21 March 2024
Aquis Exchange
PLC
("Aquis", the "Company" or the "Group")
Results for the year ended
31 December 2023
Another year of
double-digit revenue growth
Aquis Exchange PLC (AQX.L), a
creator and facilitator of next-generation financial markets, is
pleased to announce its audited results for the year ended 31
December 2023.
Financial highlights:
|
FY23 (£m)
|
FY22
(£m)
|
|
Net revenue
|
22.7
|
20.1
|
+13%
|
Profit before tax
|
5.2
|
4.5
|
+15%
|
Basic EPS (p)
|
19.4p
|
17.2p
|
+13%
|
Cash and cash
equivalents
|
14.8
|
14.2
|
+4%
|
Net
revenue split by division:
|
FY23 (£m)
|
FY22
(£m)
|
|
Markets
|
10.9
|
10.3
|
+7%
|
Technologies
|
6.3
|
5.2
|
+22%
|
Data
|
3.7
|
3.0
|
+24%
|
Aquis Stock Exchange
|
1.8
|
1.6
|
+8%
|
Group Net Revenue:
|
22.7
|
20.1
|
+13%
|
Business highlights:
-
|
Strong performance particularly
noteworthy given difficult market conditions
|
-
|
Clear benefit of diversified
revenue streams, with revenue growth and profit across all four
divisions
|
-
|
Aquis Markets increased
market share following change to proprietary trading rule in
November 2023. The overall pan-European market share for December
2023 was 4.97%, up from 4.76% in November 2023 and 4.58% in October
2023. Post-period, the average in January 2024 was 5.3% and in
February 2024 had risen to 5.46%.
|
-
|
Aquis Technologies was
awarded two new technology contracts in 2023, including one for a
central bank. In addition, an existing contract progressed from
design and consultancy to exchange delivery stage. The division now
has nine contracts, seven of which have recognised
revenue.
|
-
|
Aquis Data revenues continued
to increase to £3.7m in the year and good progress seen towards a
consolidated tape.
|
-
|
Aquis Stock Exchange admitted
16 new companies in 2023 - the most of any growth exchange in the
UK for the second year running.
|
Alasdair Haynes, CEO, Aquis Exchange PLC
said:
"I am really pleased to announce that the Aquis Group has
continued to deliver a strong performance with double digit revenue
and profit growth across all divisions, despite some of the most
challenging market and economic conditions we have ever seen, which
have continued into the first quarter of 2024.
"This makes it all the more noteworthy that Aquis was able to
deliver growth across all its divisions, with significant progress
made on a number of strategic initiatives, including an increase in
the pan-European market share of our Aquis Markets division, and a
significant Technology contract secured with a central
bank.
"Aquis has a proven track record of growth since our IPO in
2018, and we're more excited than ever about the opportunities
ahead for all of our divisions: from the global reach of our
leading technology to the strength of our market share, and the
disproportionate upside for Aquis as the UK and EU head towards a
consolidated tape. Supporting this confidence is our strong cash
position, which enables us to grow and innovate further in coming
years."
An overview of the results from
Alasdair Haynes, CEO, is available to view on
this link.
The Group will be hosting webinars
for analysts and retail investors today at 09:30 and 14:00
respectively.
If you would like to register for
the analyst webinar, please contact aquis@almastrategic.com.
Investors who would like to attend the retain investor webinar can
sign up to Investor Meet Company for free and add themselves to the
meeting via
https://www.investormeetcompany.com/aquis-exchange-plc/register-investor.
Investors who have already registered will be automatically
invited.
-ends-
Enquiries:
Aquis Exchange PLC
|
Tel: +44 (0)20 3597
6321
|
Alasdair Haynes, CEO
|
|
Richard Fisher, CFO
Adele Gilbert, Head of Marketing
& Investor Relations
|
Tel: +44 (0)20 3597
6329
|
Investec Bank plc (Nominated Adviser and
Broker)
|
Tel: +44 (0)20 7597
4000
|
David Anderson
|
|
Bruce Garrow
|
|
Lydia Zychowska
St John Hunter
Canaccord Genuity Limited (Joint
Broker)
Emma Gabriel
George Grainger
VSA Capital Limited (AQSE Corporate
Adviser)
Andrew Raca
|
Tel: +44 (0) 20 7523
8000
Tel: +44(0)20 3005 5000
|
Alma Strategic Communications (Financial PR
Adviser)
|
Tel: +44 (0)20 3405
0209
|
Josh Royston
Rebecca Sanders-Hewett
|
aquis@almastrategic.com
|
Kieran Breheny
|
|
Notes to editors:
About Aquis Exchange PLC
Aquis Exchange PLC ("Aquis") is a
creator and facilitator of next-generation financial markets,
through the provision of accessible, simple and efficient stock
exchanges, trading venues and technology.
Aquis consists of four
divisions:
Aquis
Markets operates lit and dark
order books, covering 16 European markets. For its lit books, Aquis
uses 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 stock that they trade.
Aquis
Technologies is the software
and technology division of Aquis. It focuses on building better
markets via the creation and licensing of cutting-edge,
cost-effective exchange infrastructure technology and services,
including matching engine and trade surveillance
solutions.
Aquis
Data generates revenue from the
sale of data derived from Aquis Markets and Aquis Stock Exchange to
non-Member market participants.
Aquis Stock
Exchange (AQSE) is a stock
market providing primary and secondary markets for equity and debt
products. It is authorised as a Recognised Investment Exchange,
which allows it to operate a regulated listings venue. The AQSE
Growth Market is divided into two segments 'Access' and 'Apex'; the
Access market focuses on earlier stage growth companies, while Apex
is the intended market for larger, more established
businesses.
Aquis is authorised and regulated
by the UK Financial Conduct Authority and France's Autorité de
contrôle prudentiel et de résolution and L'Autorité des
marchés financiers to operate Multilateral Trading Facility
businesses in the UK & Switzerland markets and in EU27 markets
respectively. Aquis Exchange PLC is quoted on the Aquis Stock
Exchange and on the AIM Market (AIM) of the LSE. For more
information, please go to www.aquis.eu.
Chair's Statement
Overview
It is with great pleasure that as
Chair of Aquis Exchange PLC (AQXE) I am able to report another year
of increasing revenue, profit and technological
innovation.
This has been an important year
for Aquis. We have become recognised for our ability to facilitate
and operate better markets for a modern economy, and we have become
a strong voice for competition and innovation. The Group continues
to make strong progress, underpinned by continued growth in each of
the Group's four business activities: Markets, Technology, Data and
the Aquis Stock Exchange. These results were particularly
noteworthy given the adverse economic and markets environment which
resulted primarily from significant interest rate increases through
the course of the year as Western governments focussed on reducing
inflation.
During 2023, net revenue increased
by 13% to £22.7m and profit before tax by 15% to £5.2m. Building on
2022 performance, revenue increased further through strong
contributions from the Aquis dark pool (AMP), as well as
significantly increased contributions from technology licensing and
market data. We continued to develop our presence in Europe and
enhance client relationships within the EU 27 markets.
We undertook a comprehensive
rebranding exercise which reflected how the Group has developed
since its inception 10 years ago.
We have also continued to invest
heavily in our technology, resulting in Aquis becoming the first
recognised investment exchange (RIE) to run a cloud-based matching
engine.
Board and Governance
There were no additions to the
Board during 2023 and one departure as a result of the retirement
of Mark Spanbroek in April 2023 after 10 years with Aquis. Mark
joined the Board shortly after the Company was created and has
helped guide the evolution from startup to profitable quoted
company. In anticipation of his potential retirement, during 2022
Aquis appointed Fields Wicker-Miurin as Senior Independent Director
and Chair of the Nominations & Remuneration Committee and Ruth
Wandhöfer as Independent Non-Executive Director and member of the
Audit, Risk and Compliance Committee (ARCC) and the Aquis Europe
subsidiary Board. In January 2024, Deirdre Somers joined the
ARCC.
On behalf of the whole Group, I
would like to thank Mark for his advice and counsel to
Aquis.
In addition to Mark's departure,
in October 2023 Jonathan Clelland announced his intention to retire
at the AGM in April 2024. Jonathan joined the company in 2012 when
it was first created, initially as CFO & COO and more recently
as CEO of AQEU, the Group's Paris subsidiary. Jonathan has been
responsible for creating and managing the Group's financial,
regulatory and administrative functions since inception and also
successfully spearheaded the IPO in June 2018, as well as the
acquisition of AQSE and AMP (the Aquis dark pool). We are
incredibly grateful for Jonathan's extensive work which has helped
shape Aquis into the company it is today and wish him well in his
retirement. Following Jonathan's departure there will be two
Executive Directors on the Board: Alasdair Haynes, CEO and Richard
Fisher, CFO. There has also been a restructuring of senior
management in anticipation of his departure, with David Stevens
stepping up to the COO role. This streamlined Board will retain the
balanced set of skills resulting from recruitment during the last
three years.
Culture, Stakeholder Engagement and Section 172
Duties
The Board continued its engagement
with key stakeholders, particularly focusing on employees and
shareholders. This included Fields Wicker-Miurin, Chair of the
Nominations and Remuneration Committee (NRC) and me consulting with
shareholders in advance of the renewal of our Directors'
Remuneration Policy at the 2023 AGM.
During the year I retained my
responsibility as the appointed representative of the Board to
liaise with employees, which provides a valuable insight into the
management and development of the Group.
Environment, Social and Corporate
Responsibility
From the outset, Aquis has been
committed to improving the efficiency of markets through
transparency and innovation. In addition, we aim to stimulate
growth in the economy by listening to the needs of issuers and
creating a supportive, fair and low-cost environment for capital
raisers to list instruments, particularly for innovative young
companies. These initiatives have wide corporate and social
benefits in addition to helping to build Aquis'
business.
We continue to make progress on
our ESG plans by measuring our carbon footprint and have set a
target to reduce our environmental impact. In addition, we
continued our financial literacy community project and increased
our staff engagement efforts, reflecting the continued growth of
the organisation.
We are proud that our Board in
2024 will comprise three women and five men. We will continue to
build the best teams at Aquis irrespective of peoples' gender,
religion, ethnicity or any other factor that is not relevant to the
job in hand. We particularly like the Gender Pay Gap measure as an
objective way of measuring the level of female seniority in the
company. We remain committed to further improving the measure of
female seniority; in 2023 this was 20% on base salary and 23% on
annual bonus, an improvement on 28% and 33% respectively last year.
Our target remains to be materially better than the average in UK
financial services on this measure.
Our focus for the year ahead
We are confident that we have the
resources and technology to support further profit growth across
all our business activities and we will continue to invest in order
to maintain this trajectory.
Glenn Collinson
Chair
Chief Executive's Report
Overview
This last year has been a
remarkably difficult period for markets and participants alike,
with major economic headwinds throughout the year resulting in
overall pan-European volumes significantly below those of
2022.
This makes it particularly
impressive that Aquis was able to deliver growth across its
divisions, with significant progress made on a number of strategic
initiatives.
The overall strong performance
resulted in the Group generating a 13% growth in net revenue
(calculated by including the ECL Impairment movement on Contract
Asset balances - see Note 6 to the financial statements) to £22.7m
(net of provisions) and a profit before tax of £5.2m in 2023
compared to a profit before tax of £4.5m in 2022. This increase
provides the Group with the right platform for continued investment
and further strengthening of its principal business
activities.
The Group profited from growth in
the Technologies division along with solid performances in
pan-European secondary market trading given market conditions. The
primary market activities of the Aquis Stock Exchange and data
revenue progressed well. This growth demonstrates the resilience of
the diversified business model that Aquis has created. In the
Markets division, Aquis generated a return to an overall market
share of the pan-European equities secondary market trading of
approximately 5% through an innovative change to the proprietary
trading rule on its UK and EU trading platforms. Liquidity
providers on Aquis now have the option to choose if they wish to
interact with aggressive non-client proprietary trading. In
addition, we made a small investment in blocktrading technology
firm OptimX Markets, to support our planned growth in conditional
order types for the Aquis Markets business.
Reflecting the increasing
diversification across four business divisions, we successfully
completed a rebrand during the year. The Group now consists of
Aquis Markets (formerly referred to as the Aquis Exchange
business), Aquis Technologies, Aquis Data and Aquis Stock
Exchange.
Aquis Markets
See here for an
introduction to Aquis Markets
Over the period, the secondary
market multilateral trading facility ("MTF") platforms operated by
the Group in London and Paris continued to grow despite challenging
economic and regulatory conditions, underpinning the resilience of
the subscription model. The number of trading members increased as
well as some members' activity levels, leading Aquis Markets
revenue to increase by 7% to £10.9m.
Overall pan-European order book
volumes for equity instruments decreased by 20% vis-à-vis 2022. In
spite of this, through continued development of the product suite
and the change of the proprietary trading rule on its UK and EU
trading platforms, Aquis maintained activity levels and increased
revenues. The rule change in particular demonstrates Aquis'
commitment to providing members with the greatest choice and
flexibility when transacting on the MTF platform, and resulted in
immediate growth in market share, with more expected
post-period.
Aquis Markets continued to
increase trading opportunities during 2023 offering clients the
ability to trade more than 3,500 stocks and ETFs across 16 European
Markets as at the end of December 2023.
Aquis Technologies
See here for an
introduction to Aquis Technologies
Aquis Technologies, where Aquis
licenses its leading exchange related technology to a variety of
international financial services clients across different asset
classes, performed strongly in 2023. The division has a strong
pipeline and offers material future growth opportunities. Net
revenue from technology licensing in 2023 grew 22% to £6.3m,
reflecting the increasing interest in our innovative, cutting-edge
in-house technology.
In 2023, Aquis Technologies
renewed or extended two contracts and secured two new contracts -
including one for a central bank - bringing the total to nine. In
addition, an existing contract moved from design and consultancy to
exchange delivery stage.
Aquis Technologies achieved two
notable milestones in 2023, delivering the first exchange grade
24/7 platform and becoming the first recognised investment exchange
(RIE) to run a cloud-based matching engine. In addition, the
division made further development progress of its technology
platforms to support growth across different asset classes
internationally.
Aquis Data
See here for an
introduction to Aquis Data
Data revenues increased 24% in
2023 to reach £3.7m as the Group continued to benefit from
increased recognition of the quality and competitive price of Aquis
market data. Data is a key pillar of the Aquis strategic plan, and
we expect that it will continue to make a significant contribution
to the Group in the medium-term.
In addition to the contribution
data brings to the Group results, management believe in the
medium-term it will increase further in importance when
consolidated tapes for the UK and Europe are implemented.
Implementation timetables from 2026 have been announced and it is
widely recognised and accepted that introducing consolidated tapes
for equities should improve the quality and pricing of market data
and lead to a fairer distribution of data fees across the various
European trading venues.
Aquis Stock Exchange (AQSE)
See here for an
introduction to Aquis Stock Exchange
The Aquis Stock Exchange had a
successful 2023, notwithstanding the extremely difficult IPO market
in the UK (and wider markets).
The exchange attracted 16 IPOs
during the year: the most of any growth company exchange in the UK
for the second year running. The business continued its integration
with the main retail investor platforms thereby ensuring access to
its broad range of companies, along with further strengthening its
relationships with market makers, corporate advisers and
brokers.
We continue to see
entrepreneurial, new-economy growth companies looking to the Aquis
Stock Exchange as a public markets partner, and we expect to
continue to make progress in building a competitive primary
marketplace over the years to come.
There is a clear and unique
opportunity to build a pan-European, technology-driven, listing
exchange for growth companies, overcoming several issues faced by
small and mid-cap market participants today, thereby transforming
the equity market landscape.
Further Investment in Research and Development
(R&D)
The Group continued to invest in
R&D throughout 2023 in order to maintain and enhance the
quality of our technology and its ability to deliver new products
and platform enhancements to our clients. The successes that we
have enjoyed during 2023 reflect the benefit of these
investments.
Our proven trading platform has
been developed in-house and is based on proprietary technology,
which does not rely on third party software suppliers. The quality
and flexibility of Aquis technology was demonstrated through the
implementation of our cloud-based matching engine for the Aquis
Stock Exchange and creation of the first ever exchange grade 24/7
market; two examples of the successful execution of our medium-term
Group strategy.
I believe this commitment to
continued investment in R&D gives us a significant competitive
advantage on functionality, price and ability to deliver. The
organisation of Aquis' technology department ensures expeditious
product development and, together with Aquis' further investment,
will allow the Group to react quickly to dynamic market conditions.
We intend to continue to work on further developments which will
foster future growth.
Resources
During 2023 we continued to invest
in personnel resources across a number of departments with
headcount across the London and Paris offices increasing by 14%. We
intend to further strengthen our team, particularly in support of
the sales and technology activities.
We also reorganised the senior
management team in November 2023 following the announcement that
Jonathan Clelland will retire in April 2024. Jonathan joined the
company at formation as CFO and COO. More recently and following
Richard Fisher's promotion to CFO, Jonathan took on the additional
role of CEO of Aquis Exchange Europe, the Group's Paris subsidiary.
He has played a major role in Aquis' success and growth over the
last 11 years; but I am confident that we have the right senior
management team in place to carry on this positive trajectory
following his departure.
Outlook
Aquis enjoyed a strong finish to
2023 with an improvement in equity markets share, technology
innovations, new contracts and further investment in our key
resources.
There remains some macro-economic
uncertainty which may negatively impact equity markets; however, I
believe that our strong team and technology platform should enable
us to overcome this and any future challenges. Although it is
difficult to predict with any degree of certainty the effect of
these events on the broader Group, I remain confident in our unique
proposition and our readiness to achieve the next level of
operational, financial and strategic success.
Aquis Markets has made an
encouraging start to the current financial year, particularly the
growth in lit market share as clients react positively to our rule
change.
We are excited about the
opportunities ahead for our Technologies division, following the
significant central bank contract win in 2023.
Aquis has grown significantly
during the last five years since we listed, underpinned by our
continued investment in our business and we remain committed to
continuing this investment to support the broadening of our market
position through innovation and excellence. We will also continue
to promote the Aquis values of transparency, fairness and
simplicity, enabling our end customers to get better performance
and results.
Our principal aim in the future
remains to deliver robust and sustainable returns for the benefit
of shareholders and all our other stakeholders in the medium and
long term.
Our highly capable and experienced
management team remains focused on serving our clients as we grasp
the opportunities ahead and, in particular, on delivering our
shared goals and technological innovations. The outlook for 2024 is
currently in line with Board expectations.
Alasdair Haynes
Chief Executive Officer
Financial Review
It has been a year of strong
revenue growth during 2023. The breakdown of the net revenues is as
follows:
Net revenue analysed by
division:
|
2023
|
2022
|
YoY Growth
|
|
|
|
|
|
£
|
£
|
%
|
Revenue analysed by division
|
|
|
|
|
|
|
|
Markets
|
10,919,263
|
10,244,767
|
6.6
|
Technology
|
6,281,934
|
5,168,063
|
21.6
|
Stock Exchange
|
1,771,284
|
1,647,195
|
7.5
|
Market Data
|
3,722,237
|
3,002,986
|
24.0
|
|
22,694,718
|
20,063,011
|
13.1
|
The Group generated a profit
before taxation for the year of £5.2m compared to £4.5m in the
previous year. The continued growth in profits during 2023 is
primarily attributable to increased exchange revenue through the
growing success of AMP and revenue growth from members'
subscriptions as a result of increased trading levels, along with
increased revenue from data, technology licensing and issuer
fees.
Profit before tax increased 15% to
£5.2m (2022: £4.5m) and EPS increased to 19.4p per share (2022:
17.2p). Profit before taxation is after applying amortisation
charges to internally generated intangible assets, as well as
depreciation and finance charges, which reflect the accounting
treatment of leases under IFRS 16.
The lease liabilities arising from
the Group's office leases are paid over the lease term, and attract
a finance expense amounting to £103k for 2023. The associated right
of use assets are depreciated on a straight-line basis over the
life of the lease, and attract a depreciation charge of £383k for
2023.
The Group generated an income tax
credit of £8k (2022: £157k) which was driven by an increase in net
deferred tax assets by £191k (2022: £302k). This was offset by an
overseas corporation tax charge of £184k (2022: £144k).
Revenue from licensing technology
contracts is subject to a provision under IFRS 9 for Expected
Credit Losses. For 2023 the application of IFRS 9 resulted in a net
impairment provision charge of £1,016k (2022: credit £133k)
recognised in the Income Statement.
The Group's cash and cash
equivalents as at 31 December 2023 increased to £14.8m (2022:
£14.2m) demonstrating the Group's strong cash generation. Over the
year the Group purchased £1.2m of treasury shares used to service
employee share schemes.
Group investments, productivity and capital
management
The Group continued to invest in
its technology offering, including the creation and enhancement of
new order types, enhancements to the surveillance system and
auction systems and further technical development to enable
technology clients to enter different asset classes. In addition,
the Group has made further investment in personnel as it continues
to develop capability and brand awareness.
In deciding its investment plans,
Group management receive a detailed analysis of the exchange and
client technical opportunities, and related time requirements on a
quarterly basis. These are used to determine personnel and other
resources requirements needed for allocation to these
opportunities. This information also includes an estimate of the
deployment cost.
The Board considers that its
investments have contributed to the Group's ability to gain new
clients, broaden its customer base and increase revenue. The Group
recognises the importance of continuing to enhance productivity,
and the commitment to future investment, both technically and in
terms of resource training and development. The Group has
established both short and long-term incentive plans based on
performance for all employees, which are set out in more detail in
the Report of the Nomination and Remuneration Committee and aligns
the employees' interests with the long-term strategic objectives of
the Group.
The Group is required to maintain
sufficient capital to meet the regulatory obligations for all
entities. These are calculated and updated annually. At 31 December
2023, the Company ICARA requirement (based on the 2022 published
financial Annual Report and Accounts) amounted to £5.2m (2022
£4.7m) and AQSE's FRR amounted to £2.4m (2022 £2.4m). The
individual entities of the Group meet the respective FCA and ACPR
capital adequacy requirements with plenty of headroom for further
investment in business operations.
Future development of the business
In order to support its long-term
vision and in order to strategically position for continued growth,
Aquis has invested significantly in its business differentiators,
R&D in the technology platform, brand and personnel resources.
The Group is cognisant of the importance of such investments to
maintain innovation and strong quality delivery.
During 2023, the Group has
continued to invest in AQSE, building market presence and brand
whilst also benefitting from synergies across the Group's exchange
memberships, data offering and use of technology.
