief Executive Officer's Report

 

The six months to 30 June 2021 have been another strong period of growth as we build on the profits achieved during 2020. In addition, we have made good operational progress in all areas to help drive us towards our long-term goals. The fact that we have achieved all this amidst the continued challenging economic circumstances arising from the global Covid-19 pandemic demonstrates our strong operational resilience and the continued demand for our unique offering.

 

We are very pleased to have implemented our numerous planned enhancements for the AQSE market, and that these changes have been so well received by market participants.

 

Operational Review

 

Aquis continued to develop its three divisions throughout the period:

· Aquis Exchange (AQX): its pan-European lit equities market;

· Aquis Stock Exchange (AQSE): a primary listings market for small and mid-cap companies;

· Aquis Technologies: a multi-asset class technology licensing service to an international client base

 

The Group's Market Data income stream (generated through the sale of AQX and AQSE data) has also grown substantially during the period.

 

This has enabled us to continue our strong growth as synergies are developed and the business potential is harnessed.

 

We continue to invest in key personnel in all areas, including the recent appointments of David Stevens as Chief Revenue Office (CRO) in May 2021, and Richard Fisher as Director of Finance (DoF) earlier in the year. Both David and Richard have already demonstrated their value in the short time since they joined Aquis and we are confident that they will help accelerate our business development progress going forward. The strength, experience and commitment of our staff, who have continued to demonstrate an admirably flexible approach during the last six months, remain a key contributor to our success.

 

Covid-19 Update

 

As previously communicated, the Group had well-established remote working policies and disaster recovery plans, which were put into practice during 1H20 and which have enabled the remote market operations although Aquis has now implemented a partial flexible return to office working. Thanks to our focus on technology and in line with being a flexible and agile operation, we have continued to serve our clients effectively whilst also pushing ahead with key strategic initiatives.

 

During 1H21 trading levels have been close to historic averages compared to 1H20 where we saw in the early weeks of the pandemic greatly increased market volumes and volatility which had a short-term positive impact. It is difficult to predict equity market trading volumes in the medium to long term, however, our business model continues to show its strength and we are confident we have the right strategy in place to continue delivering significant growth over the long term.

 

A summary of progress across our divisions is outlined below.

 

The Exchanges

 

The performance of both Aquis Exchange and Aquis Stock Exchange has progressed well. Exchange revenue increased by £1.2m (33%) from £3.7 million to £4.9 million and the number of Members grew from 31 to 39. In addition, a number of Aquis Exchange Members increased their trading volumes materially, with a 27% increase in the average monthly usage, in terms of chargeable orders (2Q 2021 vs 4Q 2020). This resulted in increased monthly subscriptions. There are now nine Members using the top three subscription pricing tiers and 25 in the other five tiers, with five liquidity providers.

 

Issuer revenue also increased reaching £0.34m as the number of admissions on AQSE grew year on year.

 

As the business moves forward, we anticipate AQSE and AQX will become increasingly integrated, allowing Members to benefit from the Group's enlarged offering.

 

Aquis Exchange: Continued strong growth in the core business

 

Aquis Exchange (AQX) is the Group's pan-European lit secondary trading equities market. It comprises the UK MTF (AQXE) and the French MTF serving EU markets (AQXEU).

 

The key performance indicators of the Aquis Exchange business all grew during the period. Aquis Exchange's market share of all pan-European trading was 5.8% for 2Q21 (2Q20: 4.56%) and has averaged in excess of 6% during the period since the half year close, reflecting this positive performance.

 

The Company currently has an offering in excess of 1,700 stocks and ETFs across 15 European markets. This increase includes the resumption of the Swiss market at the beginning of February 2021 following the accord between the UK and Switzerland.  The Brexit transition was successfully managed, both during the transition period and thereafter, with a significant proportion of Exchange activity now being executed on AQXEU, the Group's French MTF serving EU markets.

 

Available liquidity on the exchange was at 22% in 1H21 (23% in 1H20) and it is expected this will continue to underpin future anticipated growth.

 

The recognition that Aquis Exchange's toxicity is materially lower than its competitors continues to grow amongst investment managers and the wider market. With several market drivers pushing market participants towards lower toxicity, the opportunity for Aquis Exchange to attract a wider membership from across Europe and to facilitate increased trading volumes remains significant.

 

Aquis Stock Exchange (AQSE): Substantial changes implemented drive momentum

 

AQSE is a modern market for modern businesses, bringing positive disruption and competition to the listed SME sector. As one of the only two existing options for growing SMEs looking to IPO in the UK, Aquis' vision is for AQSE to become the home for quality growth businesses, applying core Aquis values such as transparency and innovation.

 

AQSE has now delivered the four key actions which we believe will materially enhance the market:

 

Action

Purpose

Execution

Segmenting the market

Providing appropriate support throughout the growth cycle

Split the AQSE Growth market into two segments:

· Access

· Apex

Gaining greater institutional and asset manager support

Broadening the pool of available capital for issuers

13% growth in institutions that have publicly affirmed support for AQSE (1H21 vs 2H20)

Prohibiting short selling

Protecting issuers and investors

 

Short selling has been prohibited on the Apex market for 6 months

Enhanced trading mechanisms

Supporting greater liquidity

Since December 2020 and the introduction of innovative Market maker scheme:

· Spreads reduced 64%

· Value traded has increased >700%

 

We also entered into arrangements with Fregnan Ltd and Research Tree Ltd. to produce and publish research on AQSE's top-tier Apex stocks. Every Apex stock now has quantitative research on it, provided by Fregnan, available for free through the AQSE website. In addition, any existing fundamental research on Apex stocks is available through a dedicated Research Tree portal.

 

Fourteen admissions were completed during 1H21 compared to three during 1H20. All were well supported and there is a very strong pipeline of high growth and 'new economy' businesses in conversation with AQSE regarding IPO.

 

Revenue growth coupled with achieving the targeted cost synergies and savings has significantly reduced the loss generated by AQSE to just £0.1m for the period."

 

Aquis Technologies

Progress made on a number of projects

 

Aquis licenses its leading exchange-related technology through its Aquis Technologies division. Aquis Technologies creates and licenses technology for high volume, low latency trading platforms, complex connectivity solutions and real-time trade monitoring and surveillance systems for banks, brokers, investment firms and exchanges.

 

Aquis recognises license revenue on completion of project delivery in accordance with IFRS accounting statutes. During 1H21 progress was made on a number of projects; however, there were no completed projects during the period. As a result, Aquis Technologies' revenue (net of provision releases) decreased 25% to £0.6m (1H20: £0.8m).

 

The successful cloud technology Proof of Concept (PoC) has demonstrated the quality of the Aquis Technologies offering and has resulted in a number of new exchange platform prospects. Innovation is at the core of Aquis Technologies and we will be focused on furthering the growth of the Technologies division, developing its products and services to help its clients with the challenges they face and ensuring the high-performance systems continue to be enhanced.

 

Aquis Market Data

 

Aquis generates revenue from the sale of data derived from AQX (AQXE & AQXEU) and AQSE to non-Member market participants.

 

Revenue from market data vendors increased significantly by £0.7m, 187%, to £1.1m for the six month period compared to the 2020 equivalent. The harmonisation of Aquis Exchange (AQX) and Aquis Stock Exchange (AQSE) data pricing has contributed to this increase in data revenues.

 

Financial Review

 

Revenue increased 37% to £6.7m (1H19: £4.9m) and the EBITDA profit for the half year was £1.5m, three times the EBITDA profit of £0.5m generated in 1H20. This EBITDA profit and the profit before tax of £1.0m includes £0.2m of income recognised from an impairment credit per IFRS 9 consistent with the 1H20 impairment credit. The EBITDA profit growth is mainly attributable to increased exchange revenue and data revenue as Members' subscriptions have risen as a result of increased trading levels. The Group made some controlled increases in costs during 1H 2021 as it continued to invest in personnel and technological resources and the Group will continue to invest in the future to maintain the business' growth momentum.

