Capital way to improve profit

Profit at the New Zealand Exchange jumped 40 per cent in the first quarter due to continued strong performance from the local capital markets.

The country's stock exchange operator said yesterday its net profit for the three months to March was $1.15 million, up from $830,000 the year before.

NZX chief executive Mark Weldon said double-digit growth demonstrated the "soundness of an ongoing focus on creating operating leverage and generating cashflow from the core markets business and its subsidiaries.

"In addition, improved forecasts for the rest of 2006 reflect the ongoing growth."

A spokeswoman for the NZX said the company was unable to disclose those forecasts.

This profit growth was achieved on a 17 per cent rise in revenue to $4.83 million.

The results showed financial performance was largely independent of short-term market sentiment.

"Listings and index performance have been stronger this quarter than the equivalent period in 2005," Weldon said.

"However, NZX's sustainable, independent and growing revenue streams continue to deliver consistent and solid results irrespective of these factors."

The business infrastructure of rural data supplier Agri-Fax, bought earlier this month, would undergo a phased integration.

"Our investment in Agri-Fax is another means of using existing NZX assets to add value to the rural sector, which we recognise as critical to the economy," Weldon said.

Subsidiary funds management business Smartshares finished the quarter with $352 million in funds under management - $215 million in listed exchange traded funds and $137 million in non-listed wholesale funds.

Geoff Brown, head of Smartshares, said it was well positioned to grow funds under management throughout 2006 "with excellent returns across all four funds ... especially smartMOZY and smartFONZ".