TIDMAQX
RNS Number : 5119M
Aquis Exchange PLC
17 September 2019
17 September 2019
Aquis Exchange PLC
("Aquis", the "Company" or the "Group")
Interim results for the six months ended 30 June 2019
Continued strong growth demonstrates successful execution of the
strategy
Aquis Exchange PLC (AQX.L) is pleased to announce its unaudited
results for the six months ended 30 June 2019.
Highlights:
-- Revenue increased 165% to GBP3.4 million (HY 2018(1) : GBP1.3
million)
-- EBITDA(2) loss of GBP0.16 million (HY 2018(3) : GBP1.6 million
loss)
-- Cash and cash equivalents at 30 June 2019 of GBP11.2 million
(30 June 2018: GBP13.1 million)
-- Trading Members on Aquis Exchange grew from 27 to 29 during
the six month period
-- Market share of overall pan-European continuous trading grew
over the period to 4.8% 2Q19 (3.8% 4Q18), with the share of
available liquidity also increasing
-- Through its French subsidiary, Aquis became the first MTF
to achieve dual-trading status in European equities, in preparation
for Brexit
-- Successful deployment of several technology implementations
-- Revenue increased 165% to GBP3.4 million (HY 2018(1) : GBP1.3
million)
Post-period highlights:
-- Agreed acquisition of the NEX Exchange subject to FCA approval,
marking entry into Primary Listings
-- Current trading in line with market expectations for the full
year
(1) HY 2018 restated for the application of accounting standards
IFRS 15 and IFRS 9
(2) Includes the application of the new accounting standard IFRS
16: Leases
(3) HY 2018 excludes exceptional costs relating to the IPO
Alasdair Haynes, Chief Executive Officer of Aquis,
commented:
"We are pleased to report on another strong period of growth,
demonstrating the growing acceptance of our unique,
subscription-based pricing model for trading. Revenue grew 165%
year-on-year, and our average market share increased once again, to
4.8% of all continuous European equity trading, despite having
faced a number of external headwinds. Growth is being driven by our
existing Members increasing their trading volumes through the
Exchange, new Members joining and increased technology licensing
revenue. Following the approval in January for our French MTF, we
became the first UK MTF to be 'Brexit-ready', underling the agility
of our business and commitment to our Members.
"We were delighted to announce in July our agreement to acquire
the NEX Exchange, marking our intention to enter the primary
listings market, taking us another significant step forward towards
achieving our ambition to become the leading exchange services
group in Europe.
"While we anticipate the current political and economic
uncertainty will continue to impact market participants in the
short to medium term, we have proven we have the right model, team,
technology and vision to deliver shareholder value and look to the
future with confidence."
This announcement contains inside information for the purposes
of EU Regulation 596/2014.
Enquiries:
Aquis Exchange PLC Tel: +44 (0) 20 3597
6321
Alasdair Haynes, CEO
Jonathan Clelland, CFO and COO Tel: +44 (0)20 3597
Belinda Keheyan, Head of Marketing 6329
Liberum Capital Limited (Nominated Adviser Tel: +44 (0) 20 3100
and Broker) 2000
Clayton Bush
Chris Clarke
Edward Thomas
Kane Collings
Alma PR (Financial PR Adviser) Tel: +44 (0)20 3405
0209
Rebecca Sanders-Hewett aquis@almapr.co.uk
Caroline Forde
Susie Hudson
Notes to editors:
Aquis Exchange PLC is an exchange services group, which operates
a pan-European cash equities trading business (Aquis Exchange) and
develops and licenses exchange software to third parties (Aquis
Technologies).
Aquis Exchange PLC (AQX.L) is quoted on the London Stock
Exchange's Alternative Investment Market (AIM).
Aquis Exchange 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 and in
EU27 respectively.
Aquis operates a lit order book and does not permit aggressive
non-client proprietary trading, which has resulted in lower
toxicity and signalling risk on Aquis 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. Aquis
applies 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 security that they execute. This
model can significantly reduce the cost of trading.
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.
For more information, please go to www.aquis.eu and
www.aquis.technology
Chief Executive Officer's Report
The six months to 30 June 2019 have been another strong period
of growth for the Group, achieved against the backdrop of low
trading volumes globally. When Aquis listed just over a year ago,
we set out our ambitions clearly and mapped out the roadmap we
would follow to achieve our goals. I am very pleased to report that
it is through the continued execution of this strategy that we have
again been able to deliver robust growth, despite having faced a
number of external headwinds. While we anticipate the political and
economic uncertainty will continue to impact market participants
through the remainder of the year, we have proven we have the right
model, team, technology and vision to deliver increased shareholder
value in the years ahead.
Revenue grew 165% year-on-year, and we again saw average market
share of all European equity trading increase to 4.8% (2Q19) from
3.8% (4Q18). Our total number of Members grew to 29.
This continued success is being driven by an enhanced
recognition of the Aquis model. We are committed to providing our
customers with a comprehensive lit equity trading platform with
significant liquidity and the lowest levels of toxicity in Europe.
We have seen our reputation as a disruptor and innovator in the
industry continue to increase, with the Aquis brand and our
philosophy to support the end investor becoming increasingly
recognised.
We were very pleased to announce in January that our
wholly-owned French subsidiary, Aquis Exchange Europe, received
approval from the relevant French authorities to operate an MTF in
Paris. The MTF is now operational, providing Aquis with the means
to continue to provide stock trading services to our Members across
Europe following the UK's planned departure from the European
Union, whichever form it takes. We were the first MTF to be able to
offer dual trading in European equities, underlining our commitment
to ensuring the orderly functioning of our markets, and dedication
to providing first-class, uninterrupted services to our
customers.
Alongside the continued execution of our current strategy, Aquis
has capitalised on several new opportunities to bolster our growth.
Undoubtably, the most exciting of these is the acquisition of the
NEX Exchange Ltd, which we announced on 5 July 2019. The
acquisition is another step in Aquis' ambition to become the
leading exchange services group in Europe and provides a unique
opportunity to acquire an RIE business with a focus on primary
markets in a cost and time effective manner. The acquisition is
subject to FCA approval and is expected to complete in autumn
2019.
Operational Review
Throughout the period, Aquis continued to develop its principal,
complementary business activities; its pan-European equity lit
market; a multi-asset class technology licensing service to an
international client base; and a market data offering.
A key factor that contributed to the development of the business
activities was the strength, experience and commitment of our
staff. A summary of progress in each business activity is outlined
below.
Aquis Exchange
The Company currently offers clients the ability to trade in
excess of 1,400 stocks and ETFs across 13 European markets. This
has decreased in number following the cessation of equivalence with
the Swiss market. Aquis has seen minimal impact on its revenues
from this, and our intention is to re-enter the Swiss market once
the regulatory position is clarified.
The key performance indicators of the exchange business all
increased during the period. Average market share grew from 3.8% at
the end of 2018 to 4.8%, number of Members grew from 27 to 29, and
Exchange revenue increased from GBP1.2 million to GBP2.7 million.
In addition, a number of Members increased their trading volumes
resulting in increased monthly subscriptions. This is particularly
pleasing against the backdrop of overall lower trading volumes,
which decreased 16% in HY 2019 versus HY 2018.
The available liquidity increased and should underpin the 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 the
Exchange to attract a wider membership from across Europe and to
facilitate increased trading volumes remains significant. These
market drivers include Best Execution obligations brought in by
MiFID II, which we believe have yet to be fully implemented and
therefore their full impact, alongside other regulatory reviews,
remain outstanding. During the period we launched the Aquis
Exchange RTS 27 analytics tool, which provides comparable liquidity
and execution data from some 20 execution venues and is intended to
provide greater transparency and investor protection. In addition,
in August, post period end, we launched our closing auction
product, Market-at-Close, which we anticipate will offer a
significant beneficial effect to the market.
Aquis Technologies
Aquis licenses its leading exchange related technology through
its Aquis Technologies division. Aquis Technologies creates and
licenses high volume, low latency trading platforms, complex
connectivity solutions and real-time trade monitoring and
surveillance technology for banks, brokers, investment firms and
exchanges.
Aquis Technologies licensing and support revenue grew to GBP0.7m
in the first half of the year, from GBP0.09m in HY 2018. The
Company successfully delivered a number of implementations across a
variety of asset classes, mandated in previous periods.
Over the next two years Aquis will be focused on continuing to
grow the Technologies division, developing our products and
services to help our clients with the challenges they face and
ensuring the high-performance systems continue to be enhanced.
Aquis Market Data
From 1 July 2018, the Company began charging market data vendors
for data from Aquis Exchange. While this is not yet a significant
revenue stream for the Group, we believe it will become meaningful
over time, as it is for the national exchanges. We believe an
important driver for the division is the potential mandate of a
Consolidated Tape System, or equivalent across Europe. ESMA and the
European Commission have both indicated the subject of a
Consolidated Tape is under consideration. In July ESMA launched a
public consultation on the development in prices for pre and
post-trade data and on the post-trade Consolidated Tape for equity
instruments. We continue to watch these developments with
interest.
Financial Review
The EBITDA loss for the half year, before exceptional items and
after the adoption of IFRS 16, decreased to GBP0.16m compared to a
loss of GBP1.6m in the comparative period of the previous year
(after exceptional items: GBP0.16m loss compared to a loss of
GBP2.9m in the comparative period of the previous year). This is
mainly attributable to increased exchange revenue as Members'
subscriptions have risen as a result of increased trading levels
and new revenue from technology licensing offset by additional
costs as the Company continues to invest in personnel and
technological resources.
The loss reflects the effect of adopting IFRS 15 accounting for
licensing contracts and IFRS 9 impairment provisions on trade
receivables and contract assets since FY 2018. The application of
these standards has resulted in an impairment release (credit)
during the period of GBP120,000 (HY 2018: GBP295,000 release). IFRS
16 has been applied, but it has not had a material impact on
costs.
The Company's cash and cash equivalents as at 30 June 2019 were
GBP11.2 million (30 June 2018: GBP13.1 million).
Market developments
Aquis operates in a dynamic global industry where we will
continue to see both new challenges and opportunities ahead. The
Company continues to perform strongly, notwithstanding the
ever-evolving macroeconomic, regulatory and political environment
we are operating in. Brexit uncertainty and other global
macro-economic factors continue to weigh on decision-making, and it
is clear that it is impacting market volumes as well as putting
pressure on our industry.
Whilst remaining mindful of market challenges, we believe in the
long term our philosophy of fairness, transparency and simplicity
will prove a winning formula. We are convinced Aquis has the
ability to disrupt the industry and that one day all trading will
be in its image. The business is well positioned to benefit from
regulatory changes which support transparent, low toxicity growth
on "lit" markets. The regulatory trends and institutional support
for greater transparency in European equities trading also supports
future business growth.
Acquisition of NEX Exchange
On 5 July 2019, post the period end, we were delighted to
announce that we had agreed to acquire NEX Exchange Limited ("NEX
Exchange") from CME Group Inc. for a cash consideration of GBP1,
plus approximately GBP2.7 million based on NEX Exchange's current
working capital levels. We believe that our proven expertise in
both building new businesses in the exchange industry and also
increasing liquidity, mean we have the ability to transform NEX
Exchange, addressing the current issues in small and mid-cap
trading, at a time when MiFID II implications and other factors
make the industry ripe for innovation. Completion of the
Acquisition is expected later this autumn, subject to FCA approval,
and we look forward to updating shareholders on our plans for NEX
Exchange at that time.
Outlook
Our strategic goal is to become the leading exchange services
group in Europe through delivering best in class exchange trading
opportunities, underpinned by our commitment to first class client
services. Looking forward, our focus continues to be on executing
on our core growth strategy; increasing Members numbers and trading
volumes.
Alongside this we are working to enhance our software licensing
activities and build presence in Europe through our subsidiary in
Paris.
Following FCA approval, we will act quickly to integrate NEX
Exchange into the business and build it into a quality home for
growth companies. This will include a business development process
focussing in particular on listing opportunities and synergies with
Aquis Exchange activities, supported by an investment in key
personnel.
Notwithstanding the macro-economic uncertainty, current trading
is in line with market expectations for the full year. The
regulatory environment, enhanced business recognition,
international and asset class development opportunities and an
evolving view on data solutions all support the long-term
development of Aquis, and we look forward to continuing to grow the
business.
