First dividend boost for NZX in five years

NZX chief executive Mark Peterson. Photo/Dean Purcell.

The NZX is to increase its dividend payout for the first time in five years after a strong annual result.

The stock exchange operator reported a net profit after tax of $14.8 million for the year to December 31 - up 61.6 per cent on the prior year.

The rise came off the back of an increase in operating earnings which grew 31 per cent to $29 million - its highest level of operating earnings since becoming an exchange.

The company also cut its expenses by 11.6 per cent although its revenue remained flat increasing just 1.1 per cent to $75.3m.

Mark Peterson, NZX chief executive, said the result was underpinned by disciplined cost management, efficiency improvements, and a strong focus on its customers.

"Business highlights include the performance of our Smartshares Exchange Traded Funds
business, which delivered double-digit growth and record retail application numbers, our dairy derivatives market, which presents an opportunity for sustained long term profitability for the exchange, and subscription and license growth in our data and insights business."

Peterson said 2017 marked a fundamental reset of NZX as it refreshed its strategy to refocus on the core markets business.

"Public markets play a vital and active role in the New Zealand economy and it is important that we drive initiatives to support this. New Zealand's capital market must have more investable product, greater participation, deeper liquidity, and a global presence."

The NZX had a poor year for new equity market listings with just one in 2017 but new debt market listings helped boost its listing fee revenue by 11.4 per cent.

Revenues from its fund management business which includes KiwiSaver and its Smartshares Exchange Traded Funds grew 13.5 per cent to $14.8m.

The company said it had also entered into a non-binding agreement to sell Farmers Weekly - a non-core asset to the business.

The NZX said it would pay a dividend of 3.1c per share, up from 3c for the second half resulting in a full year dividend of 6.1c per share and forecast operational earnings to be between $28m and $31m for the 2018 financial year.