NZX first-half profit rises 8.3% on jump in listings revenue
By Suze Metherell
Aug. 11 (BusinessDesk) - NZX posted an 8.3 percent increase in first-half profit as a flurry of listings drove revenue growth for the stock market operator.
Profit rose to $6.97 million, or 2.7 cents a share, in the six months ended June 30, from $6.4 million, or 2.5 cents a year earlier, the Wellington-based company said in a statement. Sales rose to $31.2 million from $30 million. Profit was just below Forsyth Barr's estimate of $7.1 million.
NZX is experiencing a flurry of listings, with Intueri Education Group, the private tertiary education company, Genesis Energy, the last of the government's power companies to be partially privatised, Serko, a travel booking firm and Gentrack, an airport and utilities software developer, all listing in the first half. Since its June balance date three more companies have joined the bourse, while Vista International Group debuts today and ERoad launches on Friday.
“We are continuing to experience positive growth in our capital markets, demonstrated by the seven initial public offerings we’ve seen year to date, and with more listings in the pipeline,” said chief executive Tim Bennett.
The biggest revenue contribution came from listings, which rose to $6.2 million from $5.7 million in the comparable period a year earlier. In the year ended Dec. 31, 2013, listings rose to be the biggest revenue earner for the stock market operator, as it generated $12.98 million in fees from that year's 10 initial public offers.
Securities information generated $4.9 million of sales, up from $4.4 million a year earlier, while securities trading revenue rose 8.3 percent to $2.2 million, participant services rose to about $1.7 million from $1.5 million, and Securities clearing rose to 2.7 percent to $2.2 million.
The markets division, which includes the energy market and Fonterra Shareholders' Market, posted a 15 percent decline to $5.4 million, which the company attributed to reduced energy consultancy work and the loss of a gas market contract in late 2013.
Sales from commodities trading fell to $671,000 from $770,000 and dairy derivatives generated $88,000 from $25,000. Agri information revenue climbed 5.4 percent to $6 million and fund services revenue was little changed at $1.2 million.
Total expenses rose to about $19 million from $18.2 million, driven by a 31 percent increase in professional fees, which NZX said "were high due to Ralec litigation costs, tax audit related work and legal costs associated with the launch of the new NZ Core Equity fund." Employee costs rose to about $10.5 million from $9.8 million.
The company will pay a first-half dividend of 3 cents and said it was on track to make payments for the full year of 6 cents a share.
NZX shares last traded at $1.27 and have gained 2.4 percent this year.