# The International Stock Exchange to continue to expand its customer base

- Link: https://www.directorstalkinterviews.com/the-international-stock-exchange-to-continue-to-expand-its-customer-base/4121127221
- Published: 2023-09-14T07:25:26+01:00
- Author: Amilia Stone

**The International Stock Exchange** (TISE) had a strong first half to 2023, with
revenue +7% to £5.2m and fully diluted EPS +17% to 83p, against a backdrop of subdued
financial markets. The performance demonstrated the resilience of the business with
the strength of the repeating annual listing fees. Our forecasts are largely unchanged,
but we have raised our valuation range: we have lowered the discount rate we apply
to reflect the consistency of returns, which have proved stronger than we first 
anticipated.

 * **Strategy:** The International Stock Exchange specialises in listings that are
   sought for technical reasons, typically to ensure tax advantages or lower costs,
   while still being on a recognised exchange. It is home to one of Europe’s leading
   professional bond markets, and is always looking to expand its range of products
   and geographical source of clients.
 * **Opportunities:** The company has expanded the active membership of the Exchange,
   notably in Ireland and, most recently, Bermuda. It is looking to win a higher
   share of bond listings. It has also recently established a private markets service
   for unlisted companies.
 * **Valuation:** There are no directly comparable listed exchanges with the same
   business model: other listed exchanges have earnings models based on trade execution
   and market data. We have used a DCF model, with a 12% discount rate, to reflect
   regulatory uncertainty. Our derived central value is £74m, or 2,477p per share,
   fully diluted, with a range of £60m to £91m.
 * **Key risk:** The risks from rule changes initiated by the UK Treasury, and implemented
   in 2022, have been less severe than initially anticipated. The government continues
   to tweak the rules around the definition of who may qualify for the new UK ruling,
   to encourage a greater take-up of the new regime. If successful, this could eat
   into TISE’s core business.
 * **Investment summary:** The International Stock Exchange aims to continue to 
   expand its customer base and build on its growth record. With a strong track 
   record, good cash generation and a robust balance sheet, we believe TISE is well-
   placed to diversify its revenues and continue to trade very profitably. The strength
   shown in 1H’23 demonstrates the resilience of the business model, in our view.

[230913-Hardman-The-International-Stock-Exchange-TISE-Strong-first-half-performance](https://www.directorstalkinterviews.com/wp-content/uploads/2023/09/230913-Hardman-The-International-Stock-Exchange-TISE-Strong-first-half-performance.pdf)
[Download](https://www.directorstalkinterviews.com/wp-content/uploads/2023/09/230913-Hardman-The-International-Stock-Exchange-TISE-Strong-first-half-performance.pdf)

Share on: