Cantor Fitzgerald Ireland, which was previously Dolmen stockbrokers, has valued its 8.4 per cent stake in the Irish Stock Exchange at more than €9.5 million, putting a putative total valuation on the exchange of close to €115 million.
The valuation is revealed in Cantor's financial results for 2014, which have been obtained by The Irish Times. The results show Cantor grew fee income by about €600,000 last year to €15.7 million.
The firm, which is run by stockbroker Ronan Reid, recorded a profit for the year of just more than €6 million. The results included a €4.6 million dividend, a result of the Irish Stock Exchange's demutualisation in April 2014. Cantor's profit from its operating activities was about €760,000.
The recognition of Cantor’s ISE stake gives the first real insight into the valuation of the stock exchange in Temple Bar, which is owned by five Dublin stockbroking firms including Cantor.
Davy, Goodbody and Campbell O’Connor are all unlimited entities and so don’t file public accounts, while Investec’s stockbroking arm has yet to file accounts covering the period of the demutualisation.
Cantor says in its results that there is “no active market” for its ISE stake, but says it arrived at its valuation based upon the metrics applied to stock exchanges in other countries.
Using Cantor’s valuation method, Davy’s 38 per cent stake is worth about €43.7 million, while the near 27 per cent stake of second largest shareholder, Goodbody, is worth €30.7 million. Campbell O’Connor’s stake is the same size as Cantor’s, while Investec’s 18.5 per cent stake is worth about €21.3 million.
Cantor's accounts show it paid close to €1 million to buy more shares in the ISE during the year. This refers to the original 6 per cent share owned by Ulster Bank's parent, Royal Bank of Scotland, which was offloaded in 2014 mostly to Cantor and Campbell O'Connor, with smaller amounts sold to the other three.
Mr Reid yesterday welcomed Cantor’s financial performance in 2014 as the result of a “year of improvement”. The firm said the publication of its finances “allows for clients to have full visibility” of its performance.
“[We] have continued to grow both the retail financial services and institutional bond divisions, in addition to recruiting a number of new hires within corporate finance,” he said.
Cantor is competing to pick up more asset management and wealth business, as the economy recovers and Irish investors take on more risk.