Aquis Exchange Remains Confident Despite Losing Historic Contract

On Wednesday, Aquis Exchange (LSE:AQX) provided an update on its recent trading performance, showcasing modest revenue growth, a solid cash position, and strategic moves to bolster its technology division, though it also noted a £1m setback due to the loss of a historic contract.

For the first half of the year, the firm reported a 3.5% increase in net revenue, reaching £10 million, up from £9.7 million in the previous year. The company’s cash and cash equivalents grew to £14.5 million as of June 30, compared to £13.9 million a year earlier.

Aquis Markets saw an increase in market share, rising to 5.2% from 4.68% in the same period of 2023. The company anticipates further product diversification in the latter half of the year.

In the technology sector, Aquis Technologies, which licenses exchange-related technology, experienced its largest contract pipeline to date. In response, the firm plans to invest an additional £6.2 million over the next three years to enhance product availability and strengthen its competitive position, aiming to drive significant revenue and cash flow growth in the medium term.

Aquis Data also performed strongly, with a 17% increase in revenue following the introduction of new member data charges in June. The division remains focused on developing consolidated tapes in the UK and EU, which could offer considerable revenue opportunities in the future.

Despite a challenging environment for primary listings, Aquis Stock Exchange demonstrated resilience, with a 44% rise in trading value compared to the first half of 2023, and £87 million raised through secondary fundraising.

However, the company faced a challenge with the non-renewal of a historic contract for a start-up exchange, which is anticipated to decrease net revenue and profit before tax by around £1 million in 2024.

Nevertheless, Aquis remains well-positioned to leverage its robust contract pipeline and strong cash reserves to explore growth opportunities. The second half of 2024 is expected to reflect the impact of the contract loss, but the company is confident in its long-term strategy, supported by ongoing investments and a strong market position.

Further details on strategic investments will be provided with the interim results announcement on September 12, and at a capital markets day later in the year. The company’s CEO, Alasdair Haynes, expressed disappointment over the contract loss but highlighted the progress made in laying the groundwork for future objectives. The scale of the firm’s technology contracts has significantly expanded, positioning Aquis as a major player in regulatory-grade exchange technology.

As of 11:42 BST, shares in Aquis Exchange were down 16.14%, trading at 400p.