Alasdair Haynes
Chief Executive Officer
Condensed consolidated statement of comprehensive income
For the six month period ended 30 June 2019
6 months Year ended Restated
ended 31/12/2018 6 months
30/06/2019 ended
30/06/2018
Note GBP'000 GBP'000 GBP'000
Profit and loss
Revenue 4 3,419 3,983 1,290
Expenses (4,181) (7,089) (3,442)
Gross loss (762) (3,106) (2,152)
Expected credit loss reversal 5 120 424 295
Operating loss before investment income (642) (2,682) (1,857)
Investment income 6 21 30 6
Operating loss before tax (621) (2,652) (1,851)
Exceptional costs - (1,012) (1,398)
Net Profit/(Loss) for the year before
tax (621) (3,664) (3,249)
Income tax expense/(recovered) - 247 -
Net Profit/(Loss) for the year after
tax 3 (621) (3,417) (3,249)
Other comprehensive income /(loss)
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange differences on translation
of foreign operations after tax 16 (2) - -
Total comprehensive loss for the year (623) (3,417) (3,249)
============ ============ ============
Earnings per share (pence) 7
Basic
Ordinary shares (2) (21) (118)
Diluted
Ordinary shares (2) (20) (98)
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 2019
As at 30/06/2018
As at
As at 30/06/2019 31/12/2018 (restated)
Note GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 8 695 638 650
Property, plant and equipment 9 1,900 542 418
Other receivables 10 862 849 1,287
Total non-current assets 3,457 2,029 2,355
Current assets
Trade and other receivables 10 2,152 1,823 1,668
Cash and cash equivalents 11,212 11,610 13,140
Total current assets 13,364 13,433 14,808
Total assets 16,821 15,462 17,163
================= ============ =================
Current liabilities
Trade and other payables 11 1,650 892 863
Non-current liabilities
Lease liabilities 17 1,283 - -
Total liabilities 2,933 892 863
================= ============ =================
Net assets 13,888 14,570 16,300
----------------- ------------ -----------------
Equity
Called up share capital 12 2,715 2,715 2,715
Share premium account 13 10,840 10,840 10,840
Other reserves 14 153 92 -
Retained earnings 15 182 923 2,745
Foreign currency translation
reserve 16 (2) - -
Total equity 13,888 14,570 16,300
================= ============ =================
The notes to the financial statements on pages 7 to 16 form an
integral part of these financial statements.
Condensed consolidated statement of changes in equity
For the period ended 30 June 2019
Note Share Share Retained Foreign Other Total
Capital Premium Earnings Currency Reserves
Translation
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 31/12/2017 - 23,517 (16,909) - - 6,608
-
Share capital reorganisation 2,269 (23,517) 21,248 - - -
Issue of share capital 446 11,554 - - - 12,000
Restated loss for
the 6 months to
30 June 2018 - - (3,249) - - (3,460)
Exceptional costs - (714) - - - (714)
Adjustment due to
IFRS 15&9 - - 1,655 - - 1,865
As at 30/06/2018 2,715 10,840 2,745 - - 16,300
Loss for the 6-month
period ended 31/12/2018 - - (167) - - 43
Recognition of share
option reserve 14 - - - - 92 92
Adjustment due to
IFRS 15 & 9 - - (1,655) - - (1865)
As at 31/12/2018 2,715 10,840 923 - 92 14,570
Adjustment due to
IFRS 16 - - (120) - - (120)
Adjusted as at 01/01/2019 2,715 10,840 803 - 92 14,450
Loss for the 6-month
period ended 30/06/2019 - - (621) - - (621)
Foreign exchange
differences on translation
of foreign operations 16 - - - (2) - (2)
Share-based payments 14 - - - - 61 61
As at 30/06/2019 2,715 10,840 182 (2) 153 13,888
========= ========= ========== ============= ========== ========
Condensed consolidated statement of cash flows
For the period ended 30 June 2019
Note 6 months Year ended Restated
ended 31/12/2018 6 months
30/06/2019 ended 30/06/2018
GBP'000 GBP'000 GBP'000
Cashflows from operating activities
Cash generated by operations 18 62 (4,022) (2,440)
Income taxes (paid)/refunded - 470 222
Interest paid 17 (24) - -
Net cash outflow from operating
activities 38 (3,552) (2,218)
------------ ------------ ------------------
Investing Activities
Purchase of Property, plant
and equipment 9 (181) (422) (418)
Increase in intangible assets 8 (281) (423) (210)
Investment in subsidiaries 2,16 - (9) -
Interest received 6 21 30 6
Net cash used in activities (438) (823) (628)
------------ ------------ ------------------
Financing Activities
Proceeds from share issue - 12,000 12,000
------------ ------------ ------------------
Net inflow generated from
financing activities - 12,000 12,000
------------ ------------ ------------------
Net decrease in cash and cash
equivalents (400) 7,624 9,154
------------ ------------ ------------------
Cash and cash equivalents at the beginning
of the period 11,610 3,986 3,986
Effect of exchange rate changes
on cash 16 2 - -
Cash and cash equivalents
at the end of the period 11,212 11,610 13,140
============ ============ ==================
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 2019 and ending 30
June 2019 ("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 2018 and any public announcements made by
Aquis Exchange PLC during the interim reporting period.
The accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period,
except for the adoption of new and amended standards as set out
below.
The Company has changed its accounting policies and made
retrospective adjustments as a result of adopting IFRS 16 Leases.
The impact of the adoption of the leasing standard and the new
accounting policies are disclosed in note 17 below.
The Company has restated balances for the period ended 30 June
2018 in order to present the cumulative effect of adopting IFRS 15:
Contracts with Customers and IFRS 9: Financial Instruments.
The Directors of Aquis Exchange PLC have reviewed the Group's
forecasts and projections, taking into account reasonably possible
changes in trading performance, which show that the Group has
sufficient financial resources to meet its day to day obligations
as they fall due in the ordinary course of business and to continue
in operational existence for the foreseeable future. On the basis
of this review, and after considering all facts and circumstances
about the foreseeable future of the company known to them as at the
date of this report, the Directors are satisfied that it is
appropriate to prepare the interim financial statements for the
period ended 30 June 2019 on a going concern basis.
2. Significant changes in the current reporting period
Despite challenging market conditions during the six months
ended 30 June 2019, Aquis Exchange PLC (the 'Company') has made
significant headway towards reaching breakeven.
During the interim period, the Company established a subsidiary
office in Paris with full regulatory approval in preparation for
resultant Brexit negotiations. The Company successfully applied for
regulatory approval to operate a Multilateral Trading Facility
(MTF) in France in January 2019 and is delighted to present the
first set of Consolidated Financial Statements for the Aquis
Exchange PLC group.
The financial position and performance of the group was
particularly affected by the following events and transactions
during the six months to 30 June 2019:
-- a significant increase in revenue as a result of an increase
in exchange Members and trading volumes, as well as an increase in
licensing contracts (see note 3),
-- the consolidation of a foreign subsidiary, Aquis Exchange Europe SAS (see note 15), and
-- the adoption of the new leasing standard IFRS 16 Leases (see note 17)
Since the end of the interim reporting period, the group has
announced plans to acquire 100% of NEX Exchange Limited (see note
19).
3. Earnings before interest, tax, depreciation and amortisation
Restated
6 months 6 months
ended Year ended ended
30/06/2019 31/12/2018 30/06/2018
GBP'000 GBP'000 GBP'000
Net Profit/(Loss) after tax (621) (3,417) (3,249)
Income tax expense/(recovered) - 247 -
Depreciation charge 215 162 75
Amortisation charge 224 449 225
Interest on IFRS 16 leased assets 21 - -
Earnings before interest, tax, depreciation
and amortisation('EBITDA') (161) (2,559) (2,949)
------------ ------------ ------------
4. Revenue
Revenue analysed by class of business:
Restated
6 months 6 months
ended Year ended ended
30/06/2019 31/12/2018 30/06/2018
GBP'000 GBP'000 GBP'000
Subscription Fees 2,675 3,101 1,199
Licence Fees 590 738 91
Data Vendor Fees 154 144 -
3,419 3,983 1,290
------------ ------------ ------------
5. Expected credit loss
The expected credit loss on licensing contract assets has been
calculated in accordance with IFRS 9:
GBP'000
As at 31/12/2017 1,415
Expected credit loss reversal for the period (295)
As at 30/06/2018 1,120
Expected credit loss reversal for the period (424)
As at 31/12/2018 696
Expected credit loss reversal for the period (120)
As at 30/06/2019 576
--------
6. Investment income
6 months Year ended 6 months
ended 30/06/2019 31/12/2018 ended 30/06/2019
GBP'000 GBP'000 GBP'000
Interest income
Bank deposits 21 30 6
------------------ ------------ ------------------
7. Earnings per share
Restated
6 months ended Year ended 6 months
30/06/2019 31/12/2018 ended 30/06/2018
Number of Shares ('000)
Weighted average number of
ordinary shares for basic earnings
per share 27,150 16,433 2,747
Weighted average number of
ordinary shares for diluted
earnings per share 27,710 16,997 3,311
Earnings (GBP'000)
Loss for the period from continued
operations (623) (3,417) (3,249)
Basic and diluted earnings
per share (pence)
Basic earnings per ordinary
share (2) (21) (118)
Diluted earnings per ordinary
share (2) (20) (98)
8. Intangible assets
Developed
trading platforms
GBP'000
Cost
As at 31/12/2017 1,070
Additions- internally generated 210
As at 30/06/2018 1,280
Additions- internally generated 213
As at 31/12/2018 1,493
Additions- internally generated 281
As at 30/06/2019 1,774
-------------------
Accumulated amortisation and impairment
As at 31/12/2017 406
Charge for the period 224
As at 30/06/2018 630
Charge for the period 225
As at 31/12/2018 856
Charge for the period 224
As at 30/06/2019 1,079
-------------------
Carrying amount
As at 31/12/2017 664
As at 30/06/2018 650
As at 31/12/2018 638
As at 30/06/2019 695
-------------------
9. Property, plant and equipment
Non-current
portion
Fixtures, of IFRS
fittings Computer 16 leased
and equipment Equipment assets Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
As at 31/12/2017 233 1,189 - 1,416
Additions & disposals 13 211 - 224
As at 30/06/2018 246 1,394 - 1,640
Additions & disposals - 198 - 198
As at 31/12/2018 246 1,592 - 1,838
Additions & disposals - 302 1,271 1,573
As at 30/06/2019 246 1,894 1,271 3,411
--------------- ----------- ------------ --------
Accumulated depreciation
and impairment
As at 31/12/2017 29 1,105 - 1,134
Charge for the period 25 51 - 75
As at 30/06/2018 53 1,169 - 1,221
Charge for the period 25 50 - 75
As at 31/12/2018 78 1,219 - 1,296
Charge for the period 25 103 87 215
As at 30/06/2019 102 1,322 87 1,511
--------------- ----------- ------------ --------
Carrying amount
AS at 31/12/2017 205 78 - 283
As at 30/06/2018 192 227 - 418
As at 31/12/2018 169 373 - 542
As at 30/06/2019 144 572 1,184 1,900
--------------- ----------- ------------ --------
10. Trade and other receivables
Current
-----------------------------------------------------------------
As at 30/06/2019 As at 31/12/2018 As at 30/06/2018
(restated)
GBP'000 GBP'000 GBP'000
Trade receivables net of
impairment 1,712 1,519 1,284
Other receivables 186 8 2
Prepayments 254 296 382
2,152 1,823 1,668
----------------- ----------------- -----------------
Non-Current
-----------------------------------------------------------------
As at 30/06/2019 As at 31/12/2018 As at 30/06/2018
(restated)
GBP'000 GBP'000 GBP'000
Trade receivables net of
impairment 650 565 1,010
Other receivables 212 284 277
862 849 1,287
----------------- ----------------- -----------------
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 30/06/2018
As at 30/06/2019 As at 31/12/2018 (restated)
GBP'000 GBP'000 GBP'000
Gross trade receivables 2,938 2,779 2,329
Expected credit loss (576) (696) (1,120)
-----------------
Trade receivables net of
impairment 2,362 2,083 1,209
----------------- ----------------- -----------------
11. Trade and other payables
As at 30/06/2018
As at 30/06/2019 As at 31/12/2018 (restated)
Trade payables 271 153 292
Accruals 954 681 540
Social security and other
taxation 107 10 -
Other payables 318 48 31
----------------- ----------------- -----------------
1,650 892 863
----------------- ----------------- -----------------
12. Called up share capital
As at 30/06/2018
As at 30/06/2019 As at 30/06/2018 (restated)
GBP'000 GBP'000 GBP'000
Ordinary share capital
Issued and fully paid
27,149,966 Ordinary shares
of 10p each 2,715 2,715 2,715
2,715 2,715 2,715
----------------- ----------------- -----------------
13. Share premium account
As at 30/06/2018
As at 30/06/2019 As at 31/12/2018 (restated)
GBP'000 GBP'000 GBP'000
At beginning of year 10,840 23,517 23,517
Issue of new shares - 11,554 11,554
Share capital reduction - (23,517) (23,517)
Exceptional costs - (714) (714)
At end of year 10,840 10,840 10,840
----------------- ----------------- -----------------
14. Other Reserves
As at 30/06/2018
As at 30/06/2019 As at 31/12/2018 (restated)
GBP'000 GBP'000 GBP'000
Reserves relating to share-based
payments 153 92 -
----------------- ----------------- -----------------
The reserves relating to share-based payments reflects the
estimated value of the approved Employee Share Option Scheme
estimated using a US binomial option valuation model.