Compliance with Section 172 (1) of the Companies Act
2006
Section 172 of the Companies Act
2006 requires a Director of a company to act in the way he or she
considers, in good faith, would most likely promote the success of
the company for the benefit of its members as a whole. As such,
Section 172 requires a Director to have regard, amongst other
matters, to the:
·
Likely consequences of any decisions in the long
term ;
·
Interests of the Company's employees;
·
Need to foster the Company's business
relationships with suppliers, customers and others;
·
Impact of the Company's operations on the
community and environment;
·
Desirability of the company maintaining a
reputation for high standards of business conduct; and
·
Need to act fairly between all members of the
company.
We set out below some examples of
how the Directors have had regard to the matters set out in Section
172(1) when discharging their Section 172 duty and the effect of
that on certain of the decisions taken by them.
Stakeholder Management
The Group complies with the
requirements prescribed by Section 414CZA of the Companies Act to
disclose how the Company promotes its success for the benefit of
all stakeholders.
The Board is acutely aware that
the Group's long term success and sustainable value creation is
critically reliant on maintaining good relations with all
stakeholders and ensuring that decisions are made after taking
account of the principal stakeholders' interests.
In arriving at these decisions,
the Board has assessed the likely consequences of any decision in
the long term, the interests of the Group's employees, the need to
foster the Group's business relationships with suppliers, customers
and others, the impact of the Group's operations on the broader
community, the desirability of the Group maintaining a reputation
for high standards of business conduct, and the need to act fairly
between shareholders of the Company.
Details on how Aquis and its Board
engage with its principal stakeholders, are given below.
Clients
Management proactively gathers
regular feedback from clients, both positive and negative, in order
to understand their ever-evolving needs, identify any improvements
that would result in better client outcomes or satisfaction and to
foster good client relations. This is regularly fed to the Board at
meetings or on an ad hoc basis, if required.
Shareholders
Executive Management meet with the
key shareholders at appropriate times during the year and provide
feedback to the Board. Additionally, the Chair and other
Non-Executive Directors continued, where possible, to engage with
shareholders through one-on-one meetings. Shareholders have been
extremely appreciative of these meetings and feedback is provided
to the Board in both written and verbal updates.
Employees
The Group promotes a positive and
inclusive culture. Team meetings and Group briefings are held on a
regular basis to ensure all personnel are informed of the Group's
performance and key strategic objectives and goals. Throughout the
year Glenn Collinson has acted as the Board's nominated
representative for employee engagement and facilitated meetings
with employees to ensure that their voices are heard by an
independent ear on the Board.
This was complemented mid-2023 by
the introduction of a monthly employee engagement pulse survey,
which allowed employees to provide feedback in confidence. These
survey results were consistently positive. The Executive develops
an action plan to address the key areas highlighted with particular
emphasis on our core values, listed later in this report, and on
investing further in employee training and career
development.
Suppliers
The Group has identified key
suppliers that include suppliers of office hardware and
consumables, as well as suppliers such as liquidity providers and
advisers such as auditors, brokers, recruitment agents, legal
advisers and PR consultants. The Group seeks the independent and
experienced view of its key advisers on various matters as and when
required. Sometimes this is directly with the Board, or the Board
will ensure that the Executive reports on advice provided to the
Group when needed.
Regulators
The Group takes an open and
co-operative approach with its regulators and positively embraces
the FCA's 11 principles of business. The Group submits regular
returns to the FCA, the ACPR and the AMF, and employees whose roles
encompass compliance activities are encouraged to attend regular
external presentations and workshops arranged by the regulators on
topical issues and receive regular professional update training.
All new and existing employees and advisers are made aware of the
FCA, ACPR and AMF's principles of business, and undergo training
required by finance professionals working at an equities exchange
group. The Group arranges regular compliance assessments to provide
assurance that the Group is meeting the requirements of the
regulator.
Board Effectiveness and High Standards of Business
Conduct
The Board remains committed to
high standards of corporate and regulatory governance. During the
year, the Board explored how to improve the Group's cyber security
risk management frameworks and became more informed about the
policy-making environment for financial markets in
Europe.
Consequences of Long-Term Decisions
Considerable time was spent
focusing on the Group's strategy and management were challenged to
think about the longer-term impact of decisions, how those
decisions were in line with the Group's values, the long term
sustainability of the Company and its subsidiaries and the desire
to maintain its reputation.
The Board and its Committees have
also further evolved during the year. Jonathan Clelland, COO, is
scheduled to retire in April 2024 and his UK and French
responsibilities are in the process of being assumed by Richard
Fisher, CFO, David Stevens, COO, and other members of the
management team. In addition, Deirdre Somers joined the Audit
Committee during the year.
In order to ensure that the Group
has the required skills and experience to effectively manage the
business and anticipate future changes, the Board operates a skills
matrix to map the requirements of the organisation against the
current skills and composition of the Group. Management plan to
recruit additional employees, in particular in the technology area
in the UK and France during 2024.
The Interests of Employees
The impact of COVID-19 continued
to decrease over 2023; however the Board continued to monitor the
day-to-day operations, the business continuity plans and the
employees' well-being carefully throughout the year. This included
work from home issues and the office environment. The Board has
also ensured engagement with employees through the engagement
survey and the nomination of a Board representative to meet with
employees when possible.
Our Purpose
In its role as a disruptor, Aquis'
aim has always been to improve financial markets by maintaining the
utmost transparency and least market toxicity for the benefit of
the end investor. In this way it reduces both the explicit and
implicit costs of trading that are borne by investors.
In addition, the Group is also
focused on stimulating growth in the economy by listening to the
needs of issuers and creating a supportive, fair and low-cost
environment for capital raisers to list instruments, particularly
for innovative growth companies while ensuring an appropriate
balance of investor protection
Our Culture, Diversity and Employee
Well-being
The Group is committed to ethical
business conduct and expects the highest standards of integrity to
be followed by the Directors and all employees. The Aquis Group
culture is underpinned by the following core values:
·
Trust (integrity, competence and deliver when we
say we will);
·
Proactivity (discipline and
initiative);
·
Openness (transparency);
·
Excellence (through creativity and
innovation);
·
Collaboration (through positive, collegiate and
free thinking); and
·
Respect.
Despite a further increase in
employee numbers in 2023 the Group has a relatively small resource
base, and therefore has concentrated on recruiting personnel with a
high degree of specialist skills. The Group provides on-going
training and support with the aim of ensuring that personnel retain
and enhance their technical skills and that employees feel that
there is opportunity to develop within the Group. The Group also
operates a flexible working policy to ensure it takes account of
individual employee requirements.
Aquis has a supportive and
inclusive culture throughout the whole workforce. We believe it is
in the best interests of the Company and the wider community to
promote diversity and eliminate discrimination in the workplace.
Our aim is to ensure that all employees and job applicants are
given equal opportunity and that our organisation is representative
of all sections of society. Each employee will be respected and
valued and able to give their best as a result.
The policy reinforces our
commitment to providing equality and fairness to all in our
employment and not providing less favourable facilities or
treatment on the grounds of age, disability, gender reassignment,
marriage and civil partnership, pregnancy and maternity, race,
ethnic origin, colour, nationality, national origin, religion or
belief, or sex and sexual orientation.
We are opposed to all forms of
unlawful and unfair discrimination. All employees, management,
agency, casual workers, and independent contractors no matter
whether they are part-time, full-time, or temporary, will be
treated fairly and with respect. When Aquis selects candidates for
employment, promotion, training, or any other benefit, it will be
on the basis of their aptitude and ability. All employees will be
given help and encouragement to develop their full potential and
utilise their unique talents with the aim that the skills and
resources of our organisation will be effectively utilised, and we
will maximise the efficiency of our whole workforce.
Aquis' commitments are:
·
To create an environment in which individual
differences and the contributions of all team members are
recognised and valued;
·
To create a working environment that promotes
dignity and respect for every employee;
·
To not tolerate any form of intimidation,
bullying, or harassment, and to discipline those that breach this
policy;
·
To make training, development, and progression
opportunities available to all staff;
·
To promote equality in the workplace;
· To encourage
anyone who feels they have been subject to discrimination to raise
their concerns so we can apply corrective measures;
·
To encourage employees to treat everyone with
dignity and respect; and
·
To regularly review all our employment practices
and procedures so that fairness is maintained at all
times.
Aquis has implemented an equality,
diversity and inclusion policy which has been communicated to all
employees emphasising that they are obligated to comply with all
its requirements and promote fairness in the workplace. This policy
is also drawn to the attention of agents, stakeholders, customers
and job applicants. It is therefore very pleasing to report that
gender and non-gender diversity strengthened further during the
course of the year and we believe our diversity and inclusion
policies will have a positive impact on the successful execution of
the Group strategy.
In 2021 the Group established
aspirational 3-year diversity targets for the Board and for the
employees. These targets were established to underpin the
importance the Board places on this issue and to provide clear
guidance and focus on these aspirations.
The targets and progress are
outlined below:
1. Reduce the gender (seniority)
pay gap to 25% (salary) - below the UK Financial Services industry
average (which for 2023 is 27.9%) On track: In 2023, the gender
(seniority) pay gap was 20% on base salary and 23% on base salary
plus annual bonus. This is an improvement on 2022 (28% and 33%) and
on base year 2021 (41% and 44%).
2. Increase the management team
diversity ratio On track: Progress towards the target made in 2023
following the promotions of two senior staff to ExCo. Management
intends to further improve on this metric in 2024.
3. Meet the Hampton Alexander
Review target of at least 33% of board members being female
Achieved: The overall female NED ratio will stand at 37.5% after
the 2024 AGM
4. Create a targeted diversity
inclusive supplementary development program for employees who we
believe have the potential to be promoted to Exco in the next 5
years On track: Management has identified a number of current
employees for the ExCo pipeline and development initiatives are in
place. This pipeline meets diversity targets.
The Group runs an annual anonymous
employee survey and arranges regular meetings with the Board
nominated employee representative. In addition, employees have
regular one-to-one sessions with their immediate line manager and
annual reviews where development plans are discussed to ensure
individuals' objectives are aligned to the business strategy and to
improve levels of employee engagement.
The Group has a commitment to
preventing slavery and human trafficking by ensuring our supply
agreements comply with the Modern Slavery Act 2015 ("MSA") with
zero tolerance for failings.
Consumption and the environment
It is a key objective of Aquis
Exchange PLC to be able to understand and reduce its own impact on
the environment. In 2023, Aquis underwent a voluntary carbon
footprint assessment, using ESGmark® to help us calculate, report
and reduce our carbon emissions. The sources that were measured for
2023 were:
Scope 1: Fuel consumption (gas
office heating in London premises)
Scope 2: Electricity consumption
in London premises
Scope 3: Electricity usage from
purchased data centre services, Well-To-Tank components of fuel and
electricity consumption in London premises
The carbon footprint assessment
found that Aquis Exchange PLC emitted a total of 497 tonnes of CO2e
(tCO2e) in 2023, or 7.4 tCO2e per FTE, using the market-based
emissions approach.
We continue to evaluate our
partners with respect to our value chain carbon footprint. For
example, the choice to use data centres with a 100% renewable
supply has reduced market-based emissions by 26% against the UK
residual fuel mix.
In 2023, Aquis Stock Exchange
became the first major regulated exchange to become cloud-based.
While most major financial exchanges operate using physical data
centres, the infrastructure required to run a trading environment
is not beneficial to the environment because of the fact that
servers must always be "on" and significant duplicative processing
occurs. If trading firms could leverage all the benefits of running
a cloud-based solution, the cost optimisation, scalability and
resiliency would make a positive contribution to reducing the
impact on the environment.
Our objectives for 2024 are
to:
·
Move towards renewable energy sources to reduce
Scope 2 emissions
·
Increase measurement of Scope 3 activities to
provide a more complete evaluation of our carbon footprint and
opportunities for reduction.
Governance
When Aquis listed in 2018, it
voluntarily chose to follow the highest standards of corporate
governance when it committed to adhering to the UK Corporate
Governance Code and the Directors have implemented appropriate
measures which have allowed Aquis to comply with all provisions of
the Code during the accounting period and up to the date of this
report.
Aquis and AQSE are directly
authorised and regulated by the FCA and AQEU is regulated by the
ACPR and the AMF. The Group fully complies with the relevant rules
and guidelines in all respects and monitors that compliance
throughout the year.
The Group's objective is to
establish an open and cooperative relationship with all regulators,
and it positively embraces the FCA's 11 principles of business. The
Group submits regular returns to the FCA, and employees whose roles
encompass compliance activities are encouraged to attend regular
external presentations and workshops arranged by the FCA on topical
issues, and also receive regular professional update training. All
new and existing employees and advisers are made aware of the FCA's
principles of business, and undergo training required by finance
professionals working at an equities exchange group. The Group
arranges regular compliance assessments to provide assurance that
the Group is meeting the requirements of the regulator.
The wider community
Aquis has been involved in a
number of charitable and community enhancing initiatives in the
year. In 2023, Aquis has continued the partnership with Ravens Wood
School in Bromley to spearhead an 'Investment Club' scheme with
A-Level Economics and Business students. Aimed at increasing
financial literacy and accessibility, students received tailored
talks and presentations from members of Aquis staff on aspects of
the financial services industry, public markets and career advice.
Students then created their own mockup AQSE universe portfolios
with an imaginary starting value of £50,000 using an app developed
by Aquis fed with real price data. Aquis intends to continue with
and expand this programme in future. Aquis also participated in the
London Youth Rowing Race the Thames project and employees have
shown their desire to make a difference.
Knowledge Transfer Project
Aquis has made significant
progress with the University of Derby partnership: a two-thirds
government funded Knowledge Transfer Project ("KTP") that involves
industry- led research and development on Artificial Intelligence
for trading platform surveillance alerts to develop an efficient
and accurate market abuse monitoring system.
Current surveillance systems are
deterministic, handcrafted, generate a high percentage of false
positive alerts and run a high risk of human fatigue and/or
boredom. Consequently, market abuse events may often be missed when
analysing a large number of false positives. As part of our mission
to improve transparency in financial markets, this partnership will
publish research papers on machine learning techniques that will
mitigate human error in detecting fraudulent trading practices that
harm the integrity of, and trust in, financial systems that are
critical for the modern economy.
As part of our mandate to strive
for innovation, we are excited for what the future holds for
machine learning and artificial intelligence in the trading
industry and are encouraged by the widespread support for this
project.
Next steps in our ESG journey
During the strategic planning
process, we assessed a number of potential ESG initiatives. Our
short-term goal is to complete the assessment of the sustainability
risk factors of the Group's day-to-day activities and translate
them into a meaningful Group-wide ESG strategy that can be woven
into our main strategic goals.
In addition, during 2024 we aim
to:
·
Develop a formal ESG policy;
·
Set formal short, medium and longer term
non-financial goals on material ESG topics that are directly
relevant to our business;
·
Introduce a first round of formal initiatives to
reduce ESG impact and manage ESG risk;
·
Complete a carbon footprint assessment for the
Group; and
·
Undertake an initial assessment of potential
broader ESG initiatives that may have a positive impact on the
wider community through the Group's role as a primary
exchange.
Principal risks and uncertainties
The identification and management
of risk is an integral part of the execution of Aquis' strategic
vision and operations. The below provides an overview of the
principal risks facing the Group:
Risk
|
Cyber security
|
Risk Description
|
The Group's networks and those of
its third-party service providers may be vulnerable to security
risks, cyber-attack or other leakage of sensitive data. Potential
outcomes of such an attack might include outages of the market,
attacks which seek to hold Aquis to ransom, unintended movements of
the company finances or generally create reputational and financial
risk.
|
Mitigation
|
The Board reviews a quarterly
dashboard that incorporates cyber technology monitoring. Regular
penetration tests are undertaken by a third party with the results
reviewed by the ARCC and Board and all employees undertake
cyber-training. Internal exercises to alert employees to the
possibility of phishing emails are held regularly. The MTF has
"kill" switches in place which are intended to restrict clients if
rogue behaviour is evidenced. The Group takes precautions to
protect data in accordance with applicable laws. Extensive risk
management protocols are adopted in the IT control framework so as
to prevent, detect and respond proactively to cyber security
attacks. The comprehensive back up and contingency plans in place
are tested regularly.
|
|
|
Risk
|
Key management personnel and
employees
|
Risk Description
|
The Group has a relatively low
headcount and hence is exposed to key person risk. The Group's
future development and prospects depend on its capacity to attract
and retain key personnel
|
Mitigation
|
The Group has established
emergency staffing plans for Senior Executives. The NRC reviews
immediate and medium- term succession plans and the ARCC assesses
key person risk.
Aquis employs a number of
strategies to ensure the Group is able to attract and retain a high
calibre of talent. The Group employs a rigorous recruitment process
and offers competitive salaries and benefits and employee share
option schemes, whilst promoting a culture of diversity, high
performance and inclusion from the top.
The Group continues to demonstrate
its ability to recruit high-quality individuals and is clearly
viewed as a dynamic and attractive employer.
|
|
|
Risk
|
Client concentration
|
Risk Description
|
The nature of equity financial
markets is that the majority of pan-European secondary market
trading volumes are undertaken by a small pool of market
participants. This risk has been increased as some of the smaller
market participants have decided to route via larger banks that
maintain direct exchange memberships.
The Group revenue is therefore
dependent on a concentrated number of customers and significant
change to a customer's flow could negatively impact
revenues.
|
Mitigation
|
The Group continues to broaden its
client base to reduce client concentration but recognises that
volumes from smaller participants are not likely in aggregate to be
as large.
The Group has offset some of the
risk of industry concentration through the quality of the MTF
exchange offering and the strengthening of the product
offering.
The Group seeks to maintain
positive relationships with all current and future members of its
MTF exchange and to be vigilant for change at any client. The Group
has diversified its business activities to include primary markets,
technology sales, data and market gateways.
|
|
|
Risk
|
Liquidity provision concentration
-Aquis Markets
|
Risk Description
|
In most trading venues globally,
there is considerable symbiosis between the venue and the liquidity
providers on which the venues rely to make continuous prices and
enhance liquidity.
In Europe, where there is
significant competition between a limited number of trading venues,
the ability to attract significant liquidity to the venue is
critical. The barriers to entry are even higher for new trading
venues, which must build liquidity from scratch and differentiate
themselves to attract and retain it.
Market makers themselves have
differing business models and trading strategies; as a result, they
may be attracted to different types of venues depending on the
value proposition. Banks also provide liquidity on the Aquis
platform but historically this has not been as significant as the
market makers.
Aquis has a highly differentiated
business model for its pan-European secondary market trading
activities compared to the incumbent platforms, both dramatically
reducing the cost of trading and also permitting market makers to
decide if they wish to interact with aggressive trading from other
market makers. This differentiated and flexible approach has been a
driver of Aquis' success to date.
The number of market makers that
have trading models currently aligned with Aquis' business
philosophy is even more concentrated than on the main markets.
Therefore, Aquis has always relied heavily on a small number of key
market makers to support liquidity and a wider group to supplement
it. These market makers have not always been the same organisations
and have changed over time.
Nonetheless, it is a risk that if
a key market maker decides to change its business model or
philosophy it would cause a short-term disruption in the total
liquidity provided.
|
Risk Mitigation
|
This risk is mitigated internally
through a number of actions including those set out below, and
externally through the likely evolution of the structure of the
European equity market.
Internally, management maintain a
close relationship with its market makers to ensure that there
continues to be positive synergies for all parties. Aquis has been
successful during 2023 and will continue to actively seek to grow
membership and diversify its liquidity providers.
Following the change to the
proprietary trading rule in November 2023 Aquis noted a dilution of
the concentration risk away from a small number of liquidity
providers to a broader set of investor flows.
Externally, the market share
growth that Aquis has achieved to date is a strong indication of
the benefits to its members and liquidity providers and makes it
likely that natural liquidity will continue to grow, making the
Aquis marketplace deeper and more attractive for all
counterparties.
Additional liquidity providers are
likely to follow over time as they should be incentivised to adapt
or create new models that capitalise on Aquis' value proposition
and interaction with a wider set of trading flows.
The number of liquidity providers
in European equity markets is still relatively small today,
reflecting the continued need to invest in technology and
regulatory oversight. However, the Group's innovative offerings
will continue to counter this risk.
|
|
|
Risk
|
Liquidity Provision Concentration
-AQSE
|
Risk Description
|
A relatively small population of
market makers support AQSE with similar risks to those identified
above with regard to potential short-term impact if one or more
market makers were to change their business model or
approach.
|
Mitigation
|
The number of market makers active
on AQSE has and is anticipated to increase as the number of
companies and reputation of the exchange continues to
improve.
|
|
|
Risk
|
Supplier risk
|
Risk Description
|
The Group is exposed to the
failure of a key supplier. Examples include loss of data supplied
to Aquis which is an important input into the trading
platform.
This may impact the ability to
undertake market surveillance.
|
Mitigation
|
Aquis has back up plans in place
for key suppliers and has agreed procedures and thresholds in place
for managing this if necessary.
|
Financial risks
The Group's current assets
comprise cash and liquid resources including trade receivables
arising directly from its operations. The main financial risks are
capital, credit, liquidity and foreign currency risks. The Group
has approved FX hedging policies in place and as at 31 December
2023 actively managed the balance sheet and risks with the use of
financial derivatives. A significant % of revenues remain GBP
denominated whilst the Group enters into forward FX trades as
appropriate and will continue to do so in the future where any
further contracts are non-GBP denominated.
The Group has continued to
increase its profits during 2023 demonstrating that it has been
able to manage strategic and operational risks; however, future
results could be negatively impacted if any of the risks outlined
above were to occur. Financial risk management disclosures have
been made in Note 5 of the Group Financial Statements accompanying
this report.
Viability statement
The Directors have undertaken a
detailed review of the Group's prospects, taking account of the
Group's current position and principal underlying business risks
and its prospects for the period January 2024 - December 2026.
These include considering the impact during 2023 and potential
future impact due to macroeconomic crises and/or military
conflicts. The Directors consider this to be an appropriate period
considering the target business and revenue growth, and the
objective to maintain and enhance profitability during this
period.
The Group maintains a strong
equity capital position which has been strengthened during 2023 as
profitability has been enhanced. This is complemented by the Group
achieving and in certain areas exceeding its goals. Taking into
account its ability to execute its principal objectives during
continued challenging circumstances, the Directors have a
reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment.
This assessment has concentrated
in particular on the key differentiating factors that the Group has
established, the quality and resiliency of the Group's technology,
the brand and market position, and the reputation, quality and
experience of its key personnel. This Strategic Report was approved
by the Board of Directors on 20 March 2024 and is signed on its
behalf by:
Alasdair Haynes, Chief Executive Officer
Richard Fisher, Chief Financial Officer
Consolidated Statement of Comprehensive
Income
For the year ended 31 December
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
|
|
Company
|
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
|
|
Notes
|
|
£
|
£
|
|
£
|
£
|
Profit and loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
10
|
|
23,710,941
|
19,929,527
|
|
13,147,339
|
10,342,525
|
Impairment credit / (charge) on
contract assets
|
11
|
|
(1,016,223)
|
133,484
|
|
(1,016,223)
|
133,484
|
Impairment (charge) on trade and
other receivables
|
11
|
|
(79,395)
|
(12,784)
|
|
(59,608)
|
-
|
Other gains
|
12
|
|
51,407
|
-
|
|
51,407
|
-
|
Operating expenses
|
12
|
|
(16,396,478)
|
(14,239,918)
|
|
(6,874,123)
|
(5,616,089)
|
Earnings before interest,
taxation, depreciation
and amortisation
|
|
|
6,270,252
|
5,810,309
|
|
5,248,792
|
4,859,920
|
Depreciation and
amortisation
|
12
|
|
(1,372,565)
|
(1,259,492)
|
|
(1,299,276)
|
(1,187,569)
|
Finance expense
|
12, 25
|
|
(103,249)
|
(67,691)
|
|
(88,571)
|
(51,069)
|
Finance income
|
12
|
|
400,449
|
43,283
|
|
127,447
|
16,537
|
Profit before taxation
|
|
|
5,194,887
|
4,526,409
|
|
3,988,392
|
3,637,819
|
Income tax credit
|
14, 15
|
|
7,789
|
157,203
|
|
49,837
|
163,925
|
Profit for the year
|
|
|
5,202,676
|
4,683,612
|
|
4,038,229
|
3,801,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other comprehensive income
Items that may be reclassified subsequently to profit or
loss:
Foreign exchange differences on
translation of foreign operations
|
|
|
(120,961)
|
181,370
|
|
-
|
-
|
|
|
|
|
|
|
|
|
Other comprehensive income for the
year
|
|
|
(120,961)
|
181,370
|
|
-
|
-
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year
|
|
|
5,081,715
|
4,864,982
|
|
4,038,229
|
3,801,744
|
Earnings per share (pence)
Basic
|
|
|
|
|
|
|
|
Ordinary shares
|
16
|
|
19
|
17
|
|
15
|
16
|
Diluted
|
|
|
|
|
|
|
|
Ordinary shares
|
16
|
|
19
|
17
|
|
14
|
16
|
Consolidated Statement of Financial
Position
As at 31 December 2023
|
|
|
|
|
|
|
Group
|
Company
|
|
|
2023
|
2022
|
2023
|
2022
|
|
Notes
|
£
|
£
|
£
|
£
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
17
|
83,481
|
83,481
|
-
|
-
|
Intangible assets
|
17
|
1,501,885
|
1,032,224
|
1,501,885
|
1,032,224
|
Property, plant and
equipment
|
18
|
3,818,841
|
4,155,215
|
3,350,793
|
3,628,081
|
Investment in
subsidiaries
|
19
|
-
|
-
|
6,884,202
|
6,884,202
|
Investments
|
20
|
591,945
|
-
|
591,945
|
-
|
Investment in trusts
|
21
|
-
|
-
|
4,389,445
|
3,350,325
|
Deferred tax asset
|
14
|
1,785,331
|
1,593,931
|
1,506,022
|
1,456,184
|
Trade and other
receivables
|
22
|
5,811,089
|
5,352,110
|
5,795,918
|
5,329,674
|
|
|
13,592,572
|
12,216,961
|
24,020,210
|
21,680,690
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
22
|
6,894,936
|
4,135,426
|
6,736,943
|
10,571,256
|
Derivative financial
instruments
|
5
|
51,407
|
-
|
51,407
|
-
|
Cash and cash
equivalents
|
23
|
14,765,910
|
14,170,965
|
6,356,259
|
5,595,827
|
Total assets
|
|
35,304,825
|
30,523,352
|
37,164,819
|
37,847,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other
payables
|
24
|
4,471,470
|
4,268,735
|
3,665,932
|
8,992,201
|
Net current assets
|
|
17,240,783
|
14,037,656
|
9,478,677
|
7,174,882
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Lease liabilities
|
25
|
2,457,105
|
2,874,877
|
2,100,483
|
2,449,312
|
|
|
2,457,105
|
2,874,877
|
2,100,483
|
2,449,312
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
6,928,575
|
7,143,612
|
5,766,415
|
11,441,513
|
|
|
|
|
|
|
|
|
|
|
|
|
Net total assets
|
|
28,376,250
|
23,379,740
|
31,398,404
|
26,406,260
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Called up share capital
|
26
|
2,751,678
|
2,750,945
|
2,751,678
|
2,750,945
|
Share premium account
|
30
|
11,809,757
|
11,785,045
|
11,809,757
|
11,785,045
|
Other reserves
|
31
|
2,741,589
|
1,813,119
|
2,741,589
|
1,813,119
|
Treasury Shares
|
27
|
(4,389,445)
|
(3,350,325)
|
-
|
-
|
Retained earnings
|
|
15,519,507
|
10,316,831
|
14,095,380
|
10,057,151
|
Foreign currency translation
reserve
|
|
(56,836)
|
64,125
|
-
|
-
|
Total equity
|
|
28,376,250
|
23,379,740
|
31,398,404
|
26,406,260
|
Statement of Changes in Equity
For the year ended 31 December
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
|
Notes
|
Share
Capital
|
Share
Premium
|
Share Based Payment
Reserve
|
Retained
Earnings
|
Treasury
Shares
|
Foreign Currency Translation
Reserve
|
Total
|
Balance at 1 January 2022
|
|
2,750,545
|
11,771,462
|
1,118,314
|
5,633,219
|
(1,526,835)
|
(117,245)
|
19,629,460
|
Profit for the year
|
|
-
|
-
|
-
|
4,683,612
|
-
|
-
|
4,683,612
|
Foreign exchange differences on
translation of foreign operations
|
|
-
|
-
|
-
|
-
|
-
|
181,370
|
181,370
|
Total comprehensive income for the year
|
|
-
|
-
|
-
|
4,683,612
|
-
|
181,370
|
4,864,982
|
Issue of new shares
|
26, 30
|
400
|
13,583
|
-
|
-
|
-
|
-
|
13,983
|
Movement in share based payment
reserve
|
31
|
-
|
-
|
694,805
|
-
|
-
|
-
|
694,805
|
Movement in treasury
shares
|
27
|
-
|
-
|
-
|
-
|
(1,823,490)
|
-
|
(1,823,490)
|
Balance at 31 December 2022
|
|
2,750,945
|
11,785,045
|
1,813,119
|
10,316,831
|
(3,350,325)
|
64,125
|
23,379,740
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2023
|
|
2,750,945
|
11,785,045
|
1,813,119
|
10,316,831
|
(3,350,325)
|
64,125
|
23,379,740
|
Profit for the year
|
|
-
|
-
|
-
|
5,202,676
|
-
|
-
|
5,202,676
|
Foreign exchange differences on
translation of foreign operations
|
|
-
|
-
|
-
|
-
|
-
|
(120,961)
|
(120,961)
|
Total comprehensive income for the year
|
|
-
|
-
|
-
|
5,202,676
|
-
|
(120,961)
|
5,081,715
|
Issue of new shares
|
26, 30
|
733
|
24,712
|
-
|
-
|
-
|
-
|
25,445
|
Movement in share based payment
reserve
|
31
|
-
|
-
|
928,470
|
-
|
-
|
-
|
928,470
|
Movement in Treasury
Shares
|
27
|
-
|
-
|
-
|
-
|
(1,039,120)
|
-
|
(1,039,120)
|
Balance at 31 December 2023
|
|
2,751,678
|
11,809,757
|
2,741,589
|
15,519,507
|
(4,389,445)
|
(56,836)
|
28,376,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
Notes
|
Share
Capital
|
Share
Premium
|
Share Based Payment
Reserve
|
Retained
Earnings
|
Total
|
Balance at 1 January 2022
|
|
2,750,545
|
11,771,462
|
1,448,430
|
6,255,407
|
22,225,844
|
Profit and total comprehensive
income for the year
|
|
-
|
-
|
-
|
3,801,744
|
3,801,744
|
Issue of new shares
|
26, 30
|
400
|
13,583
|
-
|
-
|
13,983
|
Movement in share based payment
reserve
|
31
|
-
|
-
|
364,689
|
-
|
364,689
|
Balance at 31 December 2022
|
|
2,750,945
|
11,785,045
|
1,813,119
|
10,057,151
|
26,406,260
|
|
|
|
|
|
|
|
Balance at 1 January 2023
|
|
2,750,945
|
11,785,045
|
1,813,119
|
10,057,151
|
26,406,260
|
Profit and total comprehensive
income for the year
|
|
-
|
-
|
-
|
4,038,229
|
4,038,229
|
Issue of new shares
|
26, 30
|
733
|
24,712
|
-
|
-
|
25,445
|
Movement in share based payment
reserve
|
31
|
-
|
-
|
928,470
|
-
|
928,470
|
Balance at 31 December 2023
|
|
2,751,678
|
11,809,757
|
2,741,589
|
14,095,380
|
31,398,404
|
Statement of Cash Flows
For the year ended 31 December
2023
|
|
|
|
Group
|
|
Company
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
Notes
|
|
£
|
|
£
|
|
£
|
|
£
|
Net cash flows from
operating activities
|
|
28
|
|
4,103,719
|
|
4,020,715
|
|
4,340,136
|
|
2,201,847
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
Recognition of intangible
assets
|
|
17
|
|
(1,081,918)
|
|
(777,465)
|
|
(1,081,918)
|
|
(777,465)
|
Purchase of property, plant and
equipment
|
|
18
|
|
(411,316)
|
|
(769,419)
|
|
(409,731)
|
|
(752,938)
|
Investment acquisitions
|
|
20
|
|
(591,945)
|
|
-
|
|
(591,945)
|
|
-
|
Interest received
|
|
12
|
|
384,712
|
|
28,722
|
|
112,154
|
|
2,416
|
Purchase of treasury
shares
|
|
|
|
-
|
|
-
|
|
(1,196,309)
|
|
(1,955,720)
|
Net cash (used in) investing activities
|
|
|
|
(1,700,467)
|
|
(1,518,162)
|
|
(3,167,749)
|
|
(3,483,707)
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
Issue of new shares
|
|
26, 30
|
|
25,445
|
|
13,983
|
|
25,445
|
|
13,983
|
Principal portion of lease
liability
|
|
5, 25
|
|
(516,482)
|
|
(300,994)
|
|
(437,400)
|
|
(231,259)
|
Purchase of treasury
shares
|
|
|
|
(1,196,309)
|
|
(1,955,720)
|
|
-
|
|
-
|
Net cash (used in) financing activities
|
|
|
|
(1,687,346)
|
|
(2,242,731)
|
|
(411,955)
|
|
(217,276)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash
equivalents
|
|
|
|
715,906
|
|
259,822
|
|
760,432
|
|
(1,499,136)
|
Cash and cash equivalents at the
beginning of the year
|
|
|
|
14,170,965
|
|
14,046,399
|
|
5,595,827
|
|
7,094,963
|
Effect of exchange rate changes on
cash and cash equivalents
|
|
|
|
(120,961)
|
|
(135,256)
|
|
-
|
|
-
|
Cash and cash equivalents at the end of the
year
|
|
|
|
14,765,910
|
|
14,170,965
|
|
6,356,259
|
|
5,595,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
-
|
|
-
|
|
-
|
NOTES TO THE FINANCIAL STATEMENTS
1
SIGNIFICANT CHANGES IN THE REPORTING PERIOD
The following events and
transactions had an impact on the financial position and
performance of the Group and/or Company during the
period:
Operating segments (Note 6) have
been split into four business divisions (previously three).
Comparative disclosures for the prior year have been updated to
ensure comparability between the two reporting periods.
2
BASIS OF PREPARATION AND ACCOUNTING POLICIES
Company
information
Aquis Exchange PLC is a public
limited company which is incorporated and domiciled in the United
Kingdom. Its registered office is located at 63 Queen Victoria
Street, London, EC4N 4UA. The Company Number is
07909192.
Accounting
convention
The Group's consolidated and the
Company's financial statements are prepared in accordance with
UK-adopted international accounting standards and the Companies Act
2006 requirements.
The financial statements have been
prepared on the historical cost basis as modified by the
revaluation of financial instruments carried at fair value through
profit and loss.
The principal accounting policies
applied in the preparation of these financial statements are set
out below. These policies have been consistently applied to all the
years presented, unless otherwise stated.
Going
concern
At the time of approving the
financial statements, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future and thus continue to adopt the
going concern basis of accounting in preparing the financial
statements.
The Group has made an increased
profit in 2023 against prior year and has substantial cash reserves
and a strong balance sheet, due to high levels of investment within
the Group. There has been a growth in revenue between the current
year and comparative years. Additional revenue growth is projected
for 2024, with profits forecasted for future years. In making this
assessment the Directors have considered their knowledge of
internal sales pipelines alongside expected trends in European and
UK securities markets. Future profitability is also considered from
a cost perspective with assumptions used for inflation and interest
rates affecting operating expenditures and interest income on bank
deposits. The nature of Group costs are predictable and consistent
to the extent that the Directors are able to rely on current cash
positions in excess of regulatory minima to predict future cash
positions.
There remains uncertainty over
market conditions ahead when considering continued military action
in Ukraine, intensifying conflict in the Middle East between Israel
and Palestine and Houthi rebel activity affecting commerce in the
Red Sea, in addition to national elections in many countries, and
more specifically the upcoming General Election in the UK and
Presidential Election in the US. In spite of these factors, Aquis
has demonstrated resilience during uncertain market conditions and
the Directors do not believe that there will be a material adverse
effect on Group performance.
Taking the above into account, the
principal risks discussed in the Strategic Report section of the
Annual Report, the financial risks and mitigating actions taken by
management (see Note 5), and the Group's current financial
performance position, the Directors do not foresee any material
uncertainty in the Group's ability to continue to prepare the
financial statements on a going concern basis over a period of at
least 12 months from the date of approval of these financial
statements.
Consolidation
In preparing these financial
statements, the group has applied the consolidation principles in
IFRS 10, Consolidated Financial Statements. This requires the Group
to consolidate subsidiary entities it controls. Control is
determined based on the ability to direct the activities of the
entity that significantly affect its returns.
The Group assesses control on a
continuing basis and includes entities it controls as of the end of
the reporting period.
The financial statements of the
consolidated entities are prepared using consistent accounting
policies and are presented as if they were a single economic
entity. Intercompany transactions, balances, and unrealized gains
and losses on transactions between consolidated entities are
eliminated in full.
The Group consolidated financial
statements also include treasury shares and cash held by two
separate trusts ("the Trusts") that administers the Company's
employee share incentive plan and also hold shares purchased by the
Group in preparation for future settlement of employee share awards
made to date. The Trusts have been consolidated based on the IFRS
10 criteria for control over the Trust being met:
• The Trusts were established to
(i) facilitate the acquisition and holding of shares under the
Aquis Exchange PLC Share Incentive Plan and (ii) facilitate the
acquisition and holding of shares under the Aquis Exchange PLC
Restricted Share Plan.
• The activities of the Trusts are
limited by the agreements in place; and
• The Trusts do not have any
assets outside of the partnership share money received and the
shares purchased. The use of any shares or cash that remain in the
Trust funds once the trustee no longer holds any shares relating to
the SIP,RSP or PPO, is directed by the company. The Trust itself
has no rights to any dividends.
Accounting
Policies
Revenue
Revenue comprises amounts derived
from the provision of services which fall within the Company's
ordinary activities. It represents amounts receivable for
subscription fees, the licensing of software, the provision of data
to third-party vendors, and fees relating to listings on the Aquis
Stock Exchange (AQSE), all of which are net of value added tax.
Revenue is recognised once the performance obligations for each
activity have been satisfied.
All the revenue streams are
generated by contracts with customers and revenue is therefore
recognised in accordance with IFRS 15.
Revenue from exchange
subscription-based services is recognised over time when the
services are rendered.
Revenue from licensing contracts
is assessed for each contract and split into five Performance
Obligations (see Note 10 for further details on 'POs' and Note 4
for Judgements and estimates):
• Project Implementation / Design
fees (PO1) recognised over time as the obligations are
met;
• Licencing fees (PO2) recognised
at a point in time when the licence is transferred to the
customer;
• Maintenance fees (PO3)
recognised over time as the obligations are met;
• Live services fees (PO4)
recognised over time as the obligations are met;
• Hosting fees (PO5) recognised
over time as the obligations are met.
Revenue from the provision of data
to third-party vendors is comprised of the annual fees paid by the
redistributors, member firms and multi-media firms for access to
real time and/or end of day data, and is recognised over time. An
additional monthly fee is received based on the number of users the
vendors provide the data to each month. This additional monthly fee
is variable and is based on usage for the prior month. The fee is
charged in arrears and is recognised in the month it is
incurred.
Revenue from AQSE issuer fees is
comprised of initial application and admission fees, annual fees,
and further issue fees, these are all recognised over time under
IFRS 15 except further issue fees which are recognised at a point
in time.
Application and admission fees are
charged upfront to prospective companies admitted to AQSE markets.
These are recognised monthly over the average expected life of
company admission periods (further details about this estimate are
set out in the following section).
Annual fees are paid upfront
annually by companies with securities listed on AQSE and are
recognised over the year.
Further issue fees are incurred by
existing issuers who have already contributed an application and
admission fee, and are recognised at a point in time on the date
the new security is available for trade on AQSE.
Estimated listing period for
Aquis Stock Exchange securities
In recognising application and
admission fees, the Company determines the expected length of time
each new security will be listed on AQSE. The estimate is based on
historical analysis of listing durations in respect of the
companies listed on AQSE. The length of time a security remains
listed incorporates significant uncertainty as it is based on
factors outside the control of the Company and which are inherently
difficult to predict.
Based on the available information
and incorporating management's predictions, it is currently
estimated that an average security will remain listed for a period
of 9 years. Application and admission fees are recognised monthly
over a period of time.
It is estimated that a one year
increase/ decrease in the deferral period would cause a £8k
decrease /£9k increase in annual revenue released respectively. The
estimated listing periods will be reassessed at each reporting date
to ensure they reflect the best estimates of the Group.
Intangible assets other than
goodwill
Internally generated
intangible assets
Internally developed intangible
assets arising from the capitalisation of Research and Development
expenditures, product analysis, quality assurance, and website
development costs are recognised in the financial statements when
all of the following criteria are met:
• The technical feasibility of
completing the intangible asset so that it will be available for
use or sale is established;
• There is an intention to
complete the intangible asset and use or sell it;
• The Group has the ability to use
or sell the intangible asset;
• The existence of a market for
the output of the intangible asset or the intangible asset itself
or, if it is to be used internally, the usefulness of the
intangible asset can be demonstrated;
• Adequate technical, financial
and other resources are available to complete the development and
to use or sell the intangible asset; and
• The Group has the ability to
measure reliably the expenditure attributable to the intangible
asset during its development.
Where the above criteria are not
met, costs incurred in research and development are recognised in
the Statement of Comprehensive Income as incurred.
Amortisation is recognised in
order to write off the cost or valuation of the assets, less their
residual values over their useful lives. The development of trading
platforms has been amortised over 3 years on a straight-line basis
reflecting management's estimate of the useful life of the
technology, the rationale of which is discussed in Note
4.
Website technology and
communication licences
Website technology and
communication licences represent externally acquired intangible
assets and are recognised in the financial statements as the Group
receives the right to control and use the product over a period of
time. Website technology represents external development costs to
design the Group's website. Communication licences relate to
licences that transfer the right to obtain a benefit from
intellectual property.
Amortisation on these assets is
recognised over 3 years on a straight line basis which represents
the estimated useful life of both types of asset.
Acquisition costs of
customer lists and IP Addresses
The price of and acquisition costs
incurred when obtaining customer lists and IP Addresses is
capitalised in line with IAS 38. Management expects that future
economic benefits are attributable to the entity over an indefinite
term for these assets. Therefore, the useful economic life is
considered indefinite and no annual amortisation is recognised.
These assets are subsequently recognised as cost less impairment,
and at each balance sheet date Management consider any indicators
of impairment which would lead to a detailed impairment review to
ascertain their carrying amount.
Business
Combination
Business combinations are
accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration
transferred, which is measured at fair value. Acquisition-related
costs are expensed as incurred and recognised as non-underlying
transaction costs in the income statement.
Goodwill
In March 2020 the acquisition of
AQSE gave rise to goodwill in the consolidated financial
statements. Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration transferred over the
net identifiable assets acquired and liabilities assumed. Goodwill
is assessed for impairment annually, with any impairment charge
recognised in the Statement Of Comprehensive Income. Note 17
provides further detail on the impairment assessment for goodwill
as at 31 December 2023.
Property, plant and
equipment (excluding right-of-use assets)
All property, plant and equipment
are stated at historical cost less depreciation or impairment.
Historical cost includes expenditure that is directly attributable
to the acquisition of the items.
Subsequent expenditure is included
in the asset's carrying amount or is recognised as a separate
asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably. All other repair
and maintenance costs are charged to the income statement during
the financial period in which they are incurred.
Depreciation is recognised so as
to write off the cost or valuation of assets, less their residual
values, over their useful lives on the following basis:
• Fixtures, fittings and
equipment: 5 years straight line.
• Computer equipment: 3 - 7 years
straight line.
Impairment of tangible and
intangible assets
At each reporting end date, the
Group reviews the carrying amounts of its tangible and intangible
assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where it
is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
The recoverable amount is the
higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of an
asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised immediately in profit or loss, unless
the relevant asset is carried at a revalued amount, in which case
the impairment loss is treated as a revaluation
decrease.
Cash and cash
equivalents
Cash and cash equivalents include
cash at bank.
The Group and Company as regulated
bodies are required to maintain liquid cash assets as part of their
prudential reporting responsibilities to external regulators.
During the financial year ended 31 December 2023 the Group was
required to maintain £4,196k of available cash assets as part of
its liquidity requirements (Company £1,710k). Further details of
the Group's risk management approach to regulatory capital
commitments is included in Note 5.
Financial
assets
Trade and other
receivables
Trade receivables are amounts due
from customers for services performed in the ordinary course of
business. Other receivables are defined as amounts due that are
outside the ordinary course of business. If collection is expected
in one year or less (or in the normal operating cycle of the
business if longer) they are classified as current assets.
Otherwise they are presented as non-current assets.
Contract
assets
Contract assets are recognised for
licensing fees recognised at inception of a licensing contract but
not yet billed under IFRS 15. Contract assets are initially
measured at fair value and subsequently measured at amortised cost
and are stated net of any expected credit loss provision (ECL)
recognised in accordance with IFRS 9, as detailed in Note 11.
Contract assets are presented on the Statement of Financial
Position as trade receivables. The right to consideration becomes
unconditional once the customer has been billed.
Investments
At initial recognition, the group
measures investments in equity instruments at its fair value plus,
in the case of a financial asset not at fair value through profit
or loss (FVTPL), transaction costs that are directly attributable
to the acquisition of the financial asset. Transaction costs of
financial assets carried at FVTPL are expensed in profit or loss.
The group subsequently measures
all equity investments at fair value. Where the group's management
has elected to present fair value gains and losses on equity
investments in OCI, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such investments
continue to be recognised in profit or loss as other income when
the group's right to receive payments is established. Changes in
the fair value of financial assets at FVPL are recognised in other
gains / (losses) in the statement of profit or loss as applicable.
Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from
other changes in fair value.
Rent deposit
asset
Under IFRS 16 a rent deposit is
accounted for as a financial asset if the collateral provided to
the lessor is not a payment relating to the right to use the
underlying assets and hence is not a lease payment as
defined.
Impairment of financial
assets
The Group has considered the
impact of the application of an expected credit loss model when
calculating impairment losses on current and non-current contract
assets and other financial assets at amortised cost (presented
within trade and other receivables). In applying IFRS 9 the Group
must consider the probability of a default occurring over the
contractual life of its trade receivables and contract asset
balances on initial recognition of those assets. Note 11 details
the Group's credit risk assessment procedures.
Financial
liabilities
After initial recognition all
financial liabilities are subsequently measured at amortised cost
using the effective interest method. The effective interest method
is a method of calculating the amortised cost of a financial
liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees and
points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or (where
appropriate) a shorter period, to the amortised cost of a financial
liability. In 2023 the Group did not hold any Financial liabilities
beyond Trade and other payables and the lease liabilities
recognised under IFRS 16 as described in the "Leases" sub-section
below.
Trade and other
payables
Trade payables are obligations to
pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified
as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). If
not, they are presented as non-current liabilities. Trade and other
payables are not interest bearing and are initially recognised at
fair value.
Financial assets at fair
value through profit or loss
Financial assets at fair value
through profit or loss are carried at fair value with net changes
in fair value reflected in the income statement. This category
includes derivative instruments.
Equity
instruments
Ordinary shares are classified as
equity. Incremental costs directly attributable to the issue of new
ordinary shares or options are charged against the share premium
account.
Earnings per
share
The earnings per share (EPS)
calculations are based on basic earnings per ordinary share as well
as diluted earnings per ordinary share. The basic EPS is calculated
by dividing the profit after tax of the Group by the weighted
average number of ordinary shares that were in issue during the
year. The diluted EPS takes into account the dilution effects which
would arise on conversion of all outstanding share options and
share awards under the Enterprise Management Incentive (EMI)
scheme.
Taxation
The tax expense/(credit)
represents the sum of the tax currently payable/(repayable) and
movements in deferred tax balances.
An R&D tax credit is claimed
annually from HMRC based on the employee costs involved in
developing Aquis' systems and technology.
Current
tax
The current income tax charge/
(credit) is calculated on the basis of the tax laws enacted or
substantively enacted at the balance sheet date in the country
where the company operates and generates taxable income. Management
periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax
authorities.
Deferred
tax
Deferred income tax is recognised,
using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred income tax is
determined using tax rates (and laws) that have been enacted or
substantially enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is realised, or
the deferred income tax liability is settled.
Deferred income tax assets are
recognised only to the extent that it is probable that future
measurable taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax assets and
liabilities (note 15) are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities and when the deferred income taxes assets and
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Employee
benefits
The costs of short-term employee
benefits are recognised as a liability and an expense, unless those
costs are required to be recognised as part of the cost of group
developed trading platforms.
The cost of any unused holiday
entitlement is recognised in the period in which the employee's
services are received.
Termination benefits are
recognised as an expense when the Group is demonstrably committed
to terminate the employment of an employee or to provide
termination benefits, as set out within IAS 19.
Retirement
benefits
Pension
obligations
The Group has no further payment
obligations once the contributions have been paid. The
contributions are recognised as an employee benefit expense when
they are due. Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in the future payments
is available.
Share-based
payments
EMI
Options
Equity-settled share-based
payments are measured at fair value at the date of grant by
reference to the fair value of the equity instruments granted using
the US Options Binomial model. The fair value determined at the
grant date is expensed on a straight-line basis over the vesting
period, based on the estimate of shares that will eventually vest.
A corresponding adjustment is made to equity.
When the terms and conditions of
equity-settled share-based payments at the time they were granted
are subsequently modified, the fair value of the share-based
payment under the original terms and conditions and under the
modified terms and conditions are both determined at the date of
the modification. Any excess of the modified fair value over the
original fair value is recognised over the remaining vesting period
in addition to the grant date fair value of the original
share-based payment. The share-based payment expense is adjusted if
the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from
employee redundancies) are treated as an acceleration of vesting
and the amount that would have been recognised over the remaining
vesting period is recognised immediately.
Employee share incentive
plan
Shares purchased under the share
incentive plan are recognised as share-based payments under IFRS 2.
Partnership shares are purchased by employees and matching shares
are those purchased by Aquis at a ratio of 2:1. The shares are held
in a trust ("the Trust"), with matching shares required to be held
for three years before being transferred to the employee. The fair
value of both the partnership and matching shares are recognised in
the share-based payment reserve.
Partnership shares vest
immediately while matching shares will vest over the three-year
holding period. The market value of shares when they are purchased
is assumed to approximate the fair value of the shares.
The cash transferred to the Trust
is recognised as an investment in the Company's accounts. In line
with IFRS 10 guidance, the Trust is consolidated in the Group
accounts with the fair value of the shares held in the trust
recognised as a debit entry within equity.
Restricted share
plan
The Restricted share plan is a
share based scheme awarded to staff and has a vesting period of
three years after grant subject to continued employment. Similar to
share-based payments they are measured at fair value determined at
the grant date using the Black Scholes model. The fair value is
expensed on a straight-line basis over the vesting period, with the
corresponding adjustment being made to reserves.
Company Share Option
Plan
The company share option plan is a
share based scheme awarded to staff and has a vesting period of
three years subject to continued employment. Similar to share-based
payments they are measured at fair value determined at the grant
date using the Black Scholes model. The fair value is expensed on a
straight-line basis over the vesting period, with the corresponding
adjustment being made to reserves.
Premium Priced Options
Plan
The PPO scheme is an option based
share scheme and has a vesting period of three years after the
grant date subject to continued employment. Similar to share-based
payments they are measured at fair value determined at the grant
date using the Black Scholes model. The fair value is expensed on a
straight-line basis over the vesting period, with the corresponding
adjustment being made to reserves.
Leases - as a
lessee
The Group assesses whether a
contract is or contains a lease at inception of the contract. The
Group recognises a right of use asset and a corresponding lease
liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a
lease term of 12 months or less) and leases of low value assets
(such as tablets and personal computers, small items of office
furniture and telephones). For these leases, the Group recognises
the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from
the leased assets are consumed.
The lease liability is initially
measured at the present value of the lease payments that are not
paid at the commencement date, discounted by using the rate
implicit in the lease. Lease payments included in the measurement
of the lease liability comprise:
• Fixed lease payments (including
in-substance fixed payments), less any lease incentives
receivable;
• Variable lease payments that
depend on an index or rate, initially measured using the index or
rate at the commencement date;
• The amount expected to be
payable by the lessee under residual value guarantees;
• The exercise price of purchase
options, if the lessee is reasonably certain to exercise the
options; and
• Payments of penalties for
terminating the lease, if the lease term reflects the exercise of
an option to terminate the lease.
The lease liability is presented
as a separate line in the consolidated statement of financial
position and is subsequently measured by increasing the carrying
amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to
reflect the lease payments made. The Group remeasures the lease
liability (and makes a corresponding adjustment to the related
right-of-use asset) whenever:
• The lease term has changed or
there is a significant event or change in circumstances resulting
in a change in the assessment of exercise of a purchase option, in
which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.
• The lease payments change due to
changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability is
remeasured by discounting the revised lease payments using an
unchanged discount rate (unless the lease payments change is due to
a change in a floating interest rate, in which case a revised
discount rate is used).
• A lease contract is modified and
the lease modification is not accounted for as a separate lease, in
which case the lease liability is remeasured based on the lease
term of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective date of the
modification.
The right-of-use assets comprise
the initial measurement of the corresponding lease liability, lease
payments made at or before the commencement day, less any lease
incentives received and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and
impairment losses. The right-of-use assets are included in
property, plant and equipment in the consolidated statement of
financial position and are depreciated over the term of the lease.
The Group applies IAS 36 to determine whether a right-of-use asset
is impaired and accounts for any identified impairment loss as
described in the 'Impairment of tangible and intangible assets'
policy. Variable rents that do not depend on an index or rate are
not included in the measurement of the lease liability and the
right-of-use asset.
Foreign
exchange
Functional and presentation
currency
Items included in the financial
statements of the Group are measured using the currency of the
primary economic environment in which the entity operates. The
financial statements are presented in UK Pound Sterling (£), which
is the Group's functional and presentational currency.
Transactions and
balances
Foreign currency transactions are
translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions and
from the translation of monetary assets and liabilities denominated
in foreign currencies at year end exchange rates are recognised in
profit or loss.
All foreign exchange gains and
losses recognised in the income statement are presented net within
'operating expenses'. For the purpose of presenting consolidated
financial statements, the assets and liabilities of the Group's
foreign operations are translated at exchange rates prevailing on
the reporting date. Income and expense items are translated at the
average exchange rates for the period, unless exchange rates
fluctuate significantly during that period, in which case the
exchange rates at the date of transactions are used. Exchange
differences arising, if any, are recognised in other comprehensive
income and accumulated in a foreign exchange translation
reserve.
On disposal of a foreign
operation, exchange differences previously recognised in other
comprehensive income are reclassified to the income
statement.
Foreign currency contracts used to
manage foreign currency risk are accounted for as derivatives as
described above under "Financial instruments at fair value through
profit or loss".
3
ADOPTION OF NEW AND REVISED STANDARDS AND CHANGES IN ACCOUNTING
POLICIES
New IFRS Standards that are
effective for the current year
There were no new standards
effective during the year ended 31 December 2023. One standard has
been amended and is effective as of 2023 as set out below. This has
not impacted the current year financial statements.
IFRIC agenda decision - Definition
of a lease
|
Substitution Rights (IFRS 16) -
effective 1 Apr 2023
|
Standards which are in issue
but not yet effective
At the date of authorisation of
these financial statements, the following Standards and
Interpretations, which have not yet been applied in these financial
statements, were in issue. The Directors do not expect that the
adoption of the Standards listed below will have any impact on the
financial statements of the Group in future periods:
Amendments to IAS 21
|
The Effects of Changes in Foreign
Exchange Rates: Lack of Exchangeability (Issued August 2023) -
effective 1 Jan 2025
|
IFRS S2
|
Climate-related disclosures
(Issued June 2023) - effective 1 Jan 2024
|
4
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
In applying the Group's accounting
policies, which are described in Note 2, the Directors are required
to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from
other sources. Management has shown these matters as judgements
where they relate to a significant policy and the judgement has a
material impact on the reported balance. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision
affects both current and future periods.
Critical
judgements
The following are the critical
judgements, apart from those involving estimations (which are
presented separately below), that the Directors have made in the
process of applying the Group's accounting policies and that have
the most significant effect on the amounts recognised in financial
statements.
Judgements in relation to
performance obligations
In making their judgement, the
Directors considered the detailed criteria for the recognition of
revenue set out in IFRS 15, and in particular, whether revenue is
recognised at a point in time or over time. Following an assessment
of the technology licensing contract portfolio, and the obligations
that Aquis has under each contract, the Directors are satisfied
that obligations contained therein be split into the following
performance obligations, and that the revenue from each licensing
contract should be assessed individually. The identified
performance obligations and the timing of revenue recognition on
delivering the licence contracts as follows:
• Implementation/ project fees:
these are upfront, non-refundable fees that a customer pays in
order to obtain the user agreement. Even if the user acceptance
certificate is never issued, the implementation fee cannot be
reclaimed and so the revenue is guaranteed and can be recognised
from the time of invoice as Aquis becomes unconditionally entitled
to payment but in practice recognition will often be deferred until
the work is completed.
• Licensing fees: The customer is
liable to pay the monthly licensing fee from the date of signing
the user acceptance agreement (contract inception date). At this
point in time Aquis has fulfilled its promise to deliver the
licence (i.e. the system has been deployed in the client's
production environment) and this performance obligation is
fulfilled. Management uses judgement when assessing the
recoverability of the licencing fees, and recognises them only when
their collection is assumed to be highly probable. This assessment
takes into consideration the current status of the client's
business, including whether the exchange system is active with
products/ securities added and members trading on it. The licensing
fees are recognised at a point in time, which occurs after the
contract is signed and once Aquis is satisfied that receiving the
licencing fees is highly probable.
• Maintenance fees: fees to
maintain the system are recognised over the course of the licensing
contract as Aquis fulfils its performance obligation to maintain
the system. Management have estimated a fixed annual amount per
contract, which reflects the time spent supporting the client's
platform and upgrading the software in accordance with the
contractual terms.
• Live services: fees charged to
support infrastructure, operations, and first-line market
surveillance as part of running regulatory grade exchanges. These
services are recognised over time when Aquis provides the
service.
• Hosting: these fees are charged
for the use of Aquis' hardware on a monthly basis. These services
are recognised over time as the customer requires.
Changes in identification of
performance obligations could impact the timing of revenue
recognition for licensing contract assets and is thus a critical
accounting judgement.
Capitalisation of internally
generated intangible assets resulting from Research and
Development
Internally generated intangible
assets are capitalised when, in management's judgement, the
criteria for capitalisation under IAS 38 (listed in Note 2) have
been met. The direct costs incurred in the research and development
of Aquis' exchange platform and associated technology and systems
are capitalised. Management reviews the time spent by the
development team in developing and maintaining the systems used
internally by Aquis when determining the amount to be capitalised
within each period.
Critical accounting
estimates
The key assumptions concerning the
future, and other key sources of estimation uncertainty at the
reporting date that may have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are discussed
below.
Estimating the useful life
of intangible assets
The expected useful life of most
intangible asset is estimated to be 3 years, but some intangible
assets are considered to have an indefinite useful economic life.
In making this judgement management have taken into account product
upgrade cycles, the pace of change of regulation as well as
benchmarking against other companies with internal systems and
technology research and development. Intangible assets with
indefinite lives are reviewed for indicators of impairment at the
end of each accounting period.
Expected credit loss of
contract assets
An impairment for the expected
credit loss of contract assets that arise as a result of applying
IFRS 15 to licensing revenue is required under IFRS 9. This
impairment is an accounting estimate which is calculated based on
the Directors' best estimates of the probability of default and
loss given default. The quantification of the assumptions and
stresses for the year are disclosed in Note 11 of the financial
statements.
In arriving at these estimates,
the Directors have assessed the range of possible outcomes using
reasonable and supportable forward-looking information, which is
based on assumptions for the future movement of different economic
drivers and how these drivers will affect each other.
Aquis' assessment of the credit
risk associated with a licensing customer is conducted at inception
of the contract (but before the user agreement is signed) and
includes factors that are specific to the customer, general
economic conditions and an assessment of both the current as well
as the forecast direction of these conditions.
The credit risk assessment is
conducted by means of a take-on assessment which comprises of a
series of relevant criteria for a licensing contract that are
scored according to the specific circumstances of the customer,
with scores for each parameter typically ranging from 1-5. The
assessment evaluates the following:
• Level of funding;
• Regulatory approvals;
• Market, industry and business
model;
• Macro-economic
forecasts;
• Corporate governance/ Group
management;
• Whether the client is revenue
generating;
• Level of client
profitability;
• Contract length and the
associated range of economic scenarios therein;
• Payment history; and
• External credit
ratings.
The above assessment will
determine the customer category upon inception of the contract, and
the inputs to the expected credit loss model is determined
thereon.
The credit risk assessment and
associated inputs to the expected credit loss model (probability of
default and loss given default) are critical assessments that could
impact both the provision for expected credit losses as well as the
movement in the provision reflected in the income
statement.
Deferred tax
asset
Deferred tax assets (Note 14) are
recognised to the extent that their utilisation is probable. The
utilisation of deferred tax assets will depend on whether it is
possible to generate sufficient taxable income in the respective
tax type and jurisdiction. A total net deferred tax asset is
recognised in the current period, since profitability is expected
to continue for at least the next 3 years. The deferred tax asset
is calculated based on expected profitability over this period as
Aquis is a high growth company and there is considerable
uncertainty in estimating financial performance beyond this length
of time.
Various factors are used to assess
the probability of the future utilisation of deferred tax assets,
including, operational plans and loss-carry forward periods. To
reflect the uncertainty in the accuracy of business forecasts, the
model uses modest growth rates and applies a probability weighting
to each type of revenue.
Share-based
payments
The US binomial model and Black
Scholes model are used to estimate the fair value of the EMI, CSOP,
RSP and PPO options. The resulting fair values are recognised over
the vesting period as an expense in the Income Statement, with the
corresponding amounts recognised as equity in the balance sheet.
The model requires the following inputs: grant date, exercise
price, expiry, expected life of options, expected volatility, and
the risk-free interest rate. The expected life and expected
volatility require the use of estimates. Volatility is estimated
based on the historical average for the available data up to the
grant date, while the expected life of the options is based on
management's judgement of when the options will be exercised, which
is assumed to be an average of 5 years.
Valuation of
derivatives
The company uses foreign currency
forwards to manage its exposure to exchange rate fluctuations.
Although in the current period the reported value is immaterial,
there is potential for changes based on large currency or relative
interest rate shifts. As such, they are a source of estimation
uncertainty. Note 24 provides additional information on the fair
value of derivatives.
5
FINANCIAL RISK MANAGEMENT
The Group seeks to protect its
financial performance and the value of its business from exposure
to adverse changes in capital commitments, as well as credit,
liquidity and foreign exchange risks.
The Group's financial risk
management approach is not speculative. The Group's Audit, Risk and
Compliance Committee provides assurance that the governance and
operational controls are effective to manage risks within the
Board-approved risk appetite, supporting a robust Group risk
management framework.
The Group's objectives when
managing these risks are detailed below.
Capital risk management and
capital commitments
Risk description
|
Risk management approach
|
There is a risk that Group
entities may not maintain sufficient capital to meet their
obligations. The Group comprises regulated entities. It considers
that increases in the capital requirements of its regulated
companies, or a scarcity of equity (driven by its own performance
or financial market conditions) either separately or in combination
are the principal risks to managing its capital.
AQXE has a total capital
regulatory requirement of £5.2m as at 31 December 2023, with
available capital of £26.4m, reflecting a surplus of £20.1m / 478%.
The total regulatory requirement is set as the total capital ratio
plus Pillar 2 add on.
Within the AQSE subsidiary the
capital regulatory minima is set by the FCA through the Financial
Resource Requirement (FRR) which is currently set at £2.4m.
Financial resources available (representing net assets) were £2.8m
at 31 December 2022, reflecting a £0.4m headroom above regulatory
minima.
|
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern so that it can provide returns for shareholders
and benefits for other stakeholders.
The Group has mitigated the level
of risk significantly by ensuring that, as set out within the risk
description, each entity in the Group maintains a level of capital
that is well in excess of regulatory requirements. Maintaining a
strong capital structure is a key priority for the Group. If there
was an erosion of capital for any reason the Group may issue new
shares or sell assets to ensure capital adequacy requirements
continue to be met. The directors have assessed the impact of a 10%
fall in the Group's available capital and concluded the impact not
to be material.
The Group supports both Aquis
Europe and AQSE in maintaining capital adequacy, and holds
sufficient capital to be able to inject capital into the businesses
as and when required, and has historically done so within AQSE
after the Company had been acquired to enable its capital to be
sufficient as the company was brought up to the current profitable
trading levels evidenced from 2022.
The Group continuously monitors
its level of capital in order to ensure it remains compliant with
regulatory capital requirements and performs monthly and quarterly
reporting on capital balances and associated headroom. Proposed
investment requirements, capital expenditure and potentially
increasing capital resources through equity or debt issuance are
assessed annually as part of the budgeting process, as well as on
an ad-hoc basis as
required.
|
Credit
risk
Risk description
|
Risk management approach
|
The Group's credit risk relates to
its customers being unable to meet their obligations to the Group
either in part or in full.
|
The Directors make a judgement on
the credit quality of the Group's customers based upon the
customers' financial position, the recurring nature of billing and
collection arrangements and, historically, a low incidence of
default.
Aquis' assessment of the credit
risk associated with a licensing customer is conducted at inception
of the contract (but before the user agreement is signed) and
includes factors that are specific to the customer, general
economic conditions and an assessment of both the current as well
as the forecast direction of these conditions. Based on this
assessment, the prospective customer is assigned to a customer
category with an appropriate risk rating.
Aquis' credit risk management
processes are applied to all trade receivables and are calculated
using a lifetime ECL method, as detailed in Note 11. The Directors
have stress tested the current approach to managing this risk and
believe it to be appropriate. If 10% of trade receivables
outstanding from 31 December 2023 were to default, the hypothetical
impairment charge would be immaterial.
|
Liquidity
Risk
Risk description
|
Risk management approach
|
The Group's operations are exposed
to liquidity risk to the extent that they are unable to meet their
daily payment obligations.
|
The Group maintains sufficient
liquid resources to meet its financial obligations as and when they
become due in the ordinary course of business. Management monitors
forecasts of the Group's cash flow quarterly through an assessment
of cash resources that are in excess of regulatory capital
requirements. The Group is solvent with net current assets in
excess of £17.2 million (2022: £14.0 million), with the majority of
the debtor's book being short term in nature. The Group is also
funded entirely by equity, with no external debt funding
obligations to be met. The Directors have stress tested the current
approach to managing this risk and believe it to be appropriate. If
group net assets were to fall by 10% there would still be a
significant surplus to meet the Group's liabilities as they fall
due.
|
Interest Rate
Risk
Risk description
|
Risk management approach
|
The Group is not materially
exposed to market risk including interest rate (see below for FX
risk).
There is no negative exposure to
interest rate changes since the Group and Company have no external
debt obligations, and the interest rate on the lease liability is
the rate implicit in the lease and as such is not subject to change
over the term of the lease.
|
Bank deposits are primarily placed
over night or as interest rates have risen the Group has started to
prudently place some funds on deposit for up to 3 months. The
Directors have stress tested the current approach to managing this
risk and believe it to be appropriate. The only adverse impact
would be if interest rates were to fall and reduce interest income
on bank deposits. As at 31 December 2023 total interest income on
deposits was £0.4 million (2022: £0.1 million).
|
FX Risk
Risk description
|
Risk management approach
|
The Group operates in the UK and
Europe, with Sterling as its principal currency of operation. The
Group invoices its customers primarily in GBP, but some contracts
have been structured using USD and as such foreign exchange risk
arises from invoicing in USD. The Group incurs the majority of
expenses in GBP, but some costs are denominated in USD and
EUR.
The value of the USD denominated
contract is considered material to Group and Company's balance
sheet. However, the foreign exchange exposure for costs invoiced in
other currencies is considered immaterial.
An immaterial amount of cash held
by Aquis Exchange Europe SAS is held in a euro denominated bank
account and an immaterial amount of USD held by Aquis Exchange PLC,
with the remaining cash held in Sterling denominated bank
accounts.
|
Foreign exchange risk has
previously arisen on foreign currency denominated costs within
Aquis Exchange PLC or through the translation of GBP denominated
balances within Aquis Exchange SAS. At the end of 2022 Aquis
entered into a USD denominated technology contract and hence opened
a USD account which holds a low level of USD at the year end £0.2
million (2022: £0.2 million). The contract will deliver USD cash
flows in the future from 2023 and so in January 2023 Aquis entered
into an FX forward arrangement to lock in the future GBP benefit of
this contract.
As at the year end at 31 December
2023 the value of the FX forward was in the money at £51,407 (2022:
nil). The Directors performed stress testing on the cost base of
the group in non-functional currencies and concluded that an
adverse movement of 10% versus GBP would not render a material
impact.
|
The statement of financial
position is analysed below:
Group
|
Amortised
Cost
|
Fair Value through
P&L
|
Fair Value through
OCI
|
Non-financial
instruments
|
Total in the Statement of
Financial Position
|
31 December 2023
|
Trade and other
receivables
|
3,033,440
|
-
|
-
|
9,672,585
|
12,706,025
|
Cash and bank balances
|
14,765,910
|
-
|
-
|
-
|
14,765,910
|
Investments
|
-
|
-
|
591,945
|
-
|
591,945
|
Trade and other
payables
|
2,632,181
|
-
|
-
|
1,311,950
|
3,944,131
|
Lease Liabilities
|
2,984,444
|
-
|
-
|
-
|
2,984,444
|
Derivatives
|
-
|
51,407
|
-
|
-
|
51,407
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
|
Amortised
Cost
|
Fair Value through
P&L
|
Fair Value through
OCI
|
Non-financial
instruments
|
Total in the Statement of
Financial Position
|
31 December 2022
|
Trade and other
receivables
|
2,317,384
|
-
|
-
|
7,170,152
|
9,487,536
|
Cash and bank balances
|
14,170,965
|
-
|
-
|
-
|
14,170,965
|
Trade and other
payables
|
2,022,394
|
-
|
-
|
1,723,541
|
3,745,935
|
Lease Liabilities
|
3,397,677
|
-
|
-
|
-
|
3,397,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
Amortised
Cost
|
Fair Value through
P&L
|
Fair Value through
OCI
|
Non-financial
instruments
|
Total in the Statement of
Financial Position
|
31 December 2023
|
Trade and other
receivables
|
3,009,785
|
-
|
-
|
9,523,076
|
12,532,861
|
Cash and bank balances
|
6,356,259
|
-
|
-
|
-
|
6,356,259
|
Investments
|
-
|
-
|
591,945
|
-
|
591,945
|
Trade and other
payables
|
2,971,755
|
-
|
-
|
256,777
|
3,228,532
|
Lease Liabilities
|
2,537,883
|
-
|
-
|
-
|
2,537,883
|
Derivatives
|
-
|
51,407
|
-
|
-
|
51,407
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
Amortised
Cost
|
Fair Value through
P&L
|
Fair Value through
OCI
|
Non-financial
instruments
|
Total in the Statement of
Financial Position
|
31 December 2022
|
Trade and other
receivables
|
8,539,250
|
-
|
-
|
7,361,680
|
15,900,930
|
Cash and bank balances
|
5,595,827
|
-
|
-
|
-
|
5,595,827
|
Trade and other
payables
|
8,082,958
|
-
|
-
|
471,843
|
8,554,801
|
Lease Liabilities
|
2,886,712
|
-
|
-
|
-
|
2,886,712
|
The following tables detail the
Group and Company's remaining contractual maturity for its
non-derivative financial liabilities with agreed repayment periods.
The tables have been drawn up based on the undiscounted cash flows
of financial liabilities based on the earliest date on which the
Group or Company can be required to pay.
|
|
|
|
|
Group
|
1 Year
|
2-5 years
|
5+ years
|
Total
|
31 December 2023
|
|
|
|
|
Trade and other
payables
|
3,944,131
|
-
|
-
|
3,944,131
|
Lease Liabilities
|
527,339
|
1,599,056
|
1,337,759
|
3,464,154
|
|
4,471,470
|
1,599,056
|
1,337,759
|
7,408,285
|
|
|
|
|
|
31 December 2022
|
|
|
|
|
Trade and other
payables
|
3,745,935
|
-
|
-
|
3,745,935
|
Lease Liabilities
|
522,800
|
1,580,900
|
1,293,977
|
3,397,677
|
|
4,268,735
|
1,580,900
|
1,293,977
|
7,143,612
|
|
|
|
|
|
Company
|
1
Year
|
2-5
years
|
5+
years
|
Total
|
31 December 2023
|
|
|
|
|
Trade and other
payables
|
3,228,532
|
-
|
-
|
3,228,532
|
Lease Liabilities
|
437,400
|
1,239,300
|
1,202,850
|
2,879,550
|
|
3,665,932
|
1,239,300
|
1,202,850
|
6,108,082
|
|
|
|
|
|
31 December 2022
|
|
|
|
|
Trade and other
payables
|
8,554,801
|
-
|
-
|
8,554,801
|
Lease Liabilities
|
437,400
|
1,239,300
|
1,210,012
|
2,886,712
|
|
8,992,201
|
1,239,300
|
1,210,012
|
11,441,513
|
6
OPERATING SEGMENTS
The Aquis Group can be split into
four revenue streams, each offering multiple products and services
and benefitting from Group synergies. The specific focus of these
activities are:
1) Aquis Exchange - operator of MTF
and related services. The Group operates two MTFs: Aquis Exchange
(AQXE), which is UK regulated and Aquis Exchange Europe (AQEU),
which is French regulated.
2) Aquis Stock Exchange (AQSE) -
primary listings and trading business. Within this division is AQSE
Main Market, AQSE Growth Market, and AQSE Trading;
3) Aquis Technologies - developer of
exchange technology and services. The product offering includes
Aquis Matching Engine, Aquis Market Surveillance, Aquis Market
Gateway and related services including market surveillance and
operations.
4) Aquis Data - Market Data services
across the MTF and Recognised Investment Exchanges operated by
Group entities.
Aquis Exchange PLC is the parent
company and comprises AQXE and Aquis Technologies. It owns 100% of
its two subsidiaries, AQEU and AQSE. Management monitors the
Group's overall performance regularly using a set of established
Key Performance Indicators including revenue, net profit and
EBITDA. When monitoring the performance of each operating segment
individually, management examines the discrete financial
information available which will normally include revenue and gross
profit for each division. Assets and liabilities, income tax and
IFRS 2 charges are not reported internally to Chief Operating
Decision Maker. In line with IFRS 8 the operating segments are
reported separately as follows:
2023 Group
|
Aquis
Markets
|
Aquis Stock
Exchange
|
Aquis
Technologies
|
Aquis Data
|
Total
|
Revenue
|
10,919,263
|
1,771,284
|
7,298,157
|
3,722,237
|
23,710,941
|
Impairment credit / (charge) on
Contract Assets
|
-
|
-
|
(1,016,223)
|
-
|
(1,016,223)
|
Net revenue
|
10,919,263
|
1,771,284
|
6,281,934
|
3,722,237
|
22,694,718
|
Impairment (charge) on trade and
other receivables
|
-
|
(19,787)
|
(58,108)
|
(1,500)
|
(79,395)
|
Other gains
|
-
|
-
|
51,407
|
-
|
51,407
|
Costs
|
(7,134,010)
|
(1,634,472)
|
(3,550,170)
|
(2,992,168)
|
(15,310,820)
|
Share based payments
|
(499,963)
|
(81,102)
|
(334,162)
|
(170,431)
|
(1,085,658)
|
EBITDA
|
3,285,290
|
35,923
|
2,390,901
|
558,138
|
6,270,252
|
Depreciation, amortisation and net
interest
|
(292,793)
|
4,626
|
(583,951)
|
(203,247)
|
(1,075,365)
|
Profit before tax
|
2,992,497
|
40,549
|
1,806,950
|
354,891
|
5,194,887
|
2022 Group
|
Aquis
Markets
|
Aquis Stock
Exchange
|
Aquis
Technologies
|
Aquis Data
|
Total
|
Revenue
|
10,244,767
|
1,647,195
|
5,034,579
|
3,002,986
|
19,929,527
|
Impairment credit / (charge) on
Contract Assets
|
-
|
-
|
133,484
|
-
|
133,484
|
Net revenue
|
10,244,767
|
1,647,195
|
5,168,063
|
3,002,986
|
20,063,011
|
Impairment (charge) on trade and
other receivables
|
-
|
(12,784)
|
-
|
-
|
(12,784)
|
Other gains
|
-
|
-
|
-
|
-
|
-
|
Costs
|
(6,485,855)
|
(1,446,507)
|
(3,037,456)
|
(2,450,228)
|
(13,420,046)
|
Share based payments
|
(377,564)
|
(61,247)
|
(252,354)
|
(128,707)
|
(819,872)
|
EBITDA
|
3,381,348
|
126,657
|
1,878,253
|
424,051
|
5,810,309
|
Depreciation, amortisation and net
interest
|
(488,177)
|
(103,202)
|
(507,527)
|
(184,994)
|
(1,283,900)
|
Profit before tax
|
2,893,171
|
23,455
|
1,370,726
|
239,057
|
4,526,409
|
The tables above represent the
segment-level information that is monitored by the Chief Operating
Decision Makers, which are the Chief Executive Officer, Chief
Operating Officer and the Chief Financial Officer. All non-current
assets (contract assets) are held centrally by Aquis Exchange PLC,
other than the lease for the Paris office assigned to AQEU. The
geographical analysis of the non-current assets is as follows; UK:
£5,817k, Singapore: £3,099k and South Africa: £1,928k, Total:
£10,844k.
At a Group level revenue from any
one customer does not exceed 10% of total Group Revenue (2022:
none). At a Company level revenue from two technology licence
customers exceeded 10% of total Company revenues, and amounted to
£4,171k (2022: £3,383k).
2023 Company
|
Aquis
Markets
|
Aquis Stock
Exchange
|
Aquis
Technologies
|
Aquis Data
|
Total
|
Revenue
|
3,994,208
|
-
|
7,298,157
|
1,854,974
|
13,147,339
|
Impairment credit / (charge) on
Contract Assets
|
-
|
-
|
(1,016,223)
|
-
|
(1,016,223)
|
Net revenue
|
3,994,208
|
-
|
6,281,934
|
1,854,974
|
12,131,116
|
Impairment (charge) on trade and
other receivables
|
-
|
-
|
(58,108)
|
(1,500)
|
(59,608)
|
Other gains
|
-
|
-
|
51,407
|
-
|
51,407
|
Costs
|
(742,211)
|
|
(3,550,170)
|
(1,496,084)
|
(5,788,465)
|
Share based payments
|
(499,963)
|
(81,102)
|
(334,162)
|
(170,431)
|
(1,085,658)
|
EBITDA
|
2,752,034
|
(81,102)
|
2,390,901
|
186,959
|
5,248,792
|
Depreciation, amortisation and net
interest
|
(579,451)
|
4,626
|
(583,951)
|
(101,624)
|
(1,260,400)
|
Profit before tax
|
2,172,583
|
(76,476)
|
1,806,950
|
85,335
|
3,988,392
|
2022 Company
|
Aquis
Markets
|
Aquis Stock
Exchange
|
Aquis
Technologies
|
Aquis Data
|
Total
|
Revenue
|
3,894,736
|
-
|
4,970,622
|
1,477,167
|
10,342,525
|
Impairment credit / (charge) on
Contract Assets
|
-
|
-
|
133,484
|
-
|
133,484
|
Net revenue
|
3,894,736
|
-
|
5,104,106
|
1,477,167
|
10,476,009
|
Impairment (charge) on trade and
other receivables
|
-
|
-
|
-
|
-
|
-
|
Other gains
|
-
|
-
|
-
|
-
|
-
|
Costs
|
(533,647)
|
-
|
(3,037,456)
|
(1,225,114)
|
(4,796,217)
|
Share based payments
|
(377,564)
|
(61,247)
|
(252,354)
|
(128,707)
|
(819,872)
|
EBITDA
|
2,983,525
|
(61,247)
|
1,814,296
|
123,346
|
4,859,920
|
Depreciation, amortisation and net
interest
|
(598,622)
|
(23,455)
|
(507,527)
|
(92,497)
|
(1,222,101)
|
Profit before tax
|
2,384,903
|
(84,702)
|
1,306,769
|
30,849
|
3,637,819
|
7
EMPLOYEES
The monthly average number of
persons (including directors) employed by the Group during the year
was:
|
|
|
Group
|
2023
|
2022
|
|
Number
|
Number
|
Management
|
3
|
3
|
IT
|
23
|
20
|
Compliance and
Surveillance
|
13
|
11
|
Operations
|
8
|
7
|
Business Development
|
21
|
18
|
Finance / HR / Admin
|
5
|
5
|
Marketing
|
2
|
2
|
|
75
|
66
|
|
|
|
Company
|
2023
|
2022
|
|
Number
|
Number
|
Management
|
2
|
2
|
IT
|
21
|
18
|
Compliance and
Surveillance
|
6
|
5
|
Operations
|
8
|
7
|
Business Development
|
13
|
10
|
Finance / HR / Admin
|
5
|
5
|
Marketing
|
2
|
2
|
|
57
|
49
|
Their aggregate remuneration was
comprised of:
|
|
|
Group
|
2023
|
2022
|
|
£
|
£
|
Salaries and wages
|
7,523,034
|
6,598,428
|
Social security costs
|
1,056,857
|
967,032
|
Other pension costs
|
314,281
|
159,366
|
Share based payments
|
1,085,658
|
819,872
|
Employee benefits
|
238,727
|
170,102
|
|
10,218,557
|
8,714,800
|
|
|
|
Company
|
2023
|
2022
|
|
£
|
£
|
Salaries and wages
|
5,264,174
|
4,698,746
|
Social security costs
|
766,553
|
680,908
|
Other pension costs
|
207,351
|
116,151
|
Share based payments
|
1,085,658
|
819,872
|
Employee benefits
|
238,723
|
169,596
|
|
7,562,459
|
6,485,273
|
8
RETIREMENT BENEFIT SCHEME
Defined contribution schemes
The Group operates a defined
contribution pension scheme for all qualifying employees. The
assets of the scheme are held separately from those of the Company
in an independently administered fund.
A defined contribution plan is a
pension plan under which the Group pays fixed contributions into a
separate entity. The Group has no legal or constructive obligations
to pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee
service in the current and prior periods.
9
DIRECTOR'S REMUNERATION
Further details on Directors'
remuneration are included within the Directors' Report in the
Annual Report and Accounts for 2023.
|
|
|
|
Company
|
|
2023
|
2022
|
|
|
£
|
£
|
Short-term employee
benefits
|
|
1,096,773
|
1,063,558
|
Additional salary in lieu of
pension contributions
|
|
26,465
|
23,631
|
|
|
|
|
Remuneration disclosed above
include the following amounts paid to the highest paid
director:
|
|
|
|
|
|
2023
|
2022
|
|
|
£
|
£
|
Short-term employee
benefits
|
|
419,001
|
420,501
|
Additional salary in lieu of
pension contributions
|
|
14,000
|
12,500
|
There are no directors to whom
retirement benefits are accruing in respect of qualifying services.
No directors exercised share options in the year (2022:
none).
10
REVENUE
An analysis of the Group's revenue
by product for each segment is as follows:
2023 Group
|
Aquis
Markets
|
Aquis
Technologies
|
Aquis Data
|
Aquis Stock
Exchange
|
Total
|
Exchange fees
|
|
10,919,263
|
-
|
-
|
663,068
|
11,582,331
|
Licence fees
|
|
-
|
7,298,157
|
-
|
-
|
7,298,157
|
Data vendor fees
|
|
-
|
-
|
3,722,237
|
-
|
3,722,237
|
Issuer fees
|
|
-
|
-
|
-
|
1,108,216
|
1,108,216
|
Total
|
|
10,919,263
|
7,298,157
|
3,722,237
|
1,771,284
|
23,710,941
|
|
|
|
|
|
|
|
2022 Group
|
Aquis
Markets
|
Aquis
Technologies
|
Aquis Data
|
Aquis Stock
Exchange
|
Total
|
Exchange fees
|
|
10,244,767
|
-
|
-
|
624,675
|
10,869,442
|
Licence fees
|
|
-
|
5,034,579
|
-
|
-
|
5,034,579
|
Data vendor fees
|
|
-
|
-
|
3,002,986
|
-
|
3,002,986
|
Issuer fees
|
|
-
|
-
|
-
|
1,022,520
|
1,022,520
|
Total
|
|
10,244,767
|
5,034,579
|
3,002,986
|
1,647,195
|
19,929,527
|
|
|
|
|
|
|
|
2023 Company
|
Aquis
Markets
|
Aquis
Technologies
|
Aquis Data
|
Aquis Stock
Exchange
|
Total
|
Exchange fees
|
|
3,994,208
|
-
|
-
|
-
|
3,994,208
|
Licence fees
|
|
-
|
7,298,157
|
-
|
-
|
7,298,157
|
Data vendor fees
|
|
-
|
-
|
1,854,974
|
-
|
1,854,974
|
Issuer fees
|
|
-
|
-
|
-
|
-
|
-
|
Total
|
|
3,994,208
|
7,298,157
|
1,854,974
|
-
|
13,147,339
|
|
|
|
|
|
|
|
2022 Company
|
Aquis
Markets
|
Aquis
Technologies
|
Aquis Data
|
Aquis Stock
Exchange
|
Total
|
Exchange fees
|
|
3,894,736
|
-
|
-
|
-
|
3,894,736
|
Licence fees
|
|
-
|
4,970,622
|
-
|
-
|
4,970,622
|
Data vendor fees
|
|
-
|
-
|
1,477,167
|
-
|
1,477,167
|
Issuer fees
|
|
-
|
-
|
-
|
-
|
-
|
Total
|
|
3,894,736
|
4,970,622
|
1,477,167
|
-
|
10,342,525
|
Revenues from customers attributable
to each of the following countries
|
|
Group
|
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
|
|
£
|
£
|
|
£
|
£
|
Australia
|
|
57,000
|
41,675
|
|
33,567
|
26,406
|
British Virgin Islands
|
|
3,625
|
14,467
|
|
-
|
-
|
Canada
|
|
4,150
|
11,853
|
|
-
|
-
|
Cayman Islands
|
|
-
|
1,160
|
|
1,422
|
1,119
|
China
|
|
142,000
|
-
|
|
-
|
-
|
Colombia
|
|
39,329
|
-
|
|
-
|
-
|
Cyprus
|
|
-
|
7,887
|
|
-
|
-
|
Denmark
|
|
32,238
|
-
|
|
-
|
-
|
Finland
|
|
24,000
|
-
|
|
-
|
-
|
France
|
|
1,215,591
|
1,128,945
|
|
179,094
|
140,887
|
Germany
|
|
425,349
|
319,888
|
|
106,432
|
83,726
|
Gibraltar
|
|
4,000
|
-
|
|
-
|
-
|
Guernsey
|
|
2,100
|
1,972
|
|
-
|
-
|
Hong Kong
|
|
24,000
|
107,525
|
|
105,681
|
83,135
|
Hungary
|
|
35,000
|
-
|
|
-
|
-
|
Ireland
|
|
1,517,301
|
91,177
|
|
103,278
|
81,245
|
Isle of Man
|
|
825
|
-
|
|
-
|
-
|
Italy
|
|
24,000
|
-
|
|
-
|
-
|
Jersey
|
|
1,300
|
10,207
|
|
-
|
-
|
Kenya
|
|
14,150
|
-
|
|
-
|
-
|
Luxembourg
|
|
2,177
|
17,398
|
|
21,336
|
16,784
|
Netherlands
|
|
158,239
|
43,147
|
|
54,841
|
43,141
|
Norway
|
|
38,025
|
39,784
|
|
-
|
-
|
Peru
|
|
-
|
1,972
|
|
-
|
-
|
Singapore
|
|
483,311
|
-
|
|
-
|
-
|
Slovenia
|
|
-
|
2,706
|
|
-
|
-
|
South Africa
|
|
109,245
|
2,514,905
|
|
3,074,384
|
2,418,504
|
Spain
|
|
79,872
|
-
|
|
-
|
-
|
Sweden
|
|
24,000
|
6,496
|
|
7,965
|
6,266
|
Switzerland
|
|
222,330
|
184,437
|
|
113,107
|
88,977
|
United Arab Emirates
|
|
-
|
17,746
|
|
-
|
-
|
United Kingdom
|
|
17,432,294
|
13,602,675
|
|
7,955,010
|
6,257,912
|
United States
|
|
1,595,490
|
1,761,505
|
|
1,391,222
|
1,094,423
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
23,710,941
|
19,929,527
|
|
13,147,339
|
10,342,525
|
Subscription fees and data
vendor fees:
Subscription fees and some data
vendor fees are accounted for under IFRS 15 and are all recognised
at point in time as they reflect variable revenue determined on a
monthly basis. In addition to the variable monthly fee some AQSE
data vendors pay an annual fee for access to real time and/or end
of day data, which is recognised over time as the performance
obligation of providing data is fulfilled.
