Virt-x Makes First Profit, Nears Trading Target

by Carla Johnson, Investors Offshore, London

24 July 2002

Virt-X, the London-based electronic stock exchange formed in July 2000 through an alliance of the Swiss stock exchange and UK electronic exchange Tradepoint has reported a profit of £2.6m for the six months to June 30; it had previously been loss-making.

Antoinette Hunziker-Ebneter, Virt-x chief executive said: "Virt-x has produced a sound set of results for the first half of the year against the background of a difficult equity market environment."

Lee Hodgkinson, the exchange's director of business development, said that losses reported in previous trading periods had included significant exceptional charges and set-up costs incurred during the transformation of the company over the past two years as it moved from the Tradepoint platform to Virt-X.

The exhange said sales were £22.88m in the six months to June, up from £11.30m in the six months to last September (the reporting period was changed last year).

The company said that it had processed 4m trades worth €328bn, representing a 9.3% market share of trading in the Dow Jones Stoxx 600 during the second quarter of the year, close to its target of 10%, after managing only 7.9% during the first quarter.

The London-based electronic exchange was designed to trade the top 600 European stocks, although initially the stocks forming the old SWX represented the great majority of trading. It was hoped at the time it was launched that a 'one-stop' European platform would prove attractive to investment bankers, who have traditionally complained the fragmented European equity trading results in high costs.

There had been recent speculation that Virt-x might be seeking a merger partner, with Euronext being mentioned as a possible suitor. But with these results, and with the lower transaction costs in the offing after last week's merger of European settlement agency Euroclear with London-based CrestCo, Virt-x may be feeling more comfortable.

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