15. Retained earnings
GBP'000
As at 31/12/2017 (16,909)
Adjustment arising due to IFRS 15 &9 1,655
Adjusted opening balance as at 31/12/2017 (15,254)
Elimination of Share Premium 21,248
Restated loss for the 6-month period ended 30/06/2018 (3,249)
As at 31/06/2018 2,745
Adjustment arising due to IFRS 15 &9 (1,655)
Loss for the 6-month period ended 30/12/2018 (167)
As at 31/12/2018 923
Adjustment arising due to IFRS 16 (120)
Adjusted opening balance as at 31/12/2018 803
Loss for the 6-month period ended 30/06/2019 (621)
As at 31/06/2019 182
---------
The Company has adopted IFRS 16 retrospectively from 1 January
2019 but has not restated comparatives for the 2018 reporting
period, as permitted under the specific transitional provisions in
the standard. The reclassifications and the adjustments arising
from the new leasing rules are therefore recognised in the opening
balance sheet on 1 January 2019.
16. Foreign currency translation reserve
Aquis Exchange PLC is regulated in the UK by the FCA but with
increasing uncertainty over the outcome of Brexit the Company
decided to establish a European subsidiary and in January 2019
successfully applied for regulatory approval to operate a
Multilateral Trading Facility (MTF) in France through this
subsidiary. 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 Year ended 6 months
ended 30/06/2019 31/12/2018 ended 30/06/2018
GBP'000 GBP'000 GBP'000
At the beginning of the year/period - - -
Foreign exchange differences
on translation of foreign
operations recognised in OCI (2) - -
At the end of the year/period (2) - -
------------------ ------------ ------------------
17. IFRS 16 Leases
Adjustments recognised on adoption of IFRS 16
On adoption of IFRS 16, the Company recognised lease liabilities
in relation to leases which had previously been classified as
'operating leases' under the principles of IAS 17 Leases. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee's incremental borrowing
rate as of 1 January 2019. The weighted average lessee's
incremental borrowing rate applied to the lease liabilities on 1
January 2019 was 3.15%.
2019
GBP'000
Operating lease commitments discounted using the rate
implicit in the lease at the date of the initial application
(3.15% p.a.) 1,561
Add: finance lease liabilities recognised as at 31 December
2018 -
(Less): short-term leases recognised on a straight-line
basis as expense -
(Less): low-value leases recognised on a straight-line
basis as expense -
(Less): contracts reassessed as service agreements -
Add/(less): adjustments as a result of a different treatment
of extension and termination options -
Add/(less): adjustments relating to changes in the index
or rate affecting variable payments -
Lease liability recognised as at 1 January 2019 1,561
--------
Of which are:
Current lease liabilities 183
Non-current lease liabilities 1,378
1,561
--------
The associated right-of use asset was measured at the amount
equal to the lease liability, adjusted by the amount of any prepaid
or accrued lease payments relating to that lease recognised in the
balance sheet as at 31 December 2018. There were no onerous lease
contracts that would have required an adjustment to the
right-of-use assets at the date of initial application.