The Group begins to recognise
monthly subscription fees, data vendor fees, and connectivity fees
when the customer conformance test is satisfactorily concluded, and
an acceptance certificate is issued. This is then verified by the
customer starting to utilise the platform, which is the point in
time that the Group determines that the customer has received the
benefit from the service.
In the case of subscription,
connectivity and data fees, invoices are raised monthly in arrears
and there is no obligation for a refund, return or any other
similar obligation. There is no constrained variable consideration
in any customer contracts, and the transaction price is allocated
in full at a single point in time when the customer receives the
benefit from the services.
Licence fees and contract
assets:
Aquis Exchange PLC provides
technology services under licence to clients. The services comprise
the provision of an exchange platform and / or a surveillance
system and may also include support services comprising basic
infrastructure support or additional services. The duration of the
licences varies between 1 and 7 years and will consist of an
implementation fee, and, post implementation, a monthly licence fee
for the duration of the contract. The monthly fees also cover
system maintenance and system upgrades that typically occur every
12 - 18 months. The licensing contracts are accounted for under
IFRS 15 and any corresponding contract assets are subject to IFRS 9
provisioning, as disclosed further in Note 11. Contract liabilities
arise when consideration has been provided to Aquis prior to
completion of relevant performance obligations as outlined below.
These balances typically arise when customers pay in advance of
implementation. As of the balance sheet date there are no contract
liabilities (2022: nil).
The revenue from licensing
contracts with customers has been categorised reflecting the
nature, amount, customer categorisation (see also Note 4), contract
duration and uncertainty of revenue and cash flows. Revenue from
licensing contracts is assessed for each contract and is recognised
as and when each performance obligation is satisfied. A transaction
price is determined by the contractual terms of an agreement.
Transaction prices are allocated to each performance obligation
based on the standalone price of the product or service offered by
the Group. The list of performance obligations included within
Aquis' Technology Licence agreements is outlined below.
For licensing contracts, the
Company has assessed the expected credit loss of each client
individually. The transaction price is allocated according to the
Group's obligations to the client over the course of licence
period. There is no constrained variable consideration in any
customer contracts.
The licensing fees line item also
includes connectivity fees for licensing contract customers that
are recognised at a point in time as they reflect variable revenue
determined on a monthly basis, and are underpinned by a separate
agreement.
Contract Assets (Group and Company)
|
£
|
£
|
As at 1 January
|
|
6,114,105
|
3,528,400
|
PO2: Licence fees
|
|
5,419,476
|
3,805,388
|
PO3: Maintenance fees
|
|
449,533
|
315,687
|
Net ECL (provision)/credit on
contract assets
|
|
(1,016,223)
|
133,484
|
Transfers to trade
receivables
|
|
(2,345,265)
|
(1,756,638)
|
Adjustments for foreign exchange
gains
|
|
(141,182)
|
87,784
|
As at 31 December
|
|
8,480,444
|
6,114,105
|
|
|
|
|
The scope of a Technology Licence
contract was amended during the year which resulted in cumulative
catch-up adjustments of £86,400 (2022: £191,000) being recognised
in the year despite satisfaction of their performance obligation in
prior periods.
Upon invoicing of revenues the
right to consideration becomes unconditional and thus contract
asset balances have been reduced for balances transferred to trade
receivables. The unrecovered amount included in receivables is
£626,607 (2022: £462,463).
Performance obligation (PO)
|
Recognition of revenue upon completion
|
PO1: Implementation
fees
|
Implementation/ project fees are
upfront, non-refundable fees that a customer pays in order to
obtain the user
agreement. Even if the user acceptance certificate is never issued,
the implementation fee cannot be reclaimed and so the revenue is
guaranteed and can be recognised at the time of invoice as Aquis
becomes unconditionally entitled to payment.
|
PO2: Licencing
fees
|
At a point in time upon signing
the user acceptance agreement, as the Company has fulfilled its
promise to
deliver the licence (i.e. the system has been deployed in the
client's production environment). A corresponding
contract asset (trade receivable) is recognised to reflect the
customer's obligation to pay the monthly licensing fee over the
remaining term of the contract.
|
PO3: Maintenance fees
|
Over the course of the licensing
contract, as the performance obligation to maintain the system is
settled and the customer benefits from using the system.
|
PO4: Live services
|
Over the course of the licensing
contract, as the performance obligation to provide surveillance and
similar core market operations tasks are settled and the customer
benefits over time.
|
PO5: Hosting
|
Over the course of the licensing
contract, as the performance obligation to use Aquis' hardware and
infrastructure is used over time by the customer.
|
The aggregate amount of the
transaction price per customer category that has been allocated to
the performance obligations for the year is as follows:
Group and Company
|
|
2023
|
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
Risk category1
|
|
1
|
2
|
3
|
4
|
5
|
Total
|
PO1
|
|
65,000
|
500,000
|
280,630
|
-
|
-
|
845,630
|
PO2
|
|
2,550,000
|
2,027,500
|
85,586
|
756,390
|
-
|
5,419,476
|
PO3
|
|
62,457
|
239,453
|
125,000
|
22,623
|
-
|
449,533
|
PO4
|
|
-
|
-
|
-
|
-
|
-
|
-
|
PO5
|
|
-
|
42,000
|
-
|
-
|
-
|
42,000
|
|
|
2,677,457
|
2,808,953
|
491,216
|
779,013
|
-
|
6,756,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group and Company
|
|
2022
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
Risk category1
|
|
1
|
2
|
3
|
4
|
5
|
Total
|
PO1
|
|
-
|
-
|
236,842
|
-
|
-
|
236,842
|
PO2
|
|
-
|
191,000
|
3,382,792
|
231,596
|
-
|
3,805,388
|
PO3
|
|
-
|
315,687
|
-
|
-
|
-
|
315,687
|
|
|
-
|
506,687
|
3,619,634
|
231,596
|
-
|
4,357,917
|
The amount of revenue to be
recognised from unsatisfied performance obligations with Technology
Licence customers is as follows:
Group and Company
|
|
2024
|
2025
|
2026
|
2027-2030
|
Total
|
As at 31 December 2023
|
|
£
|
£
|
£
|
£
|
£
|
PO3
|
|
671,465
|
437,931
|
437,931
|
823,254
|
2,370,581
|
PO4
|
|
70,000
|
120,000
|
120,000
|
230,000
|
540,000
|
PO5
|
|
231,000
|
-
|
-
|
-
|
231,000
|
|
|
972,465
|
557,931
|
557,931
|
1,053,254
|
3,141,581
|
|
|
|
|
|
|
|
Group and Company
|
|
2023
|
2024
|
2025
|
2026-2029
|
Total
|
As at 31 December 2022
|
|
£
|
£
|
£
|
£
|
£
|
PO3
|
|
429,384
|
353,197
|
234,245
|
691,179
|
1,708,005
|
PO4
|
|
-
|
-
|
-
|
-
|
-
|
PO5
|
|
-
|
-
|
-
|
-
|
-
|
|
|
429,384
|
353,197
|
234,245
|
691,179
|
1,708,005
|
1Customer risk category definitions: 1 - High, 2 - Moderately
High, 3 - Moderate, 4 - Moderately Low, and 5 - Low.
11
IMPAIRMENT
The Group has two types of
financial asset that are subject to potential impairment, these are
contract assets relating to technology licencing contracts within
the Company and also trade receivables arising on services provided
in the AQSE subsidiary. At a Company level intercompany balances
are assessed for any ECL on outstanding receivables arising during
the normal course of business between the Parent and its
subsidiaries.
The Group have concluded that
trade receivables and contract assets have different risk
characteristics and therefore the Expected Credit Loss (ECL) rates
for each type of asset are measured separately. Since they comprise
a portfolio of only a small number of clients, contract assets have
been assessed on a client-by-client basis, whilst trade receivables
have been grouped based on shared credit risk characteristics and
the days past due. Further details on both methodologies can be
found below.
IFRS 9 provisioning is applied to
technology licensing contract assets based on management estimates
of the collectability of contracts over their useful life, and
which are re-assessed at each renewal and also at each
year-end.
The Group applies the IFRS 9
simplified approach to measuring expected credit losses which uses
a lifetime expected loss allowance for trade receivables and
contract assets and therefore the ECL for each contract is assessed
on a lifetime basis rather than at each reporting date. As the
simplified approach is adopted it is not necessary to consider the
impact of a significant increase in credit risk.
|
|
Group
|
Company
|
|
|
Contract
Assets
|
Trade
Receivables
|
Contract
Assets
|
Trade
Receivables
|
Reconciliation of opening to closing loss allowances
2023
|
|
£
|
£
|
£
|
£
|
Opening Impairment Provision at 1
January
|
|
1,347,278
|
58,953
|
1,347,278
|
-
|
ECL increase during the
year
|
|
-
|
79,395
|
-
|
59,608
|
Written-off financial
assets
|
|
-
|
(34,845)
|
-
|
(1,500)
|
ECL on new contract
assets
|
|
1,729,154
|
-
|
1,729,154
|
-
|
ECL reversed over time
|
|
(712,931)
|
-
|
(712,931)
|
-
|
Closing Impairment Provision at 31
December
|
|
2,363,501
|
103,503
|
2,363,501
|
58,108
|
|
|
|
|
|
|
|
|
Group
|
Company
|
|
|
Contract
Assets
|
Trade
Receivables
|
Contract
Assets
|
Trade
Receivables
|
Reconciliation of opening to closing loss allowances
2022
|
|
£
|
£
|
£
|
£
|
Opening Impairment Provision at 1
January
|
|
1,480,762
|
46,169
|
1,480,762
|
-
|
ECL increase during the
year
|
|
-
|
12,784
|
-
|
-
|
ECL on new contract
assets
|
|
713,230
|
-
|
713,230
|
-
|
ECL reversed over time
|
|
(846,714)
|
-
|
(846,714)
|
-
|
Closing Impairment Provision at 31
December
|
|
1,347,278
|
58,953
|
1,347,278
|
-
|
Technology Licencing
Contracts
During contract negotiation Aquis
assesses the potential credit risk of a prospective client prior to
committing to the contract, and the Directors consider factors that
are specific to the customer, general economic conditions and an
assessment of both the current as well as the forecast direction of
these conditions. Based on this assessment, the prospective
customer is assigned to a customer category with an appropriate
risk rating.
A probability of default (PD)
occurring during the lifetime of the contract ranging from 0-50% is
applied to each client based on the assigned risk category. The
credit risk of Aquis' technology clients ranges from those that are
in infant start up stages (i.e. riskier) to those that are highly
liquid and solvent conglomerates (little to no risk). As such, the
Directors view the range of PD's for the portfolio to be between
50% for those with the highest level of risk to 0% for those that
are so near to a zero level of risk that the PD is zero in
substance. The Directors are comfortable that the assigned PD is
sufficiently accurate to reflect the elevated risk associated with
each start up when considering the idiosyncratic circumstances and
risk factors of each client. The Directors would not enter into any
contract where the PD is deemed to be any higher than 50%. The
portfolio of technology contracts held by Aquis have PDs that have
an observable relationship with time, i.e. the PD will decrease
each year as the contract progresses. The credit risk of the
contracts is directly linked to the success of the business and its
ability to raise capital, and each year as the business continues
in operation the credit risk decreases.
The Loss Given Default (LGD) is
also quantified on a customer-by-customer basis and is done through
an assessment of the recovery rate the Directors anticipate will be
applied to the customer in the event of liquidation. Currently the
low number of technology clients allows Aquis to assess each
contract individually on the appropriate credit risk category, and
this is determined based on several factors including company
specific factors and also any future macro-economic changes, the
sensitivity to these potential changes and the impact that these
may have on the recoverability of the outstanding debt.
Although the full risk assessment
is completed only at the start of the contract, the Directors
assess each contract at the balance sheet date to determine whether
the level of ECL provision, based on LGD and PD at contract
inception, remains appropriate. The Directors consider a variety of
factors specific to each customer, such as past payment history,
but also assess the intent and ability to settle contractual
commitments over the remaining contractual term, examples of which
include but are not limited to, availability and sources of
funding, revenue generating activities and profitability, and
ongoing communications with the customer. Further factors
considered by the Directors throughout the contract term are
included within Note 4 under critical accounting
estimates.
The Contract Asset Impairment
provision as at 31 December 2023 is £2,422k (2022: £1,348k) and has
been calculated with reference to estimations based on the PD and
LGD as described above for each individual contract taking into
account the nature, amount, customer categorisation, contract
duration and uncertainty of revenue and cash flows.
The contracts are short-to-medium
term in length and, as at 31 December 2023, the average contract
duration for the portfolio of technology contracts is 3.4 years.
(2022: 3.1 years).
Intercompany
receivables
In line with IFRS 9 the Company has
considered the qualitative and quantitative characteristics of the
risk of default by its subsidiaries on outstanding receivables.
These are considered non-material, both in quantum and in nature
given regular settlement of balances and sufficient liquidity in
both subsidiaries to cover amounts due to the Parent.
Trade
Receivables
In line with IFRS 9 guidance, the
Group has applied a simplified "Expected Credit Loss" (ECL) model
on trade receivables where a risk of potential non-payment may
arise. In doing so the Group has considered the probability of a
default occurring over the contractual life of the financial asset
on initial recognition of the asset. Such trade receivables largely
arise within the AQSE subsidiary, with those arising in Aquis
Exchange PLC predominantly with institutions where the resultant
credit risk is assessed as non‑material, with no historical
evidence of non-payment, hence no ECL provision is recognised on
trade receivables. The trade receivables are measured at amortised
cost and the calculated ECL provision is deducted from the gross
carrying amount of the assets. When a trade receivable is
determined to be uncollectible, it is written off against the
provision account for trade receivables.
The simplified provision matrix
presented below is based on historic default rates over the
expected life of the trade receivables and is adjusted where
appropriate for forward-looking estimates. The trade receivables
balance is split into 8 separate categories depending on the age of
each debt, ranging from 0 days past due to over 180 days past due.
An appropriate estimation of the probability of default is applied
to each category of debt, based on both historical default rates
and expectations for the future. All AQSE customers are assessed
within a single credit risk category. In determining that the value
of any potential AQXE provision is immaterial the Directors have
separated AQXE customers into three distinct risk categories based
on homogenous characteristics for each customer class. The factors
used to differentiate each credit risk category in AQXE are
primarily based on the liquidity pools of each customer class,
payment history and profiles, in addition to regulated status. The
assessment of AQXE provisions as immaterial excludes a specific
provision against a specific debtor against which a provision of
£58,108 was recognised in the year. Alongside AQSE provisions the
total Group Provision at the year end was £103,503 (2022:
£45,395).
The key assumptions in calculating
the ECL for trade receivables are that the probability of default
increases with the age of the debt and that the debts are
homogenous, i.e. the credit risk assessment is based on age rather
than by individual client. The expected loss rates are based on
historical credit losses experienced and adjusted to reflect
current and forward-looking information. AQSE trade receivables
have been assessed to have a higher risk of impairment than the
rest of the Group's trade receivables.
Trade receivables have payment
terms of 30 days from the date of billing. For debts older than 180
days, debts are assessed on a case-by-case basis and are written
off if there is no reasonable expectation of recovery. During the
year a total of £33,345 (2022: £12,784) of trade receivables were
written off relating to debts from companies that had ceased
membership with AQSE and the contractual rights to cash flows from
the financial assets were deemed to have expired.
The total loss allowance is
calculated by applying the expected loss rate to the trade
receivables balance in each age bucket. The total portion of the
ECL balance relating to trade receivables as at 31 December 2023
was £103,503, of which £45,395 related to AQSE balances (31
December 2022: £58,953). The table below shows the allocation of
provisions against AQSE Trade Receivables:
Group - 2023
|
|
|
|
|
|
|
|
|
|
Days past Due
|
0 days
|
1-29 days
|
30-59 days
|
60-89 days
|
90-124
days
|
125 - 149
days
|
150-179
days
|
Over 180
days
|
Total
|
Expected loss rate
|
0.5%
|
1%
|
3%
|
5%
|
10%
|
25%
|
50%
|
100%
|
|
Trade receivables
|
112,837
|
59,774
|
232,940
|
28,224
|
66,830
|
4,500
|
6,600
|
21,503
|
533,208
|
Expected loss
|
564
|
598
|
6,891
|
1,411
|
6,683
|
1,125
|
3,300
|
6,585
|
27,157
|
Specific provisions charged /
(released)
|
-
|
-
|
3,320
|
-
|
-
|
-
|
-
|
14,918
|
18,238
|
Total Expected Credit Losses
|
564
|
598
|
10,211
|
1,411
|
6,683
|
1,125
|
3,300
|
21,503
|
45,395
|
|
|
|
|
|
|
|
|
|
|
Group - 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days past Due
|
0 days
|
1-29 days
|
30-59 days
|
60-89 days
|
90-124
days
|
125 - 149
days
|
150-179
days
|
Over 180
days
|
Total
|
Expected loss rate
|
0.5%
|
1%
|
3%
|
5%
|
10%
|
25%
|
50%
|
100%
|
|
Trade receivables
|
106,305
|
33,200
|
6,800
|
2,200
|
4,500
|
-
|
15,780
|
78,845
|
247,630
|
Expected loss
|
532
|
332
|
204
|
110
|
450
|
-
|
7,890
|
78,845
|
88,363
|
Specific provisions charged /
(released)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(29,410)
|
(29,410)
|
Total Expected Credit Losses
|
532
|
332
|
204
|
110
|
450
|
-
|
7,890
|
49,435
|
58,953
|
12
OPERATING EXPENSES AND OTHER GAINS AND LOSSES
Earnings before interest, taxation,
depreciation and amortisation is stated after charging:
|
|
|
|
|
|
|
|
|
|
Group
|
|
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
Other gains
|
|
£
|
£
|
|
£
|
£
|
Fair value movements in Derivative
Instruments
|
|
51,407
|
-
|
|
51,407
|
-
|
Other gains relate to fair value
movements on derivative financial assets used to mitigate foreign
currency risk. Please see Note 5, Financial Risk Management, for
further details.
|
|
|
|
|
|
|
Group
|
|
Company
|
|
2023
|
2022
|
|
2023
|
2022
|
Administrative Expenses
|
£
|
£
|
|
£
|
£
|
Fees payable to the company's
auditor for the audit of the company's financial
statements
|
270,000
|
241,250
|
|
205,000
|
190,000
|
Fees payable to the company's
auditor for the Client Asset audit
|
10,700
|
10,000
|
|
10,700
|
10,000
|
Share-based payments
|
1,085,658
|
819,872
|
|
1,085,658
|
819,872
|
Exchange loss/(gains)
|
104,162
|
116,415
|
|
146,103
|
(50,269)
|
Employee costs
|
9,132,899
|
7,894,927
|
|
6,476,801
|
5,665,400
|
Operating costs
|
5,793,059
|
5,157,454
|
|
5,317,912
|
4,675,889
|
Intercompany recharge
|
-
|
-
|
|
(6,368,051)
|
(5,694,803)
|
|
16,396,478
|
14,239,918
|
|
6,874,123
|
5,616,089
|
Other administrative expenses
comprise marketing fees, data centre and other service fees
incurred in the ordinary course of business.
The Group expends resources to
build trading platforms for its own use and for licencing to
customers. Research and development costs that are not eligible for
capitalisation have been expensed in the period incurred and are
recognised in administrative expenses. In 2023 the amount
recognised in the income statement was £512,543 (2022:
£536,687).
Profit before taxation is stated
after charging:
|
|
|
|
|
|
|
|
|
Group
|
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
Depreciation, amortisation and finance
costs
|
|
£
|
£
|
|
£
|
£
|
Depreciation of property, plant
and equipment
|
|
760,308
|
760,537
|
|
687,019
|
688,615
|
Amortisation of intangible
assets
|
|
612,257
|
498,955
|
|
612,257
|
498,954
|
|
|
1,372,565
|
1,259,492
|
|
1,299,276
|
1,187,569
|
|
|
|
|
|
|
|
|
|
Group
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
£
|
£
|
|
£
|
£
|
Finance expense on lease
liabilities (Note 25)
|
|
103,249
|
67,691
|
|
88,571
|
51,069
|
Finance income on lease assets
(Note 25)
|
|
(15,737)
|
(14,561)
|
|
(15,293)
|
(14,121)
|
Interest on deposited
funds
|
|
(384,712)
|
(28,722)
|
|
(112,154)
|
(2,416)
|
|
|
(297,200)
|
24,408
|
|
(38,876)
|
34,532
|
Total company expenses were as
follows:
|
|
|
|
|
|
|
|
|
Group
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
Total expenses
|
|
£
|
£
|
|
£
|
£
|
Expenses
|
|
17,471,843
|
15,523,818
|
|
8,134,523
|
6,838,190
|
13
SHARE-BASED PAYMENTS
Aquis Exchange PLC has five
different share schemes which have been set up since incorporation
of which one, being the EMI scheme, is now closed to new
entrants. A new scheme, being the Premium Priced Option
scheme was introduced in
2022.
Aquis Exchange PLC has established
two Trusts (see Note 21) to which it has provided funding to allow
the purchase of shares for future settlement of the liability
arising from the share awards noted
below.
The Fair Value of any awards made in
the year is calculated and recognised through the P&L over the
appropriate period as set out in the detail on each scheme below.