 

The Group's cash and cash equivalents as at 30 June 2021 were £13.9 million (30 June 2020: £11.2 million), demonstrating its continued focus on careful cash management.

 

Summary and Outlook

 

Our strategic goal remains to become one of the leading exchange services groups through delivering best-in-class exchange trading opportunities, underpinned by our commitment to first class client service, transparency, simplicity and best-in-class technology. To this end, our investment in R&D will help improve the trading experience for clients, as well as improving our market position and providing further growth and value creation for shareholders. We continue to make significant investment in our technology, sales and marketing activities, in particular in cloud technology, to support our long-term growth across all activities.

 

Alongside this we are working to enhance our software licensing activities and build presence internationally. We are pleased to have made significant progress on a number of material technology contracts post-period end that will support the second half performance and into FY22.

 

Looking forward, our focus continues to be on executing on our core growth strategy; increasing trading volumes and improving fundraising prospects for small and mid-cap companies. Notwithstanding the macroeconomic uncertainty, current trading is tracking in line with market expectations for the full year.

 

We have built good momentum over the past few years, despite facing numerous challenges along the way. This demonstrated the strength of our team and our offering, and I am excited to see what we can achieve across the next six months.

 

 

Alasdair Haynes

Chief Executive Officer

 

 

 

 

AQUIS EXCHANGE PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2021

 

 

 

 

6 months ended 30/06/2021

 

Year ended 31/12/2020

 

6 months ended 30/06/2020

 

Note

 

£'000

 

£'000

 

£'000

Income Statement

 

 

 

 

 

 

 

Revenue

3

 

6,687

 

11,477

 

4,851

Impairment credit/(charge)

4

 

178

 

(100)

 

183

Administrative expenses

 

 

(5,299)

 

(9,856)

 

(4,497)

Operating profit

 

 

1,566

 

1,521

 

537

Investment income

5

 

-

 

15

 

14

Depreciation and amortisation

7,8

 

(543)

 

(1,030)

 

(522)

Net finance costs

18

 

(15)

 

(35)

 

(17)

Profit before taxation

 

 

1,008

 

471

 

12

Income tax credit

 

 

-

 

307

 

-

Deferred tax

 

 

-

 

204

 

-

Profit for the six months/year

 

 

1,008

 

982

 

12

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

Foreign exchange differences on translation of foreign operations, net of tax

17

 

4

 

(1)

 

4

Other comprehensive loss for the year

 

4

 

(1)

 

4

 

 

 

 

 

 

 

 

Total comprehensive profit for the year

 

1,012

 

981

 

16

 

 

 

 

 

 

 

 

Earnings per share (pence)

6

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

Ordinary shares

 

 

3.7

 

3.6

 

0

Diluted

 

 

 

 

 

 

 

Ordinary shares

 

 

3.5

 

3.4

 

0

 

The consolidated statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

 

 

AQUIS EXCHANGE PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

 

 

 

 

6 months ended 30/06/2021

 

Year ended 31/12/2020 (Restated)

 

6 months ended 30/06/2020 (Restated)

 

Note

 

£'000

 

£'000

 

£'000

Assets

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Goodwill

7

 

83

 

83

 

-

Intangible assets

7

 

792

 

916

 

815

Property, plant and equipment

8

 

1,315

 

1,579

 

1,612

Deferred tax asset

10

 

204

 

204

 

-

Trade and other receivables

9

 

915

 

840

 

947

 

 

 

3,309

 

3,622

 

3,374

Current assets

 

 

 

 

 

 

 

Trade and other receivables

9

 

3,696

 

2,924

 

2,742

Cash and cash equivalents

 

 

13,860

 

12,268

 

11,182

 

 

 

17,556

 

15,192

 

13,924

 

 

 

 

 

 

 

 

Total assets

 

 

20,865

 

18,814

 

17,298

Liabilities

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

11

 

2,827

 

2,846

 

2,329

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Lease liabilities

18

 

953

 

995

 

1,092

Total liabilities

 

 

3,780

 

3,806

 

3,421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets

 

 

17,085

 

14,973

 

13,877

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Called up share capital

12

 

2,749

 

2,717

 

2,717

Share premium account

13

 

11,738

 

10,892

 

10,892

Other reserves

14

 

1,055

 

761

 

476

Treasury shares

16

 

(561)

 

(490)

 

(409)

Retained earnings/accumulated losses

15

 

2,100

 

1,092

 

197

Foreign currency translation reserve

17

 

4

 

1

 

4

Total equity

 

 

17,085

 

14,973

 

13,877

 

 

 

The notes to the financial statements on pages 6 to 16 form an integral part of these financial statements. The interim financial statements were approved by the board of directors and authorised for issue on 23 September 2021 and are signed on its behalf by:

 

J Clelland

Director

 

A Haynes

Director

 

 

 

AQUIS EXCHANGE PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2021

 

 

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 2020 (Restated)

 

2,715

 

10,840

 

378

 

 

(328)

 

146

 

 

1

 

13,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the 6-month period ended 30/06/2020

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

12

 

 

Issue of new shares

 

2

 

52

 

 

 

 

 

 

 

 

 

 

 

54

 

Movement in share option reserve

 

 

 

 

137

 

 

 

 

 

 

 

 

137

Movement in treasury shares (Restated)

 

 

 

 

 

 

 

(81)

 

 

 

 

 

 

(81)

Foreign exchange differences on translation of foreign operations

 

 

 

 

 

 

 

 

 

 

3

 

 

3

Balance at 30 June 2020

 

2,717

 

10,892

 

515

 

 

(409)

 

158

 

 

4

 

13,877

 

Profit for the 6 month period ended

31/12/2020

 

 

 

 

 

 

969

 

 

 

 

969

Movement in share option reserve

 

 

 

 

 

246

 

 

 

 

 

 

 

 

246

Movement in treasury shares

 

 

 

 

 

(81)

 

 

 

 

 

(81)

Foreign exchange differences on

translation of foreign operations

 

 

 

 

 

 

 

 

 

(3)

 

 

(3)

Post audit adjustments

 

 

 

 

 

 

 

(35)

 

 

 

(35)

Balance at 31 December 2020 (Restated)

2,717

 

10,892

 

761

 

 

(490)

 

 

1,092

 

 

1

 

14,973

 

Profit for the 6-month period ended

30/06/2021

 

 

 

 

 

 

1,008

 

 

 

 

1,008

 

Issue of new shares

12,13

32

 

846

 

 

 

 

 

 

 

 

 

 

878

 

Movement in share option reserve

14

 

 

 

 

294

 

 

 

 

 

 

 

 

 

294

 

Movement in treasury shares

16

 

 

 

 

 

 

 

 

(71)

 

 

 

 

 

 

 

(71)

 

Foreign exchange differences on translation of foreign operations

17

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

3

Balance at 30 June 2021

 

2,749

 

11,738

 

1,055

 

 

(561)

 

 

2,100

 

 

4

 

17,085

                  
 

 

AQUIS EXCHANGE PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2021

 

 

 

 

Note

6 months ended 30/06/2021
£'000

 

Year ended 31/12/2020
£'000

 

6 months ended 30/06/2020
£'000

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

Cash generated/absorbed by operations

19

 

1,215

 

2,130

 

 

568

 

Tax refunded

 

 

-

 

308

 

-

 

Finance expense on lease liabilities

18

 

(15)

 

 

(35)

 

 

(17)

 

Net cash inflow from operating activities

 

1,200

 

2,403

 

 

551

 

 

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

 

Recognition of intangible assets

7

 

(154)

 

 

(643)

 

 

(311)

 

Purchase of property, plant and equipment

8

 

(163)

 

 

(115)

 

 

(44)

 

Purchase of treasury shares

 

16

(71)

 

-

 

-

 

Investment in subsidiaries

 

 

-

 

(259)

 

-

 

Interest received

 

5

-

 

15

 

14

 

Net cash used in / generated by investing activities

(388)

 

(1,002)

 

(341)

 

 

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

 

Proceeds from share issue

12,13

 

878

 

54

 

54

 

Principal portion of lease liability

18

(101)

 

(195)

 

(98)

 

Net cash (used in)/ generated by financing activities

777

 

(141)

 

(44)

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

1,589

 

1,258

 

167

Cash and cash equivalents at the beginning of the period

12,268

 

11,011

 

11,011

Effect of exchange rate changes on cash and cash equivalents

3

 

(1)

 

4

Cash and cash equivalents at the end of the period

13,860

 

12,268

 

11,182

 

 

 

AQUIS EXCHANGE PLC

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 2021 and ending 30 June 2021 ("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 2020 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 changes in the current reporting period

The financial position and performance of the Company was not affected by any specific events and transactions during the six months to 30 June 2021. However, it is worth noting the following:

· At the beginning of the year, a significant percentage of trading of European securities moved to the Aquis European platform, Aquis Exchange Europe SAS. The subsidiary is based in Paris, France and is regulated by the Autorité de Contrôle Prudentiel et de Resolution (ACPR) and the Autorité des Marchés Financiers (AMF).  This followed the outcome of trade negotiations between the UK and the European Union, which failed to result in the acknowledgement of financial services equivalence between the two jurisdictions. It is anticipated that financial services equivalence is unlikely to be recognised and the majority of trading in EU securities will remain in Paris. This has not yet had a significant impact on the financial position or performance of the Company, however the lack of equivalence and resulting changes in the regulatory landscape are likely to present new challenges and opportunities for the Company.

3.  Revenue

An analysis of the Group's revenue is as follows:

 

6 months ended 30/06/2021

 

Year ended 31/12/2020

 

6 months ended 30/06/2020

 

£'000

 

£'000

 

£'000

Exchange Fees

4,899

 

7,738

 

3,682

Licence Fees

379

 

2,320

 

607

Issuer Fees

340

 

524

 

189

Data Vendor Fees

 

6,687

11,477

4,851


AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

4.  Expected credit loss

The expected credit loss on licensing contract assets has been calculated in accordance with IFRS 9: 

 

5.  Investment income

 

6 months ended 30/06/2021

 

Year ended 31/12/2020

 

6 months ended 30/06/2020

 

£'000

 

£'000

 

£'000

Interest income on bank deposits

0

 

15

 

14

 

6.  Earnings per share

 

6 months ended 30/06/2021

 

Year ended 31/12/2020

 

6 months ended 30/06/2020

 

 

 

 

 

 

Number of Shares ('000)

 

 

 

 

 

Weighted average number of ordinary shares for basic earnings per share

27,197

 

27,164

 

27,158

Weighted average number of ordinary shares for diluted earnings per share

28,638

 

28,281

 

28,043

Earnings (£'000)

 

 

 

 

 

Profit for the period from continued operations

1,008

 

982

 

12

Basic and diluted earnings per share (pence)

 

 

 

 

 

Basic earnings per ordinary share

 

3.7

 

 

3.6

 

 

0

Diluted earnings per ordinary share

3.5

 

3.4

 

0

 

 

 

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

7.  Intangible assets

 

 

 

 

Group Developed Trading Platforms

 

£'000

 

 

 

Goodwill

 

£'000

 

 

 

 

 

 

Cost

 

 

 

 

 

As at 31/12/2019

 

 

 

2,055

-

Additions- internally generated (Restated)

 

 

 

311

83

As at 30/06/2020 (Restated)

 

 

 

2,366

83

Additions- internally generated

 

 

 

332

-

As at 31/12/2020

 

 

 

2,698

83

Additions- internally generated

 

 

 

154

-

 

As at 30/06/2021

 

 

 

 

2,852

 

83

 

 

 

 

 

 

Accumulated amortisation and impairment

 

 

 

 

 

 

 

 

 

 

 

As at 31/12/2019

 

 

 

1,302

-

Charge for the period

 

 

 

249

-

As at 30/06/2020

 

 

 

1,551

-

Charge for the period

 

 

 

231

-

As at 31/12/2020

 

 

 

1,782

-

Charge for the period

 

 

 

278

-

As at 30/06/2021

 

 

 

2,060

-

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

As at 31/12/2019

 

 

 

753

-

As at 30/06/2020 (Restated)

 

 

 

815

83

As at 31/12/2020

 

 

 

916

83

 

As at 30/06/2021

 

 

 

 

792

 

83

 

 

 

 

 

 

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

8.  Property, plant and equipment

 

Fixtures, fittings and equipment

 

Computer Equipment

 

Non-current portion of IFRS 16 leased assets

 

Total

 

£'000

 

£'000

 

£'000

 

£'000

Cost

 

 

 

 

 

 

 

As at 31/12/2019

249

 

2,097

 

1,271

 

3,617

Additions & disposals

-

 

44

 

-

 

44

As at 30/06/2020

249

 

2,141

 

1,271

 

3,661

Additions & disposals

3

 

70

 

-

 

73

As at 31/12/2020

252

 

2,211

 

1,271

 

3,734

Additions & disposals

 

 

 

As at 30/06/2021

252

 

2,374

 

1,271

 

3,897

 

 

 

 

 

 

 

 

Accumulated depreciation and impairment

 

 

 

 

 

 

 

As at 31/12/2019

127

 

1,476

 

173

 

1,776

Charge for the period

25

 

161

 

87

 

273

As at 30/06/2020

152

 

1,637

 

260

 

2,049

Charge for the period

26

 

167

 

86

 

279

As at 31/12/2020

178

 

1,804

 

346

 

2,328

Charge for the period

 

 

 

As at 30/06/2021

203

 

1,946

 

433

 

2,582

 

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

 

As at 31/12/2019

122

 

621

 

1,098

 

1,841

As at 30/06/2020

97

 

504

 

1,011

 

1,612

As at 31/12/2020

 

 

 

As at 30/06/2021

49

 

428

 

838

 

1,315

 

 

 

 

 

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

9.  Trade and other receivables

 

Current

 

As at 30/06/2021

 

As at 31/12/2020

 

As at 30/06/2020

 

£'000

 

£'000

 

£'000

Trade receivables net of impairment

2,918

 

2,633

 

2,204

Prepayments

598

 

279

 

340

Other receivables

180

 

3,696

2,924

2,742

 

 

 

 

 

 

 

Non-Current

 

As at 30/06/2021

 

As at 31/12/2020

 

As at 30/06/2020

 

£'000

 

£'000

 

£'000

Trade receivables net of impairment

690

 

618

 

729

Other receivables

225

 

915

840

947

 

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 30/06/2021

 

As at 31/12/2020

 

As at 30/06/2020

(Restated)

 

£'000

 

£'000

 

£'000

Gross trade receivables

3,957

 

3,777

 

3,283

Expected credit loss

(349)

(350)

Trade receivables net of impairment

3,608

3,251

2,933

 

Impairment includes the expected credit loss on licencing contract assets stated in Note 4.

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

10.  Deferred tax asset

A deferred tax asset was recognised in the year ended 31 December 2020, due to the Group becoming profitable for the first time. The Group is expected to continue to be profitable in future years, with the value of the deferred tax asset to be reassessed annually at year end. 

