NZX announces first quarter result

15 April 2005

Summary

• Operating EBITDA (excluding non-recurring expenditure): $1.32 million, versus $1.07 million for the first quarter 2004, an increase of 24.2%.
• Operating revenue (excluding interest income): $4.14 million, versus $3.47 million for the first quarter 2004, an increase of 19.1%.
• Operating expenses (excluding non-recurring items): $2.82 million, versus $2.41 million for the first quarter 2004; an increase of 16.9%.
• NZX Funds Management Smartshares, contributed operating revenue of $291,000; versus $65,000 in the first quarter of 2004.

New Zealand Exchange Limited (NZX) today announced that the first quarter operating EBITDA increased 24.2% versus first quarter 2004. This result was achieved on operating revenue of $4.14 million, representing an increase of 19.1% on the 2004 first quarter revenue.

“This first quarter result reflects a solid performance by the core markets business and the impact of our investments in growth extensions.” said NZX Chairman Simon Allen.

NZX Markets Business

“NZX's core market operations business benefited from healthy transaction activity within the first quarter,” said NZX CEO Mark Weldon. “While there were no new listings in the first quarter (versus 3 in Quarter 1 2004), secondary capital raising activity was strong.”

Key revenue items include:

• An increase in transaction revenue of 18.1% to $1.13 million, with average daily transactions reaching 2,675, an increase of 15% versus the same quarter in 2004.
• Listing revenues were unchanged from the first quarter 2004 at $1.21 million.

Key expense items include:

• Group operating expenses reached $2.82 million, an increase of 16.9% driven equally by an increase in NZX markets staff and IT costs, and an increase in operating costs attributable to NZX's Smartshares subsidiary.
• Expenditure for the NZX markets business increased 8.1%.
• Non-recurring expenditure relating to the collapse of Access Brokerage was $106,000 for the first quarter 2005.

Smartshares

Smartshares' operating revenue was $291,000 for the first quarter 2005.Total funds under management at 31 March 2005 were $181 million. Smartshares has 10,506 investors direct on register with average holdings of $17,228.

Smartshares' operating expenditure, excluding staff costs and non-recurring expenditure, was $243,000.

“NZX will continue to invest in Smartshares. In the second quarter we will add two new staff with deep funds management experience. We also expect to add new products throughout 2005,” said NZX Head of Finance and Strategy, Carl Daucher.

Link Market Services

Link Market Services is a 50/50 JV with ASX Perpetual Registries Limited of Australia . The first quarter result does not reflect an equity accounted contribution from this business. The full and half year results will reflect this investment.

Link Market Services, including BK Registries Limited, currently serves 114 clients in New Zealand including 71 listed issuers.

• Expected application for accreditation of ASX Perpetual's OSCAR technology for use by listed issuers in New Zealand in the second quarter 2005.
• NZX share registry migrated to Link Market Services on 21 March 2005.

The Statement of Financial Performance can be found on the NZX website at www.nzx.com/aboutus/investor/financial.

For more information, please contact:

Carl Daucher
Head of Finance & Strategy
New Zealand Exchange Limited
04-495-2462