Aquis goes fintech: Diversification of platform sees 24% increase in revenue achieved in 2022

Alasdair Haynes, chief executive of Aquis Exchange, discusses strong performance figures from last year, diversification, and milestones achieved in dark trading.

Aquis has reported solid financial performance earnings for the year ended 31 December 2022, with net revenue up 24%.

The Group’s exchange technology and services developer, Aquis Technologies, achieved a year-end revenue of £5 million, up from £4.4 million in 2021. Although revenue was up from 2021, profit before tax declined from £2.4 million in 2021 to £1.7 million in 2022.

“When we look at what the opportunities are outside of financial services, it’s endless,” said Alasdair Haynes, chief executive of Aquis Exchange, speaking to The TRADE.

“I think what starts to excite people is that we are becoming much more of a fintech company rather than simply ‘our stock exchange is a stock exchange’. Our technology segment is actually becoming a fintech business, a provider of technologies to us and to other people, other finance businesses, and potentially businesses outside of that.”

Aquis reported increasing levels of interest in exchange technology provided by its Aquis Technologies operating segment, with the offering expanding to include a 24/7 Matching Engine – due to launch Monday next week.

In 2022, the exchange achieved a net revenue of £20.1 million, up 24% year-on-year compared to £16.2 million reported in 2021.

Profit before tax was up 27% to £4.5 million, an increase from £3.6 million in 2021. Underlying profit, which refers to profit before tax plus other comprehensive income, saw significant increases by 41% to £4.7 million compared to £3.3 million in 2021.

Aquis Group’s three operating segments (Aquis Markets (the group’s two MTFs, AQXE and Aquis Exchange Europe), Aquis Stock Exchange and Aquis Technologies) all saw a jump in revenues and profits for the year ended 2022.

Aquis Markets (AQXE), which is UK-regulated, and Aquis Exchange Europe (AQXE), which is French-regulated, achieved a revenue of £12.4 million in the year ended 2022, up from £10.9 million in 2021. Profit before tax amongst the two MTFs saw increases from £1.4 million in 2021 to £2.5 million in 2022.

The Group’s primary listings and trading business, Aquis Stock Exchange (AQSE), also saw increases in revenue from £1.9 million in 2021 to £2.4 million in 2022. Profit before tax also increased from £220,000 in 2021 to £388,000 in 2022.

Other highlights from 2022 for the Group included further diversification of the Aquis Markets offering into dark pools, which offset a decrease in lit volumes across the market.

Speaking to The TRADE about Aquis’ move into dark pools, Haynes said: “We bought the assets of UBS MTF and then we kept it on their system and then come August last year, we moved the technology across. We saw market share within the dark pool drop – as we said would happen – because obviously people needed to test the system. They needed to make quite certain that they were satisfied with what we built. But since then, we’ve seen it grow from 2-3% of the dark pool to just under 8% and it continues to rise.

“And it’s the same for the periodic auction, whereby we were around about 2% of all the auctions until October last year. We made some changes and now we’re around 10-11% of the periodic auctions. So I think the diversification of our model in the markets business, by adding on these products and by changing the products, has given us a suite that I think is very attractive.”

Aquis Stock Exchange – despite adverse market conditions – also delivered 22 new IPOs in 2022, which the Group stated is the most of any growth company exchange in the UK.

Speaking on last year’s results, Haynes added: “We’re actually slightly ahead of consensus, which I’m pleased about, and we have been ever since we’ve done that set of results. We’ve never not made our numbers. In fact, we’ve been ahead of the numbers almost every time – at or ahead. The market has a consensus of where they expect us to be this year, which continues growth.

“We’ve had a good first quarter and then people say, well, you are ahead of expectations. Well, our upcoming expectations are of course for significant growth because we are a growth company. We’re very happy with where we are today.”