The recognised right-of-use assets relate to the following types
of assets:
As at 30/06/2019 As at 01/01/2019
GBP'000 GBP'000
Property
Of which are:
Current portion of IFRS 16 leased assets 173 173
Non-current portion of IFRS 16 leased assets 1,184 1,271
1,358 1,444
----------------- -----------------
The change in accounting policy affected the following items in
the statement of financial position on 1 January 2019:
As at 01/01/2019
GBP'000
Decrease in rent deposit asset (61)
Increase in IFRS 16 leased assets 1,444
Increase in lease liabilities (1,561)
Decrease in accruals 58
Net impact on retained earnings (120)
-----------------
Impact on EBITDA and earnings per share:
Adjusted EBITDA increased by GBP8k as a result of the change in
accounting policy for the six months to 30 June 2019. The Impact on
the statement of comprehensive income for the six months ended 30
June 2019 is as follows:
GBP'000
Depreciation expense (included in expenses) (87)
Rent expense (included in expenses) 115
Finance costs (included in expenses) (21)
Operating loss 8
Income tax expense -
Operating loss for the period after tax 8
--------
The impact on the statement of cash flows for the six months
ended 30 June 2019 is as follows:
GBP'000
Payments to suppliers and employees (206)
Cash generated from operations (206)
Interest paid (24)
Net cash generated from operating activities (230)
--------
There is no material impact on other comprehensive income and
the basic and diluted EPS as a result of the implementation of IFRS
16.
Practical expedients applied:
In applying IFRS 16 for the first time, the group has used the
following practical expedients permitted by the standard:
a. reliance on previous assessments on whether leases are onerous,
b. the accounting for operating leases with a remaining lease
term of less than 12 months as at 1 January 2019 as short-term
leases,
c. the exclusion of initial direct costs for the measurement of
the right-of-use asset at the date of initial application, and
d. the use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
The Company has also elected not to reassess whether a contract
is or contains a lease at the date of initial application. Instead,
for contracts entered into before the transition date the group
relied on its assessment made applying IAS 17 and IFRIC 4
Determining whether an Arrangement contains a Lease.
The company's leasing activities and how these are accounted
for
Aquis Exchange PLC leases its business offices in London. The
rental contract is for a fixed period of 5 years with the option to
extend for a further 5 years which the directors are reasonably
certain will be exercised. The lease terms contain rent free
periods which have been considered in determining the rate implicit
in the lease and hence the Company's incremental borrowing cost.
The lease agreement does not impose any covenants, but leased
assets may not be used as security for borrowing purposes.
Until the 2018 financial year, leases of property, plant and
equipment were classified as either finance or operating leases.
Payments made under operating leases (net of any incentives
received from the lessor) were charged to profit or loss on a
straight-line basis over the period of the lease.
From 1 January 2019, leases are recognised as a right-of-use
asset and a corresponding liability at the date at which the leased
asset is available for use by the company. Each lease payment is
allocated between the liability and finance cost. The finance cost
is charged to profit or loss over the lease period in order to
produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset is
depreciated over the shorter of the asset's useful life and the
lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include the
net present value of the fixed payments (including in-substance
fixed payments), less any lease incentives receivable. The lease
payments are discounted using the interest rate implicit in the
lease.
The right-of-use asset has been measured as the value of the
lease liability, plus prepaid lease payments, being the unamortised
portion of the rent deposit asset.
Payments associated with short-term leases and leases of
low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a
lease term of 12 months or less.
18. Cash generated from operations
Restated
6 months 6 months
ended Year ended ended
30/06/2018 31/12/2018 30/06/2018
GBP'000 GBP'000 GBP'000
Loss after tax (621) (3,417) (3,249)
Adjustments for:
Taxation credited - (247) -
Investment revenue (21) (30) (6)
Amortisation and impairment of intangible
assets 223 449 225
Depreciation and impairment of property,
plant and equipment 215 162 75
Equity settled share-based payment expense 61 92 -
Other gains/losses on transition of
accounting standards (224) (714) 363
Movement in working capital:
Increase in trade and other receivables (329) (933) (214)
Increase in trade and other payables 758 616 588
Cash generated/ (absorbed) by operations 62 (4,022) (2,218)
------------ ------------ ------------
19. Events occurring after the reporting period
On 5 July 2019 the group announced plans to purchase NEX
Exchange Limited for GBP1 plus up to GBP2.7 million for working
capital requirements, giving the group an opportunity to acquire a
Recognised Investment Exchange ("RIE") status business with a focus
on primary markets.
The acquisition is contingent upon regulatory approval from the
Financial Conduct Authority which Directors anticipate will be
given in the fourth quarter of 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR GMGMLVVVGLZM
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September 17, 2019 02:00 ET (06:00 GMT)
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