The total costs recognised through the P&L in the Group in 2023
was £1,086k (2022 : £820k).
|
|
|
|
|
|
Group and
Company
|
|
|
2023
|
2022
|
|
|
£
|
£
|
Enterprise Management Incentives (EMI)
scheme
|
|
11,479
|
58,430
|
Restricted Share Plan (RSP) scheme
|
|
540,304
|
485,860
|
Company Share Ownership Plan (CSOP) scheme
|
|
57,963
|
43,039
|
Premium Priced Option (PPO) scheme
|
|
299,643
|
69,000
|
Share Incentive Plan (SIP) scheme
|
|
176,269
|
163,543
|
|
|
1,085,658
|
819,872
|
The aggregate level of share options
and shares awarded which existed at the year end is 3,526,785
shares (2022: 2,209,612 shares).
|
|
|
|
|
|
Group and
Company
|
|
|
2023
|
2022
|
|
|
£
|
£
|
Enterprise Management Incentives (EMI)
scheme
|
|
899,378
|
906,711
|
Restricted Share Plan (RSP) scheme
|
|
416,572
|
346,742
|
Company Share Ownership Plan (CSOP) scheme
|
|
203,530
|
163,073
|
Premium Priced Option (PPO) scheme
|
|
1,745,443
|
606,931
|
Share Incentive Plan (SIP) scheme
|
|
261,862
|
186,155
|
|
|
3,526,785
|
2,209,612
|
|
|
|
|
Enterprise Management
Incentive Plan
There is one approved EMI scheme,
which was initiated in June 2018 when the first 564,124 options
were granted. In April 2020 the second allotment (approved in and
deferred from November 2019 because Aquis was in a close period)
was made with a total of 740,250 options being granted. Options
vest in 3 equal tranches, one, two and three years after grant. The
options expire after 10 years.
In accordance with IFRS 2, the Group
has estimated the fair value of options using a US binomial option
valuation model and spread the estimated value against the profit
and loss account over the life of the vesting period.
Of the total number of options
granted, 7,333 (2022: 3,999) were exercised, none (2022 : Nil)
expired and none (2022 : 28,295) were forfeited during
2023.
The exercise price for the options
granted on 14 June 2018 is £2.69 per share to be settled in cash at
the date of exercise.
The weighted average remaining
contractual life of options outstanding at the end of the reporting
period amounted to nil months (2022: nil).
The US binomial model with an
average expiry duration of 5 years, volatility of 24% and risk-free
interest rate of 1.1067% was used to calculate the fair value of
the options granted on 14 June 2018. All options are exercisable at
a price of £2.69 and the weighted average expected life of the
options was estimated to be 5 years.
The exercise price for the options
granted on 16 April 2020 is £3.47 per share to be settled in cash
at the date of exercise.
The weighted average remaining
contractual life of options outstanding at the end of the reporting
period amounted to nil (2022: 3.5 months).
The US binomial model using an
average expiry duration of 5 years, volatility of 20% and risk-free
interest rate of 0.16% was used to calculate the fair value of the
options granted on 16 April 2020. All options are exercisable at a
price of £3.47 and the weighted average remaining expected life of
the options was estimated to be 5 years.
Details of the EMI scheme are as
follows:
|
2023
|
2022
|
|
Number of
Shares
|
Average Exercise Price
(£)
|
Number of
Shares
|
Average Exercise Price
(£)
|
• Outstanding at the beginning of
the period
|
906,711
|
3.30
|
939,005
|
3.29
|
• Granted during the
period
|
-
|
-
|
-
|
-
|
• Forfeited during the
period
|
-
|
-
|
(28,295)
|
3.22
|
• Exercised during the
period
|
(7,333)
|
3.47
|
(3,999)
|
3.50
|
• Expired during the
period
|
-
|
-
|
-
|
-
|
• Outstanding at the end of the
period
|
899,378
|
3.29
|
906,711
|
3.30
|
• Exercisable at the end of the
period
|
899,378
|
3.29
|
672,628
|
3.23
|
Restricted Share
Plan
The Group implemented a Restricted
Share Plan (RSP) senior executive option scheme in 2020. Total
grants were made in April 2023 of 72,622 at a grant price of £4.01
(April and September 2022: 117,975 options at a grant price of
£4.81).
Options vest three years after
grant, with an additional hold period of a further 2 years for
executive directors and expire after 10 years.
The Black-Scholes model with an
average expiry duration of 3 years, volatility of 21% and risk-free
interest rate of 1.669% was used to calculate the fair value of the
options granted in April 2022.
The Black-Scholes model with an
average expiry duration of 3 years, volatility of 21% and risk-free
interest rate of 1.891% was used to calculate the fair value of the
options granted in September 2022. The weighted average remaining
contractual life of options outstanding at the end of the reporting
period amounted to 7 years and 7 months (2022: 7 years and 0
months).
The issue price for the options
granted on 26 April 2023 is £4.03 per share to be settled in cash
at the date of exercise at £0.10. The following inputs were used in
the Black Scholes model: average maturity of 3 years, volatility of
23% and risk-free interest rate of 3.585%.
Details of the RSP scheme are as
follows:
|
2023
|
2022
|
|
Number of
Shares
|
Average Exercise Price
(£)
|
Number of
Shares
|
Average Exercise Price
(£)
|
• Outstanding at the beginning of
the period
|
346,742
|
4.85
|
228,767
|
4.88
|
• Granted during the
period
|
72,622
|
4.01
|
117,975
|
4.81
|
• Forfeited during the
period
|
(2,792)
|
4.03
|
-
|
-
|
• Exercised during the
period
|
-
|
-
|
-
|
-
|
• Expired during the
period
|
-
|
-
|
-
|
-
|
• Outstanding at the end of the
period
|
416,572
|
4.71
|
346,742
|
4.85
|
• Exercisable at the end of the
period
|
140,447
|
3.64
|
-
|
-
|
Company Share Ownership
Plan
The Group implemented a Company
Share Ownership Plan (CSOP) employee option scheme in 2021. Grants
in April 2023 were made amounting to 58,225 options at a grant
price of £4.10 (April 2022: 78,053 options at a grant price of
£4.90).
Options vest three years after grant
and expire after 10 years.
The Black-Scholes model with an
average expiry duration of 5 years, volatility of 21% and risk-free
interest rate of 1.669% was used to calculate the fair value of the
options granted in April 2022. The weighted average remaining
contractual life of options outstanding at the end of the reporting
period amounted to 8 years and 1 months (2021: 7 years and 8
months).
The issue price for the options
granted on 26 April 2023 is £4.10 per share to be settled in cash
at the date of exercise at £4.10. The following inputs were used in
the Black Scholes model: average maturity of 3 years, volatility of
23% and risk-free interest rate of 3.585%.
Details of the CSOP scheme are as
follows:
|
|
|
|
|
|
2023
|
2022
|
|
Number of
Shares
|
Average Exercise Price
(£)
|
Number of
Shares
|
Average Exercise Price
(£)
|
• Outstanding at the beginning of
the period
|
163,073
|
5.95
|
95,780
|
6.85
|
• Granted during the
period
|
58,225
|
4.10
|
78,053
|
4.90
|
• Forfeited during the
period
|
(17,768)
|
5.19
|
(10,760)
|
6.39
|
• Exercised during the
period
|
-
|
-
|
-
|
-
|
• Expired during the
period
|
-
|
-
|
-
|
-
|
• Outstanding at the end of the
period
|
203,530
|
5.48
|
163,073
|
5.95
|
• Exercisable at the end of the
period
|
203,530
|
5.48
|
-
|
-
|
Premium Priced Option
Plan
The Group implemented a Premium
Priced Option (PPO) option scheme in 2022 primarily focussed on
Senior Executives.
Grants in April 2023 were made
amounting to 1,138,512 options at a grant price of £5.04 (June
2022: 648,811 at a grant price of £4.79).
Options vest 3 years after grant and
expire after 7 years.
The Black-Scholes model with an
average expiry duration of 5 years, volatility of 22.5% and
risk-free interest rate of 1.5% was used to calculate the fair
value of the options granted in June 2022. The weighted average
remaining contractual life of options outstanding at the end of the
reporting period amounted to 5 years and 6 months (2022: 6 years
and 6 months).
The issue price for the options
granted on June 2022 is £3.828 per share to be settled in cash at
the date of exercise at £4.785. The following inputs were used in
the Black Scholes model: average maturity of 5 years, volatility of
22.5% and risk-free interest rate of 1.79%.
The issue price for the options
granted on 26 April 2023 is £4.03 per share to be settled in cash
at the date of exercise at £5.0375. The following inputs were used
in the Black Scholes model: average maturity of 5 years, volatility
of 22.5% and risk-free interest rate of 3.723%.
Details of the PPO scheme are as
follows:
|
|
|
|
|
|
2023
|
2022
|
|
Number of
Shares
|
Average Exercise Price
(£)
|
Number of
Shares
|
Average Exercise Price
(£)
|
• Outstanding at the beginning of
the period
|
570,931
|
4.79
|
-
|
-
|
• Granted during the
period
|
1,138,512
|
5.04
|
648,811
|
4.79
|
• Forfeited during the
period
|
-
|
-
|
(77,880)
|
4.79
|
• Exercised during the
period
|
-
|
-
|
-
|
-
|
• Expired during the
period
|
-
|
-
|
-
|
-
|
• Outstanding at the end of the
period
|
1,709,443
|
4.95
|
570,931
|
4.79
|
• Exercisable at the end of the
period
|
-
|
-
|
-
|
-
|
Share Incentive
Plan
The employee Share Incentive Plan
(SIP) is administered by Equiniti ("the Trust"). The Trust
purchases shares in Aquis on the open market on behalf of employees
that have elected to take part. Employees are limited to a maximum
annual contribution of £1,800. The scheme allows employees to
become shareholders in the Company in a tax efficient manner, with
the Company purchasing two matching shares for every partnership
purchased by the employee. The terms of the matching shares include
that they must be held by the Trust for three years before they can
be transferred or sold, and the employee must remain employed with
the Company throughout this period. Free shares are also awarded to
staff on an annual basis where performance criteria are met, with
the Company purchasing up to a further 2 shares for each
partnership share purchased.
The fair value of the matching and
free shares purchased by the company are expensed over the three
year vesting period. Management assumes that the cost of the shares
is a close approximation of the fair value of the shares as the
market price tends to be reflective of the discounted value of
research analysts' medium-term projections.
|
|
|
|
Details of the SIP scheme are as
follows:
|
|
|
|
|
2023
|
|
2022
|
|
Number of
Shares
|
|
Number of
Shares
|
• Shares held at the beginning of
the period
|
186,155
|
|
139,543
|
• Partnership shares purchased in
the period
|
16,863
|
|
12,478
|
• Matching shares purchased during
the period
|
33,726
|
|
24,956
|
• Free shares purchased during the
period
|
35,673
|
|
22,465
|
• Exercised during the
period
|
(2,607)
|
|
(9,241)
|
• Forfeited during the
period
|
(7,948)
|
|
(4,046)
|
• Shares held at the end of the
period
|
261,862
|
|
186,155
|
• Exercisable at the end of the
period
|
-
|
|
-
|
14
DEFERRED TAX ASSET
A net deferred tax asset of
£1,785,331 (2022: £1,593,931) at the Group and £1,506,022 (2022:
£1,456,184) at the Company relating to unused tax losses is
recognised at 31 December 2023. The losses are considered allowable
to offset against the Company's taxable profits expected to arise
in the next three accounting periods. This comprises a gross
Deferred Tax Asset of £1,884,349 (2022: £1,716,748) at the Group
and £1,605,040 (2022: £1,578,001) at the Company offset by a
Deferred Tax Liability of £99,018 (2022: £122,817) at the Group and
Company arising on the timing difference between accounting
depreciation and tax written down value charge.
The assessment of future taxable
profits involves a significant degree of estimation, which
management have based on the latest budget for the Company approved
by the Board. The latest budget reflects a projected improvement in
trading performance which is largely due to the continued expansion
of the business as discussed in the Strategic Report. The
preparation of the budget involves a rigorous review process by the
Board, whereby each revenue stream and cost is scrutinised and
challenged in detail so that the final version is considered to be
an accurate and plausible representation of what is likely to be
achieved in the period.
In calculating the deferred tax
asset, management have applied a conservative approach by using
probability adjusted revenues, applying lower probabilities to
budgeted revenue from more uncertain sources such as large
technology licencing contracts, with the effect of reducing
estimated profits over the 3-year period from the original
forecasts. The analysis predicts profitability is still achievable
even when revenues are reduced to reflect this
adjustment.
The net deferred tax balance
comprises temporary differences attributable to:
|
|
|
Group
|
2023
|
2022
|
|
£
|
£
|
Tax losses
|
1,884,349
|
1,716,748
|
Fixed asset timing
differences
|
(99,018)
|
(122,817)
|
Total deferred tax
asset
|
1,785,331
|
1,593,931
|
|
|
|
|
|
|
Company
|
2023
|
2022
|
|
£
|
£
|
Tax losses
|
1,605,040
|
1,579,001
|
Fixed asset timing
differences
|
(99,018)
|
(122,817)
|
Total deferred tax
asset
|
1,506,022
|
1,456,184
|
Movement in deferred tax
balance:
|
|
|
Group
|
2023
|
2022
|
|
£
|
£
|
At 1 January
|
1,593,931
|
1,292,260
|
Origination and reversal of timing
differences
|
191,400
|
229,267
|
Effect of changes in tax
rates
|
-
|
72,404
|
At 31 December
|
1,785,331
|
1,593,931
|
|
|
|
|
|
|
Company
|
2023
|
2022
|
|
£
|
£
|
At 1 January
|
1,456,184
|
1,292,260
|
Origination and reversal of timing
differences
|
49,838
|
124,581
|
Effect of changes in tax
rates
|
-
|
39,343
|
At 31 December
|
1,506,022
|
1,456,184
|
The Group has combined losses of
£40,374,451 (2022: £46,116,352) available for carry forward and to
be used against future trading profits of the same trade in which
they were generated. This is comprised of trading generated in the
UK by Aquis Exchange PLC and Aquis Stock Exchange Limited. There
are no losses carried forward within Aquis Exchange Europe
SAS.
The Company has estimated losses
of £9,448,113 (2022: £11,747,647) available for carry forward
against future trading profits.
15
INCOME TAX
|
Group
|
|
Company
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
£
|
|
£
|
|
£
|
|
£
|
Current Tax
|
|
|
|
|
|
|
|
UK Corporation tax
charge
|
-
|
|
-
|
|
-
|
|
-
|
Overseas tax charges on foreign
operations
|
183,611
|
|
144,469
|
|
-
|
|
-
|
Total Tax Charge
|
183,611
|
|
144,469
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Deferred Tax
|
£
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
Origination and reversal of timing
differences
|
(191,400)
|
|
(229,267)
|
|
(49,838)
|
|
(124,581)
|
Effect of changes in tax
rates
|
-
|
|
(72,405)
|
|
-
|
|
(39,344)
|
Total deferred tax credit
|
(191,400)
|
|
(301,672)
|
|
(49,838)
|
|
(163,925)
|
|
|
|
|
|
|
|
|
|
Group
|
|
Company
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
£
|
|
£
|
|
£
|
|
£
|
Profit for the year before taxation
|
5,194,887
|
|
4,526,409
|
|
3,988,392
|
|
3,637,819
|
Expected tax charge based on a
corporation tax rate of 23.5% (19%)
|
1,039,094
|
|
860,018
|
|
938,092
|
|
691,186
|
Expected tax charge based at
effective overseas rates of 25%
|
182,100
|
|
177,647
|
|
-
|
|
-
|
Fixed asset differences
|
(57)
|
|
(40,330)
|
|
(57)
|
|
(40,330)
|
Expenses not deductible for tax
purposes
|
218,923
|
|
109,502
|
|
218,705
|
|
109,104
|
Other differences
|
857
|
|
(89,428)
|
|
(655)
|
|
16
|
Remeasurement of deferred tax for
changes in tax rates
|
79,085
|
|
(72,405)
|
|
72,718
|
|
(39,344)
|
Movement in deferred tax not
recognised
|
(1,527,791)
|
|
(1,069,029)
|
|
(1,278,641)
|
|
(884,557)
|
Movement in deferred tax not
recognised at overseas rates
|
‑
|
|
(33,178)
|
|
-
|
|
-
|
Tax Credit for the period
|
(7,789)
|
|
(157,203)
|
|
(49,838)
|
|
(163,925)
|
16
EARNINGS PER SHARE
|
|
|
|
|
|
|
Group
|
|
Company
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
Weighted average number of
ordinary shares for basic earnings per share
|
26,814,102
|
27,210,231
|
|
27,516,188
|
27,508,166
|
Weighted average number of
ordinary shares for diluted earnings per share
|
27,714,143
|
28,127,484
|
|
28,416,159
|
28,425,419
|
Earnings
|
|
|
|
|
|
Profit for the year from continued
operations
|
5,202,676
|
4,683,612
|
|
4,038,229
|
3,801,744
|
Basic and diluted earnings per share
(pence)
|
|
|
|
|
|
Basic earnings per ordinary
share
|
19
|
17
|
|
15
|
14
|
Diluted earnings per ordinary
share
|
19
|
17
|
|
14
|
13
|
Basic earnings per share is in
respect of all activities of the Group and diluted earnings per
share takes into account the dilution effects which would arise on
conversion or vesting of all outstanding share options and share
awards under the Enterprise Management Incentive (EMI)
scheme.
The basic EPS when adjusted for
outstanding EMI options of 906,711 (2022: 937,143) and adjusted for
forfeited options in the year of nil (2022: 28,295) gives a
weighted average of 28,409,489 (2022: 28,425,419).
17
INTAGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
Group and Company
|
Developed
trading platforms
|
Other
Intangibles
|
Total
Intangible Assets
|
Group
Goodwill
|
|
|
|
|
|
Cost
|
|
|
|
|
As at 1 January 2022
|
3,011,484
|
37,430
|
3,048,914
|
83,481
|
Additions
|
605,599
|
171,866
|
777,465
|
-
|
As at 31 December 2022
|
3,617,083
|
209,296
|
3,826,379
|
83,481
|
Additions
|
1,034,168
|
47,750
|
1,081,918
|
-
|
As at 31 December 2023
|
4,651,251
|
257,046
|
4,908,297
|
83,481
|
|
|
|
|
|
Accumulated amortisation and impairment
|
|
|
|
|
As at 1 January 2022
|
2,287,280
|
7,920
|
2,295,200
|
-
|
Charge for the year
|
484,915
|
14,040
|
498,955
|
-
|
As at 31 December 2022
|
2,772,195
|
21,960
|
2,794,155
|
-
|
Charge for the year
|
559,741
|
52,516
|
612,257
|
-
|
As at 31 December 2023
|
3,331,936
|
74,476
|
3,406,412
|
-
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
As at 31 December 2023
|
1,319,315
|
182,570
|
1,501,885
|
83,481
|
As at 31 December 2022
|
844,888
|
187,336
|
1,032,224
|
83,481
|
All intangible assets within the
Group are held by Company.
Other intangible assets include
assets valued at £68,835 with indefinite useful economic lives.
Further information on these assets can be found in Note 2 under
the heading "Intangible assets other than Goodwill."
Goodwill
On 11 March 2020 the Group
acquired Aquis Stock Exchange Limited (formerly NEX Exchange
Limited) which resulted in recognition of goodwill of £83,481. The
cash generating unit associated with the goodwill is determined to
be the assets associated with the investment in AQSE.
The goodwill arising on
consolidation represents the growth potential of the primary
listings exchange and the synergies with the rest of the business.
AQSE has no intangible assets.
Impairment tests for
goodwill
Goodwill has been allocated for
impairment testing purposes to a cash generating unit, being the
net assets related to Aquis Stock Exchange.
The recoverable amounts of the
cash generating unit has been determined based on a value-in-use
calculation using discounted cash flow forecasts based on business
plans prepared by management for a three-year period ending 31
December 2026. The two key estimates used in this model were an
estimated terminal growth rate of 2%, and a pre-tax discount factor
of 12%.
The results of the testing
indicated the projected value of Aquis Stock Exchange to exceed its
carrying value. As a result no impairment loss has been recognised
in the current year.
18
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
Fixtures, fittings and
equipment
|
Computer
Equipment
|
Right of Use
Assets
|
Total
|
Cost
|
|
|
|
|
As at 1 January 2022
|
324,461
|
2,389,254
|
4,250,452
|
6,964,167
|
Additions
|
167,440
|
601,979
|
-
|
769,419
|
Disposals
|
-
|
-
|
-
|
-
|
Foreign Currency Translation
Differences
|
-
|
-
|
(11,693)
|
(11,693)
|
As at 31 December 2022
|
491,901
|
2,991,233
|
4,238,759
|
7,721,893
|
Additions (and lease
adjustments)
|
9,379
|
401,937
|
12,618
|
423,934
|
Disposals
|
-
|
-
|
-
|
-
|
As at 31 December 2023
|
501,280
|
3,393,170
|
4,251,377
|
8,145,827
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
As at 1 January 2022
|
230,003
|
2,075,058
|
502,487
|
2,807,548
|
Charge for the year
|
65,263
|
298,052
|
397,222
|
760,537
|
Disposals
|
-
|
-
|
|
-
|
Foreign Currency Translation
Differences
|
-
|
-
|
(1,407)
|
(1,407)
|
As at 31 December 2022
|
295,266
|
2,373,110
|
898,302
|
3,566,678
|
Charge for the year
|
50,731
|
325,755
|
383,822
|
760,308
|
Disposals
|
-
|
|
-
|
-
|
As at 31 December 2023
|
345,997
|
2,698,865
|
1,282,124
|
4,326,986
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
As at 31 December 2023
|
155,283
|
694,305
|
2,969,253
|
3,818,841
|
As at 31 December 2022
|
196,635
|
618,123
|
3,340,457
|
4,155,215
|
|
|
|
|
|
Company
|
Fixtures, fittings and
equipment
|
Computer
Equipment
|
Right of Use
Assets
|
Total
|
Cost
|
|
|
|
|
As at 1 January 2022
|
319,325
|
2,389,253
|
3,656,087
|
6,364,665
|
Additions
|
157,805
|
595,133
|
-
|
752,938
|
Disposal
|
-
|
-
|
-
|
-
|
As at 31 December 2022
|
477,130
|
2,984,386
|
3,656,087
|
7,117,603
|
Additions
|
9,379
|
400,352
|
-
|
409,731
|
Disposal
|
-
|
-
|
-
|
-
|
As at 31 December 2023
|
486,509
|
3,384,738
|
3,656,087
|
7,527,334
|
|
|
|
|
|
Accumulated depreciation and impairment
|
|
|
|
|
As at 1 January 2022
|
230,029
|
2,075,058
|
495,820
|
2,800,907
|
Charge for the year
|
62,746
|
296,005
|
329,864
|
688,615
|
Disposal
|
-
|
-
|
-
|
-
|
As at 31 December 2022
|
292,775
|
2,371,063
|
825,684
|
3,489,522
|
Charge for the year
|
47,782
|
323,341
|
315,896
|
687,019
|
Disposal
|
-
|
-
|
-
|
-
|
As at 31 December 2023
|
340,557
|
2,694,404
|
1,141,580
|
4,176,541
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
As at 31 December 2023
|
145,952
|
690,334
|
2,514,507
|
3,350,793
|
As at 31 December 2022
|
184,355
|
613,323
|
2,830,403
|
3,628,081
|
19
INVESTMENT IN SUBSIDIARIES
|
|
|
|
|
|
2023
|
2022
|
Company
|
|
£
|
£
|
Investment in
subsidiaries
|
|
6,884,202
|
6,884,202
|
|
|
|
|
Details of the Company's
subsidiaries at 31 December 2023 are set out in the following
table. The investments are measured using the equity method in
Aquis Exchange PLC's standalone accounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of undertaking
|
Country
of incorporation
|
Ownership interest (%)
|
Voting
power held (%)
|
Name of
business
|
Carrying
amount
|
Carrying
amount
|
|
|
|
|
|
|
|
31-Dec-23
|
31-Dec-22
|
|
|
Aquis Stock Exchange
|
UK
|
100
|
100
|
Recognised Investment Exchange
|
3,677,118
|
3,677,118
|
|
|
|
|
Aquis Exchange Europe
SAS
|
France
|
100
|
100
|
European
Equities Exchange
|
3,207,084
|
3,207,084
|
|
|
|
|
|
|
|
6,884,202
|
6,884,202
|
|
|
The registered office of Aquis
Exchange Europe SAS is 231 rue Saint Honoré, 75001 Paris, France.