 

As at 30/06/2021

 

As at 31/12/2020

 

As at 30/06/2020

 

£'000

 

£'000

 

£'000

Deferred tax asset

204

204

-

 

11.  Trade and other payables

 

As at 30/06/2021

 

As at 31/12/2020 (Restated)

 

As at 30/06/2020

 

 

 

 

Trade payables

264

 

263

 

90

 

 

Accruals

1,063

 

1,560

 

968

 

 

Social security and other taxation

190

 

427

 

370

 

 

Deferred revenue

935

 

432

 

709

 

 

Other payables

375

 

164

 

192

 

 

 

2,827

 

2,846

 

2,329

 

 

 

 

 

 

 

12.  Called up share capital

 

 

As at 30/06/2021

 

As at 31/12/2020

 

As at 30/06/2020

 

£'000

 

£'000

 

£'000

Ordinary share capital

 

 

 

 

 

Issued and fully paid

 

 

 

 

 

27,149,559 Ordinary shares of 10p each

2,717

 

2,715

 

2,715

Issue of new shares following exercise of 323,267 EMI share options

32

 

-

 

-

Issue of new shares following exercise of 20,137 EMI share options

-

 

2

 

2

Ordinary share capital

2,749

 

2,717

 

2,717

 

 

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

13.  Share premium account

 

As at 30/06/2021

 

As at 31/12/2020

 

As at 30/06/2020

 

£'000

 

£'000

 

£'000

Share premium

 

 

 

 

 

At beginning of year

10,892

 

10,840

 

10,840

Issue of new shares following exercise of 323,267 EMI share options

846

 

-

 

-

Issue of new shares following exercise of 20,137 EMI share options

-

 

52

 

52

Share premium

11,738

 

10,892

 

10,892

 

14.  Other Reserves

 

£'000

 

 

As at 31/12/2019 (Restated)

378

Share-based payment expense for the 6-month period ended 30/06/2020 (Restated)

137

As at 31/06/2020 (Restated)

515

Share-based payment expense for the 6-month period ended 31/12/2020

246

As at 31/12/2020

761

Share-based payment expense for the 6-month period ended 30/06/2020

294

As at 30/06/2021

1,055

 

The reserves relating to share-based payments reflects the estimated value of the approved employee share option schemes, which include the EMI, CSOP 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.

 

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

15.  Retained earnings

 

£'000

 

 

As at 31/12/2019

146

Profit for the 6-month period ended 30/06/2020

12

As at 31/06/2020

158

Profit for the 6-month period ended 30/12/2020

969

Post audit adjustments1

(35)

As at 31/12/2020 (Restated)

1,092

Profit for the 6-month period ended 30/06/2021

1,008

As at 30/06/2021

2,100

1 These relate to separate adjustments that were posted in Aquis Stock Exchange Limited (£24k) and Aquis Exchange Europe SAS (£11k) after the Group audit had concluded. The adjustments affect the Group prior year retained earnings and trade payables balances.  

16.  Treasury shares

Treasury shares are purchased by a Trust under the employee Share Employee Plan. The Trust is consolidated within the Group financial statements and the value of the shares held at the balance sheet date is shown below.

 

As at 30/06/2021

 

As at 31/12/2020

 

As at 30/06/2020 (Restated)

 

£'000

 

£'000

 

£'000

Share premium

 

 

 

 

 

At beginning of year

490

 

328

 

328

Purchase of treasury shares

71

 

162

 

81

Treasury shares

561

 

490

 

409

 

17.  Foreign currency translation reserve

The translation of the European subsidiary into the functional currency of the group results in foreign exchange differences that have been recognised in Other Comprehensive Income ('OCI') for the group which have been accumulated in a separate component of equity as illustrated below.

