The Board of Directors of The International Stock Exchange Group Limited (the “Company”) today issues an update on the Company’s recent trading and the outlook for the full year ending 31 December 2021.
Financial and Operational Highlights:
- Record listings with 873 securities admitted in the period (649 2020(1))
- Strong trading in the ten months ended 31 October 2021
- Interim dividend of 45p per share paid on 11 October 2021
FY 2021 Outlook:
- Strong growth in revenue and EBITDA, basic EPS to be c.30% ahead of FY 2020
- Focused on delivering strategy to sustain future growth
- Impact of QAHC regime remains uncertain
- Board reviewing options for the return of capital in FY 2022
Notes: (1) 10 months ended 31 October 2020
Performance and Listing Volumes
The Group has continued to perform strongly during the third quarter and beginning of the fourth quarter, with 366 securities admitted to the Official List of The International Stock Exchange (TISE) between the start of July and the end of October this year. For the year to 31 October 2021, a total of 873 securities have been admitted to TISE’s Official List, surpassing the previous full year record set in 2018. This took the total number of listed securities on TISE’s Official List to 3,556 at 31 October 2021.
FY 2021 Outlook
For the year ending 31 December 2021, the Board currently expects strong growth in revenue and EBITDA and for basic EPS to be c.30% ahead of that for FY 2020.
The Board is reviewing options for the return of capital to shareholders during the course of next year. Whilst the Board remains optimistic that the prospective UK legislative changes will not severely impact listing volumes and therefore revenue, the position is unlikely to become clear until the legislation comes into force in April 2022 and the Board will provide a further update soon thereafter. The Board needs to be prudent when assessing the business’ current and expected cash requirements.
Markets, Products and Services
Favourable financing conditions have continued to buoy issuances across TISE’s core bond market. With the launch of the Qualified Investor Bond Market (QIBM) in August this year, TISE has established a compelling offering for the European market and is well positioned to compete with other listing venues. The QIBM is part of TISE’s strategy to sustain future growth through diversification and scaling-up of the business. Early indicators for the QIBM are encouraging, with an increase in programmes and final terms issuances, and securitisations.
Underlying these developments, TISE continues to invest in enhancing its technology to ensure that it can offer the very highest standards of service to clients. Preparations for the launch of the new auction trading system are well advanced, with the first auction now planned for early 2022.
UK Legislative Changes
The draft Finance Bill 2022 includes legislative changes which may impact the volume of new, and possibly existing, listings on TISE. The two principal changes relevant to TISE are: The introduction of the qualifying asset holding companies (QAHC) regime and the removal of the listing requirement for UK REITs owned by institutional investors.
QAHC: Under the prospective legislation, UK resident companies who meet certain eligibility tests and elect for the QAHC regime to apply, may no longer need to list on exchanges like TISE in order to avail themselves of the Quoted Eurobond Exemption (QEE) from UK withholding tax on interest payments in the UK.
It is not currently possible to identify how many issuers will meet all of the eligibility criteria or elect for the QAHC regime. TISE is actively engaging with the professional advisor community to try to better understand the practical application of the QAHC regime in advance of its introduction in April 2022. Rather than seeking to rely on the unknown and untested QAHC regime, issuers may still benefit by availing of the QEE. This established route provides the highest level of certainty, combined with a cost-effective and expeditious listing service from TISE.
REITs: Under the prospective legislation, where at least 99% of the ordinary share capital of the company is held by institutional investors, shares may no longer need to be listed on exchanges like TISE in order to qualify to be a UK REIT. TISE’s share of the listed UK REIT market is likely to contract sharply from April 2022, though the likely revenue loss is modest.
Cees Vermaas, CEO of the Company, said: “I am delighted with the progress we have made in achieving our strategic priorities in the year to date. It has already been a record year for volumes of new listings and we have also delivered on a number of key initiatives to grow our core bond market and to ensure we offer the very highest standards of service to clients. We remain focused on sustaining future growth through diversification and scaling-up the business.”
Cautionary Statement: This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this document and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and the company's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. the company undertakes no obligation to revise or update any forward-looking statement contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise, save as required by law and regulations.