The registered office of Aquis Stock Exchange Limited is 63 Queen
Victoria Street, EC4N 4UA,UK.
Both investments were assessed for
impairment at year end and no indicators of impairment were noted,
with both Aquis Stock Exchange and Aquis Exchange Europe SAS
profitable in both 2023 and 2022. Therefore, in line with IAS 36
guidance, no impairment provision has been recognised in Aquis
Exchange PLC's financial statements.
There has been no change in the
year of the carrying value of any subsidiary (2022: no
change).
20
INVESTMENT IN FINANCIAL ASSETS
|
|
|
|
|
|
2023
|
2022
|
Group and Company
|
|
£
|
£
|
Financial assets measured at fair
value through OCI
|
591,945
|
-
|
In August 2023 Aquis Exchange PLC
acquired a 5.2% stake in OptimX LLC for consideration of USD 750k.
The entity is currently in the development stage of creating
blotter scraping technologies. The shares of OptimX LLC are not
listed on any public market.
The fair value of OptimX, an
unlisted-equity investment falls within Level 3 of the IFRS 13 Fair
Value hierarchy.
In the year of acquisition, the
fair value of the Investment in OptimX as at 31 December is
considered materially consistent with its acquisition price.
Therefore, no fair value movements have been recognised in other
comprehensive income.
21 INVESTMENT IN TRUSTS
The table below shows the total
amount the Company has invested in the two Trusts in respect of the
share based payments arising under (i) the Employee Share Incentive
Plan and (ii) the Restricted Share Plan, Company Share Ownership
Plan and Premium Price Options plan as at the reporting date.
Investments into the Trusts are mostly comprised of cash
contributions made to acquire Company shares. Deductions from the
Trusts represent vested shares withdrawn.
|
|
|
|
|
|
|
|
|
2023
|
2022
|
Company
|
|
|
|
|
|
|
|
|
£
|
£
|
Investment in
Trusts
|
|
|
|
|
|
|
4,389,445
|
3,350,325
|
22
TRADE AND OTHER RECEIVABLES
|
|
|
|
|
|
|
|
|
|
Current
|
|
Non-current
|
|
Total
|
Group
|
2023
|
2022
|
|
2023
|
2022
|
|
2023
|
2022
|
|
£
|
£
|
|
£
|
£
|
|
£
|
£
|
Trade receivables
|
3,033,440
|
2,317,384
|
|
-
|
-
|
|
3,033,440
|
2,317,384
|
Technology licence contract
assets
|
3,029,766
|
1,104,221
|
|
5,450,678
|
5,009,883
|
|
8,480,444
|
6,114,105
|
Other receivables
|
107,183
|
77,635
|
|
360,411
|
342,227
|
|
467,594
|
419,861
|
Prepayments
|
724,547
|
636,186
|
|
-
|
-
|
|
724,547
|
636,186
|
|
6,894,936
|
4,135,426
|
|
5,811,089
|
5,352,110
|
|
12,706,025
|
9,487,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
Non-current
|
|
Total
|
Company
|
2023
|
2022
|
|
2023
|
2022
|
|
2023
|
2022
|
|
£
|
£
|
|
£
|
£
|
|
£
|
£
|
Trade receivables
|
2,538,127
|
2,053,560
|
|
-
|
-
|
|
2,538,127
|
2,053,560
|
Technology licence contract
assets
|
3,029,766
|
1,104,221
|
|
5,450,678
|
5,009,883
|
|
8,480,444
|
6,114,105
|
Other receivables
|
44,970
|
330,956
|
|
345,240
|
319,791
|
|
390,210
|
650,747
|
Intercompany
receivables
|
471,658
|
6,485,690
|
|
-
|
-
|
|
471,658
|
6,485,690
|
Prepayments
|
652,422
|
596,828
|
|
-
|
-
|
|
652,422
|
596,828
|
|
6,736,943
|
10,571,256
|
|
5,795,918
|
5,329,674
|
|
12,532,861
|
15,900,930
|
The following details the trade
receivables that are stated net of any credit impairment provision,
as set out previously in Note 12 in accordance with IFRS
9.
|
|
|
|
|
|
|
Group
|
|
Company
|
Trade receivables
|
2023
|
2022
|
|
2023
|
2022
|
|
£
|
£
|
|
£
|
£
|
Gross trade receivables
|
3,136,943
|
2,376,337
|
|
2,596,235
|
2,053,560
|
Expected credit loss on trade
receivables
|
(103,503)
|
(58,953)
|
|
(58,108)
|
-
|
Gross contract assets
|
10,843,945
|
7,461,382
|
|
10,843,945
|
7,461,383
|
Expected credit loss on contract
assets
|
(2,363,501)
|
(1,347,278)
|
|
(2,363,501)
|
(1,347,278)
|
Trade receivables net of
provisions
|
11,513,884
|
8,431,489
|
|
11,018,571
|
8,167,665
|
23
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
Group
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
£
|
£
|
|
£
|
£
|
Cash at bank
|
|
14,765,910
|
14,170,965
|
|
6,356,259
|
5,595,827
|
Cash and cash equivalents comprise
over night and short term deposits of less than 3 month and are
held with authorised counterparties of a high credit standing.
Management does not expect any losses from non-performance by the
counterparties holding cash and cash equivalents, and there are no
material differences between their book and fair values.
Cash held by Aquis Exchange Europe
SAS is predominantly held in a Sterling denominated bank
account.
24
TRADE AND OTHER PAYABLES
|
|
|
|
|
|
|
|
|
Group
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
Current
|
|
£
|
£
|
|
£
|
£
|
Trade payables
|
|
759,002
|
510,384
|
|
674,307
|
510,068
|
Accruals
|
|
1,814,407
|
1,508,760
|
|
1,388,911
|
1,287,138
|
Deferred Revenue
|
|
934,423
|
1,358,479
|
|
-
|
251,250
|
Social security and other
taxation
|
|
343,729
|
220,593
|
|
256,777
|
220,593
|
Intercompany payables
|
|
-
|
-
|
|
824,405
|
6,285,752
|
Other payables
|
|
58,772
|
3,250
|
|
84,132
|
-
|
Overseas corporation tax
payable
|
|
33,798
|
144,469
|
|
-
|
-
|
Short Term Lease
Liabilities
|
|
527,339
|
522,800
|
|
437,400
|
437,400
|
|
|
4,471,470
|
4,268,735
|
|
3,665,932
|
8,992,201
|
In January 2023 forward contracts
were taken by the Company in order to economically hedge against
foreign exchange movements in contract asset balances denominated
in US Dollars. These derivatives are remeasured at fair value at
each reporting date with the movement recognised in profit or
losses within other gains and losses.
Further disclosures on the Group's
risk management frame on foreign exchange risk and the use of
derivatives to manage risk is discussed in Note 5. These
derivatives are the Group's only financial instrument that is
measured at fair value and are classified at level 2 of fair value
hierarchy measurements. Future cash flows are estimated based on
quoted forward exchange rates and contract forward rates. There are
no significant unobservable inputs. The year to date gain on these
items is £51,407.
25
LEASES
Right of Use
Assets
The right-of use asset was
measured at the amount equal to the lease liability, plus prepaid
lease payments (being the unamortised portion of the rent deposit
asset). The right of use asset is depreciated over the term of the
lease and was accounted for during the year ended 31 December 2023
as follows:
|
Group
|
|
|
Company
|
|
Property
|
|
|
Property
|
|
£
|
|
|
£
|
Carrying amount at 1 January
2022
|
3,747,965
|
|
|
3,160,267
|
Foreign currency translation
differences
|
(10,286)
|
|
|
-
|
Depreciation for the
year
|
(397,222)
|
|
|
(329,864)
|
Carrying amount at 31 December
2022
|
3,340,457
|
|
|
2,830,403
|
Remeasurement of Paris
lease
|
12,618
|
|
|
-
|
Depreciation for the
year
|
(383,822)
|
|
|
(315,896)
|
Carrying amount at 31 December
2023
|
2,969,253
|
|
|
2,514,507
|
Rent deposit
asset
The rent deposit asset (excluding
the prepaid right of use portion which has been included in the
calculation of the right of use asset above) is a financial asset
measured at amortised cost and was accounted for during the year
ended 31 December 2023 as follows:
|
Group
|
|
|
Company
|
|
Rent Deposit
Asset
|
|
|
Rent Deposit
Asset
|
|
£
|
|
|
£
|
Carrying amount at 1 January
2022
|
612,042
|
|
|
598,141
|
Recovery of rent
deposit
|
(269,956)
|
|
|
(282,315)
|
Finance income on rent deposit
asset for the year
|
14,561
|
|
|
14,121
|
Carrying amount at 31 December
2022
|
356,647
|
|
|
329,947
|
Remeasurement of Paris
lease
|
(7,619)
|
|
|
-
|
Foreign currency translation
differences
|
(4,354)
|
|
|
-
|
Finance income on rent deposit
asset for the year
|
15,737
|
|
|
15,293
|
Carrying amount at 31 December
2023
|
360,411
|
|
|
345,240
|
Lease
liability
The lease liability is calculated
as the net present value of the fixed payments (including
in-substance fixed payments), less any lease incentives receivable
(such as any rent-free periods). The lease payments are discounted
using the interest rate implicit in the lease. The lease liability
is measured at amortised cost and was accounted for during the year
ended 31 December 2023 as follows:
|
Group
|
|
|
Company
|
|
Lease
Liability
|
|
|
Lease
Liability
|
|
£
|
|
|
£
|
Carrying amount at 1 January
2022
|
3,655,652
|
|
|
3,066,902
|
Foreign currency translation
differences
|
(24,672)
|
|
|
-
|
Finance expense on lease liability
for the year
|
67,691
|
|
|
51,069
|
Lease payments made during the
year
|
(300,994)
|
|
|
(231,259)
|
Carrying amount at 31 December
2022
|
3,397,677
|
|
|
2,886,712
|
Finance expense on lease liability
for the year
|
103,249
|
|
|
88,571
|
Lease payments made during the
year
|
(516,482)
|
|
|
(437,400)
|
Carrying amount at 31 December
2023
|
2,984,444
|
|
|
2,537,883
|
Of which are:
|
|
|
|
|
Current
|
527,339
|
|
|
437,400
|
Non-current
|
2,457,105
|
|
|
2,100,483
|
|
2,984,444
|
|
|
2,537,883
|
The non-current and current
portions of the lease liability are included in 'Lease liability'
and 'Other Payables' (Trade and Other Payables) on the Statement of
Financial Position respectively.
Net finance expense on leases
|
|
|
|
|
|
|
Group
|
|
Company
|
|
2023
|
2022
|
|
2023
|
2022
|
|
£
|
£
|
|
£
|
£
|
Finance expense on lease
liability
|
103,249
|
67,691
|
|
88,571
|
51,069
|
Finance income on rent deposit
asset
|
(15,737)
|
(14,561)
|
|
(15,293)
|
(14,121)
|
Net finance expense relating to
leases
|
87,512
|
53,130
|
|
73,278
|
36,948
|
The finance income and finance
expense arising from the Groups leasing activities as a lessee have
been shown net where applicable as is permitted by IAS 32 where
criteria for offsetting have been met.
Amounts recognised in profit and loss
|
Group
|
|
Company
|
|
2023
|
2022
|
|
2023
|
2022
|
|
£
|
£
|
|
£
|
£
|
Depreciation expense on
right-of-use assets
|
(383,822)
|
(397,222)
|
|
(315,896)
|
(329,864)
|
Finance expense on lease
liability
|
(103,249)
|
(67,691)
|
|
(88,571)
|
(51,069)
|
Finance income on rent deposit
asset
|
15,737
|
14,561
|
|
15,293
|
14,121
|
Short term lease
expense
|
(43,310)
|
(35,816)
|
|
-
|
-
|
Net impact of leases on profit or
(loss)
|
(514,644)
|
(486,168)
|
|
(389,174)
|
(366,812)
|
The contractual terms of the Paris
lease state that lease payments are indexed which has resulted in a
remeasurement of the lease liability to reflect an uplift of future
expected payments. An undiscounted rate has been used to remeasure
the Paris lease. The Company lease based in the UK is not subject
to variable rates.
26
SHARE CAPITAL
|
|
|
|
|
|
2023
|
2022
|
Group
|
|
£
|
£
|
Ordinary share capital
|
|
|
|
Issued and fully
paid
|
|
|
|
27,509,448 (2022: 27,505,450)
Ordinary shares of 10p each
|
2,750,945
|
2,750,545
|
Issue of 3,998 new shares of 10p
each
|
|
-
|
400
|
Issue of 7,333 new shares of 10p
each
|
|
733
|
-
|
27,516,781 (2022: 27,509,448)
Ordinary Shares of 10p each
|
2,751,678
|
2,750,945
|
27
TREASURY SHARES
|
|
|
Group
|
2023
|
2022
|
|
£
|
£
|
At the beginning of the
year
|
3,350,325
|
1,526,835
|
Purchase of additional
shares
|
1,215,243
|
1,952,325
|
Shares vested or sold by
trusts
|
(157,189)
|
(132,230)
|
Change in level of surplus cash
held by trusts
|
(18,934)
|
3,395
|
At the end of the year
|
4,389,445
|
3,350,325
|
Treasury shares are held by the
Employee Benefit Trusts. Further disclosures about the value of
shares acquired by the EBT can be read in note 21. The Investment
in Trust has been consolidated within the Group's results as the
parent company (Aquis Exchange PLC) can substantially direct the
investment activities of the Trusts, thus the Trusts' assets have
been consolidated as Treasury Shares.
In the year to 31 December 2023
331,179 shares with a nominal value of £33,178 were bought at a
total cost of £1,215,243 and held in Treasury (2022 - 481,301
shares with a nominal value of £48,130 were bought at a total cost
of £1,952,325 and held in Treasury).
As at 31 December 2023, 261,956
shares (2022: 186,155) were held in the Employee Share Incentive
Plan Trust, and a further 840,175 shares (2022: 584,797) held in
the Trust relating to Restricted Share Plan, Company Share
Ownership Plan and Premium Priced Option Plan.
At 31 December 2023 £17,676,
(2022: £36,610) of surplus cash was held within the Trusts, which
had yet to be used to purchase Treasury shares, but remained under
the control of the Trusts.
|
|
|
Group
|
2023
|
2022
|
|
£
|
£
|
Treasury Shares held
|
4,371,769
|
3,313,715
|
Cash Held in Employee
Trusts
|
17,676
|
36,610
|
At the end of the year
|
4,389,445
|
3,350,325
|
28
CASH GENERATED BY OPERATIONS
|
|
|
|
2023
|
2022
|
Operating cash flows
|
£
|
£
|
For the year ended 31 December 2023
|
|
|
|
|
|
Group
|
|
|
Profit before tax
|
5,194,887
|
4,526,409
|
|
|
|
Adjustments for:
|
|
|
Impairment charge/(credit) on
contract assets
|
1,016,223
|
(133,484)
|
Impairment charge on trade and
other receivables
|
44,550
|
12,784
|
Fair value adjustment to
derivatives
|
(51,407)
|
-
|
Equity settled share based payment
expense
|
1,085,658
|
819,872
|
Amortisation of intangible
assets
|
612,257
|
498,955
|
Depreciation and impairment of
property, plant and equipment
|
760,308
|
760,537
|
Finance expense
|
103,249
|
67,691
|
Finance income
|
(15,737)
|
(14,561)
|
Interest income
|
(384,712)
|
(28,722)
|
|
3,170,389
|
1,983,072
|
|
|
|
Movement in working capital:
|
|
|
Decrease/(Increase) in trade and
other receivables
|
(4,277,113)
|
(1,409,263)
|
Increase/(Decrease) in trade and
other payables
|
309,470
|
(1,195,918)
|
Cash generated by operations
|
4,397,633
|
3,904,300
|
|
|
|
Corporation taxes paid
|
(293,914)
|
116,415
|
|
|
|
Net cashflow from operating
activities
|
4,103,719
|
4,020,715
|
|
|
|
|
2023
|
2022
|
Operating cash flows
|
£
|
£
|
For the year ended 31 December 2023
|
|
|
|
|
|
Company
|
|
|
Profit before tax
|
3,988,392
|
3,637,819
|
|
|
|
Adjustments for:
|
|
|
Impairment charge/(credit) on
contract assets
|
1,016,223
|
(133,484)
|
Impairment charge on trade and
other receivables
|
58,108
|
-
|
Fair value adjustment to
derivatives
|
(51,407)
|
-
|
Equity settled share based payment
expense
|
1,085,658
|
819,872
|
Amortisation of intangible
assets
|
612,257
|
498,954
|
Depreciation and impairment of
property, plant and equipment
|
687,019
|
688,615
|
Finance expense
|
88,571
|
51,069
|
Finance income
|
(15,293)
|
(14,121)
|
Interest income
|
(112,154)
|
(2,416)
|
|
3,368,982
|
1,908,489
|
|
|
|
Movement in working capital:
|
|
|
Decrease/(Increase) in trade and
other receivables
|
2,309,031
|
(8,642,417)
|
(Decrease)/Increase in trade and
other payables
|
(5,326,269)
|
5,297,956
|
Cash generated by operations
|
4,340,136
|
2,201,847
|
|
|
|
Corporation taxes paid
|
-
|
-
|
|
|
|
Net cashflow from operating
activities
|
4,340,136
|
2,201,847
|
29 RELATED PARTY TRANSACTIONS
Remuneration of key management personnel
The remuneration of the directors,
who are key management personnel, is set out below in aggregate for
each of the categories specified in IAS 24 Related Party
Disclosures. There are no directors to whom retirement benefits are
accruing in respect of qualifying services. No directors exercised
share options in the year (2022: none).
|
|
|
|
|
|
2023
|
2022
|
Group
|
|
£
|
£
|
Salaries and other short term
benefits
|
1,569,531
|
1,486,805
|
Share based payments
|
|
490,437
|
348,300
|
Total
|
|
2,059,968
|
1,835,105
|
|
|
|
|
|
|
2023
|
2022
|
Company
|
|
£
|
£
|
Salaries and other short term
benefits
|
1,123,238
|
1,088,008
|
Share based payments
|
|
246,592
|
174,150
|
Total
|
|
1,369,830
|
1,262,158
|
During the year the Group has
entered into, in the ordinary course of business, transactions with
other related parties. All transactions between Aquis Exchange Plc
and its subsidiaries are eliminated on consolidation. There are no
related party balances outstanding at Group level. Costs incurred
by the Company on behalf of its subsidiary companies are recharged
to these Companies though a Management fee and service charge,
which for 2023 represented a net recharge of £5,678k (2022:
£5,528k) to Aquis Europe SAS and a net recharge of £690k (2022:
£450k) to Aquis Stock Exchange Limited. The net cash payments in
the year and balances outstanding at the year end were:
|
|
|
|
Receipts
and
|
|
Amounts
owed
|
|
Amounts owed
to
|
2023
|
|
|
|
(Payments)
|
|
from related
parties
|
|
related
parties
|
Company
|
|
|
|
£000s
|
|
£000s
|
|
£000s
|
Aquis Stock Exchange
Ltd
|
|
|
|
2,565
|
|
551
|
|
-
|
Aquis Europe SAS
|
|
|
|
(1,385)
|
|
-
|
|
904
|
Total
|
|
|
|
1,180
|
|
551
|
|
904
|
|
|
|
|
Receipts
and
|
|
Amounts
owed
|
|
Amounts owed
to
|
2022
|
|
|
|
(Payments)
|
|
from related
parties
|
|
related
parties
|
Company
|
|
|
|
£000s
|
|
£000s
|
|
£000s
|
Aquis Stock Exchange
Ltd
|
|
|
|
600
|
|
533
|
|
-
|
Aquis Europe SAS
|
|
|
|
(1,389)
|
|
5,953
|
|
(6,286)
|
Total
|
|
|
|
(789)
|
|
6,486
|
|
(6,286)
|
30
SHARE PREMIUM ACCOUNT
|
|
|
Group
|
2023
|
2022
|
|
£
|
£
|
At the beginning of the
year
|
11,785,045
|
11,771,462
|
Issue of new shares
|
24,712
|
13,583
|
At the end of the year
|
11,809,757
|
11,785,045
|
31
OTHER RESERVES
|
|
|
|
|
|
|
|
|
Group
|
|
Company
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
£
|
£
|
|
£
|
£
|
Reserves relating to share-based
payments
|
|
2,741,589
|
1,813,119
|
|
2,741,589
|
1,813,119
|
32 CONTROLLING PARTY
In the opinion of the Directors,
there is no single overall controlling party.
No individual shareholder had a
shareholding of 10% or above as at 31 December 2023.
33
EVENTS OCCURING AFTER THE REPORTING PERIOD
There are no significant post
balance sheets of which the Directors are aware.