 

 

6 months ended 30/06/2021

 

Year ended 31/12/2020

 

6 months ended 30/06/2020

 

£'000

 

£'000

 

£'000

At the beginning of the year/period

1

 

4

 

1

Foreign exchange differences on translation of foreign operations recognised in OCI

3

 

(3)

 

3

At the end of the year/period

4

 

1

 

4

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

18.  IFRS 16 Leases

 

 

 

 

 

 

 

 

The impact on the Groups assets and liabilities, and the related effects on profit and loss, of the Groups leasing activities

(the Group as a lessee) are detailed below.

 

 

 

 

 

 

 

 

Right of Use Asset

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property

 

£

Carrying amount at 1 January 2020

1,271

Depreciation for the period

(87)

Carrying amount at 30 June 2020

1,184

Depreciation for the period

(86)

Carrying amount at 31 December 2020

1,098

Depreciation for the period

(87)

Carrying amount at 30 June 2021

1,011

Of which are:

 

Current

173

Non-current

838

 

1,011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rent deposit asset

 

 

 

Rent deposit asset

 

£

Carrying amount at 1 January 2020

222

Finance income on rent deposit asset for the period

3

Carrying amount at 30 June 2020

225

Finance income on rent deposit asset for the period

4

Carrying amount at 31 December 2020

229

Finance income on rent deposit asset for the period

3

Carrying amount at 30 June 2021

232

Of which are:

 

Current

7

Non-current

225

 

232

 

 

  
 

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

 

Lease liability

 

 

 

Lease liability

 

£

Carrying amount at 1 January 2020

1,378

Finance expense on lease liability for the period

21

Lease payments made during the period

(115)

Carrying amount at 30 June 2020

1,284

Finance expense on lease liability for the period

21

Lease payments made during the period

(115)

Carrying amount at 31 December 2020

1,190

Finance expense on lease liability for the period

18

Lease payments made during the period

(116)

Carrying amount at 30 June 2021

1,092

Of which are:

 

Current

139

Non-current

953

 

 1,092

 

 

 

 

Net finance expense on leases

 

 

6 months ended 30/06/2021

Year ended 31/12/2020

6 months ended 30/06/2020

 

£

£

£

Finance expense on lease liability

18

42

21

Finance income on rent deposit asset

(3)

(7)

(3)

Net finance expense relating to leases

15

35

18

 

 

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.

 

 

Amounts recognised in profit and loss

 

 

6 months ended 30/06/2021

Year ended 31/12/2020

6 months ended 30/06/2020

 

£

£

£

Depreciation expense on right-of-use assets

(87)

(173)

(87)

Finance expense on lease liability

(18)

(42)

(21)

Finance income on rent deposit asset

3

7

3

Net impact of leases on profit or loss

(102)

(208)

(105)

 

 

 

 

AQUIS EXCHANGE PLC

NOTES TO THE FINANCIAL STATEMENTS (continued)

The total cash outflow for leases amounted to £115k in the 6 months to 30th June 2021.

 

19.  Cash generated from operations

 

6 months ended 30/06/2021

 

Year ended 31/12/2020

 

6 months ended 30/06/2020

(Restated)

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Profit after tax

1,008

 

982

 

12

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

Taxation

-

 

(307)

 

-

Deferred tax

-

 

(204)

 

-

Investment revenue

-

 

(15)

 

(14)

Amortisation and impairment of intangible assets

278

 

480

 

249

Depreciation and impairment of property, plant and equipment

254

 

550

 

273

Equity settled share-based payment expense

294

 

393

 

98

Other gains/losses

39

 

40

 

(29)

 

 

 

 

 

 

Movement in working capital:

 

 

 

 

 

 

 

 

 

 

 

Increase in trade and other receivables

(674)

 

(1,100)

 

(850)

Increase in trade and other payables

16

 

1,311

 

829

 

 

 

 

 

 

Cash generated/ (absorbed) by operations

1,215

 

2,130

 

568

 

 

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