NZX 1H 2012 financial results – current resilience, well positioned for future growth
20 August 2012 - NZX’s results for the first half of 2012 demonstrate the resilience of the Information, Markets and Infrastructure system that has enabled NZX to maintain a solid performance in key areas in the face of ongoing global challenges.
Operating revenue reached $26.5 million, 1% higher than the prior corresponding period (“PCP”) total of $26.1 million. Expenses rose from $14.5 million to $16.9 million. This includes $2.0 million of costs associated with the CEO transition, other non-recurring items and the Ralec litigation. In addition, capitalisation of staff costs decreased by $1.1 million over PCP as a number of projects moved from development to operation.
As a result, EBITDAF was down 18% to $9.57 million, and NPAT fell 28% to $3.25 million.
“NZX has delivered a solid performance in challenging global conditions that have seen contraction in revenues amongst other exchanges,” said NZX CEO Tim Bennett.
At the same time, NZX is gearing up for the next stage of growth into new and diversified market offerings in late 2012 and into 2013.
Strong growth in Agri information, at 8% over PCP, reflects the relevance of quality data and commentary both to this sector and the broader economy.
Growth in securities information was 2%, with increases in subscription revenues partially offset by declining terminal numbers.
“Our agricultural information business continues to grow, contrary to global trends. Subscription growth across our print and online information offerings translates to sustainable revenue, especially as readership outside the rural sector continues to climb,” said NZX Head of Agri Tony Leggett.
Commodities trading was the standout performer in Markets, with trading volumes on the Clear Grain Exchange more than doubling over the previous half year’s totals.
Trading in NZX Dairy Futures also more than doubled over the same period.
These excellent results were offset by the deferment of some planned IPO’s and a lower rate of secondary capital raisings than the previous year, which resulted in an overall revenue decline of 2% on PCP.
Whilst trading volumes were considerably higher than PCP, clearing revenues were impacted by lower than expected trade values, resulting in an overall uplift of 1% on PCP.
Trade value was down 7% on PCP in the first half of 2012. However, compared with the peak in trade volumes and value seen in August 2011, the decline is lower than on other exchanges in the Asia Pacific region.
Revenues in the Markets Operations businesses (Energy and the preparation for Trading Amongst Farmers) declined 2% on PCP, reflecting a strong increase in Energy revenues offset by lower revenues in other areas.
Expenses grew by $2.5 million, or 17% over PCP. Excluding one-off costs and the reduction in capitalisation, expenses declined by $0.3 million over the prior period.
The NZX Board has approved a dividend of 1.25 cents per share, fully imputed, for the second quarter of 2012, which is consistent with the Board’s stated policy of an increase of 1 cent per share per year (prior to adjustment for the May 2012 share split).
The NZX Board considers that a dividend at this level is appropriate given the sound free cash flow generated, but noting the ongoing impact of the global economic downturn. Equally, NZX can retain the flexibility to adjust future payments upward should conditions improve.
The dividend record date will be 31 August 2012, with a payment date of 14 September 2012.
Summary and Outlook
Tighter than expected operating conditions, particularly in the second quarter, are expected to continue into the second half of the year.
“Whilst the slower than expected growth on the listings side is primarily a reflection of external factors, we are investing in expertise that will help us lay the path for New Zealand companies to raise the capital they need to invest in growth and, ultimately, in creation of jobs for New Zealanders,” said Tim Bennett.
• 1H 2012 Financial Statements
• Appendix 1
• Appendix 7
• 2012 First Half Results Presentation