Irish Stock Exchange reports massive fall in profits

THE Irish Stock Exchange has seen a dramatic turn in its fortunes, reporting a pre-tax loss of €291,000 for 2007, down from pre-tax profits of €21.22 million in 2006, as a result of losses on long term equity investments.

The accounts of the Irish Stock Exchange Limited lodged with the Companies Office show that while the company saw revenues jump from €25.5m in 2006 to €30.3m in 2007, pre-tax profits nose dived as a result of €15m write down “on unrealised losses on investments held for trading”. In 2006 the company recorded a gain of €9.6m on “unrealised gains on investments held for trading”.

The directors report concentrates on the company’s operating profit — €10.755m for 2007 compared to the restated €10.27m achieved in 2006.

Company chief executive Deirdre Somers, who is attending a conference, was unavailable for comment.

Addressing the loss on investments held for trading the director’s report states:

“This is due to the volatility in the equity markets (particularly in the last quarter of 2007) and because the company’s policy is to mark investments to market.

“This investment loss of €11,043,000 in 2007 compares to investment income of €10,888,000 in 2006. The investments held by the company are long term in nature and the company is confident that the book losses will be more that recovered in the long term.”

The report cites the main area of growth in income as fees from listing debt instruments, up 26% on 2006.

“Administration expenses incurred by the company increased by 28% from €15.287m in 2006 to €19.557m in 2007. The main component of administration expenses is staff costs. 2007 saw a rise in staff costs of 43% from €7.79m in 2006 to €11.13m in 2007. However, when non-recurring staff costs are omitted the increase in staff costs from 2006 to 2007 is 12%, which is due primarily to the increase in staff numbers from an average of 75 in 2006 to an average of 87 in 2007,” the accounts state.

Pension costs jumped from €484,000 in 2006 to €1.3m. There was a termination payment/completion bonus of €812,000 incurred in 2007 where none was incurred in 2006.

In June of 2007 chief executive Tom Healy retired after more that 20 years with the company.