The Irish Stock Exchange, which trades as Euronext Dublin, saw its pretax profit drop 17 per cent to €18.6 million last year as share trading levels declined amid the exit of CRH from the market and as company payments to other arms of the wider Euronext group rose.
The latest annual accounts for the exchange, filed this week with the Companies Registration Office, also showed that the company handed over €16.2 million in dividends to its parent earlier this year on the back of the results for 2023.
The Irish unit has handed over more than €81 million in dividends in total to Paris-headquartered Euronext since its takeover in 2018, equating to almost half of the €167 million paid to buy the business from financial firms Davy, Goodbody Stockbrokers, Cantor Fitzgerald, Investec and the now defunct Campbell O’Connor.
The Irish exchange operator’s revenues fell by 4 per cent last year to €38.1 million, as the total value of shares traded on the market fell by 5.8 per cent to €64.5 billion. This was driven by former market heavyweight CRH cancelling its Irish listing last September as it moved its main quotation to New York and a drop-off in market volatility from 2022. More equities are traded during volatile conditions.
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However, the company’s prized global bond listings business – the world’s leading exchange for such activity – had a strong year, with 7,373 debt instruments admitted to listing, fuelled by green bonds. As of the end of 2023, some 44,190 debt instruments were listed on the exchange.
Dublin accounts for 80 per cent of all bonds listed on exchanges across the Euronext network. Euronext also runs the Paris, Brussels, Amsterdam, Milan, Lisbon and Oslo markets.
Last year saw 114 new fund listings in Dublin, up from 100 for 2022, “reflecting the strong appetite for sustainable funds and exchange traded funds”, the Irish Stock Exchange said in its annual financial statement.
However, the total number of investment fund classes listed on the Irish bourse fell 17 per cent to 2,244. This continues a trend of investment fund delistings in recent years as a result of heightened regulation and increased cost pressures on asset managers.
The decline in profits last year also reflects how company payments to other arms of the Euronext group – through a profit-sharing agreement for services – more than trebled to €4.1 million.
Officials from Euronext Dublin and the wider Irish capital markets ecosystem made a submission to the Government in May looking for a series of supports to reboot the domestic equities market.
About half of the trading volume of Euronext Dublin has been wiped away in the past year with Flutter Entertainment and Smurfit Kappa joining CRH in exiting the Dublin market.
The number of companies on the Iseq All-Share index has fallen by more than 50 per cent to 25 since Euronext acquired the exchange in 2018, as takeovers and delistings of public companies outweighed initial public offerings (IPOs). Only three companies have come to the market in Dublin in the past five years.
Proposals put forward by the lobbying group include: a tax-friendly retail investment plan along the lines of the popular individual savings accounts (ISAs) scheme launched in the UK 25 years ago; Government backing for the establishment of a €400 million cornerstone fund to invest in IPOs; and tax incentives to allow company founders to sell some of their shares as part of a flotation.
The exchange said in its financial statements that the recent market exits have resulted in hits “from both a trading volume and reputational perspective”.
“The company is working closely with the equity markets ecosystem to develop proposals for the Irish Government which, if implemented, would be impactful in creating more accessible and attractive public equity markets to support the growth and funding needs of scaling Irish companies,” it said.
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