CEO Cees Vermaas explores the recent strong financial results of The International Stock Exchange Group – despite COVID-19 – and what he has planned to unlock further growth in the coming years.
The last year has been dominated by the COVID-19 pandemic but during this time, we have also seen the end of the transition period for the UK to leave the EU. The agreement between the UK and the EU for trade and cooperation was very light in respect of financial services and as such, it left much about the future relationship still to be resolved.
As a result of this situation, we have seen some impact in the markets already and with the prospect of more in the coming months. While there is a lot which remains unknown, it is clear that a post-Brexit world has delivered a changing landscape in financial services and in doing so, it offers the chance for businesses such as ours to both shape and take future opportunities.
Records broken in 2020
At The International Stock Exchange Group Limited (TISEG) we have recently released our Annual Report for 2020. Clearly, last year was extremely challenging for everyone, and while there is light at the end of the tunnel, our highest priority remains the health and safety of our staff and their families. Our staff all responded magnificently, and our business continuity systems have ensured the continued seamless operation of the market.
Business flows were strong at the start of 2020 and we were pleased that volumes of new listings continued to hold up despite the uncertainties of COVID-19 and the impending culmination of Brexit.
These trends show the increased demand for debt listings as companies sought to refinance, either out of necessity or opportunity.
For example, high yield bond issuance in Europe increased from 2019 to 2020 and at the same time, The International Stock Exchange (TISE) grew its market share to more than a third of all deals. Issuers of high yield bonds listing on TISE last year included great brand names, such as luxury car manufacturer Aston Martin, LEGOLAND owners Merlin Entertainments and transport operators Stena Lines and Carnival Corporation, as well as US digital content platform Netflix and European telecommunication companies Altice and eircom.
Overall, there were 831 newly listed securities on TISE during 2020, which is the second highest annual total of new listings since inception of the business in 1998. This took the total number of securities listed on TISE to 3,162 at the end of December 2020.
The release of TISEG’s latest Annual Report showed that the initial fees from these new listings, together with annual fees from across the market, contributed to an increase in revenue to a record £8.4 million, a 4.2% increase in post-tax profit to £3.6 million and an increase in earnings per share to 128.4p for the year ended 31 December 2020.
These results were pleasing, and I can also report that the momentum from the end of 2020 has continued into 2021 where we have had a record first quarter of 225 newly listed securities in the year to 31 March. This shows that TISE has solid foundations but also, I am determined that we continue to build on this success by following through on delivering our ambitious new strategy which was formulated during last year.
Central to that is increasing our market share as one of Europe’s leading professional bond markets. An important step in that journey is increasing sales and business development activity in Dublin and London, where our new Head of Bond Markets, Anthony Byrne, will lead our efforts to bring TISE’s unique proposition under the attention of bond issuing decision makers and sponsors.
TISE’s unique proposition translates into a responsive, innovative approach that is very attractive to clients – for example, we turnaround initial listing applications within three business days, and final listing applications within two business days – and we are even improving these commitments where possible through a refinement of operations and the use of technology.
This combines with the fact that while we now have staff operating across Dublin, Guernsey, the Isle of Man, Jersey and London, TISE’s regulated market in Guernsey is based in the European time zone but sits outside both the UK and the EU. This means that business can be conducted on the market free from EU directives and regulations, such as the Market Abuse Regulation (MAR). At the same time, we are positioned to offer current certainty and future agility in our relationships with both the UK and the EU.
Unlocking growth post-Brexit
Our growth strategy is an important step in the diversification of our products, geographies and markets and our strong financial position gives us the ability and time to execute on our plans.
We will be doing so in a post-Brexit world which provides a new landscape in financial services and as such, we must put ourselves in the best possible position both to shape and take the opportunities which emerge from the changing international environment.
Originally published digitally in February on City AM.