Euronext recoups quarter of €167m Irish exchange cost

Cantillon: Revenues have averaged almost €41 million over the past two years

Euronext delivered a €167 million pay-day to five Irish finance houses – Davy, Goodbody Stockbrokers, Cantor Fitzgerald, Investec and the now defunct Campbell O’Connor – when it acquired the Irish Stock Exchange from them in 2018.

However, the pan-European bourse operator, also owner of the Amsterdam, Brussels, Paris, Lisbon, Oslo and Milan stock exchanges, is making headway in recouping its investment.

The latest set of annual accounts of The Irish Stock Exchange plc, which now trades as Euronext Dublin, show that the business has paid and pledged over €43.4 million of dividends to its parent since 2019. It equates to more than a quarter of the purchase price.

Revenues at Euronext Dublin have averaged almost €41 million over the past two years, compared to an average of a little over €32 million for 2017 and 2018, the years in which it was put on the market and the sale closed, respectively.

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Debt listings on the world’s No. 1 exchange for the listing of bonds have jumped by more than a third over the past four years, to just under 42,000 debt instruments – with the Irish unit having become the hub of the wider group’s bond listings business.

However, with the global bond markets currently in turmoil, activity in this area will have quietened down this year.

Meanwhile, the market backdrop for a once lucrative line in fund listings has been less favourable in recent times, amid rising regulatory and cost pressures on asset managers.

While the number of share trades rose over the four years, the total turnover in Irish equities fell by 30 per cent during the period, to €68 billion last year. Even casual observes of the Irish market will know that company exits from the Irish stock market have also surpassed initial public offerings (IPOs) in recent years.

An area where Euronext has been successful has been in shaving 30 per cent off the Irish unit’s bill for salaries and employees’ benefits since it took over the business.

It’s come at a cost, however, of local jobs, as support functions were provided by other parts of the group. The average number of staff employed by the Irish exchange had fallen to 80 as of last December from 130 four years earlier.