KEY POINTS:
An increase in listings helped push first quarter operating revenue up 50 per cent to $7.2 million at stock market operator New Zealand Exchange Ltd (NZX).
Chief executive Mark Weldon said revenues had grown at twice the rate of expenses during the three months to the end of
March.
That could be clearly seen in the earnings before interest, tax, depreciation and amortisation (ebitda) figure, the best indication of how the business was doing, up 90 per cent to $3.2 million, he said.
Mr Weldon described the result as "very strong", comparing the figures to the 2006 full year ebitda of $10.5 million, itself an increase of 61 per cent from the year earlier.
With the first quarter its quietest for revenue, NZX was confident about the prospects for the rest of the year, he said.
The first quarter revenue rise was driven largely by increases in listings, with a significant number of debt and hybrid listings and secondary market activity during the period.
There was also continued strong growth in the market information area, Mr Weldon said.
The difference between the 48 per cent rise in net profit after tax, to $1.74m, and the 90 per cent rise in ebitda was due to interest from about $26m NZX had on its balance sheet in the first quarter last year, but which had since been returned in a capital payment.
The outlook was positive for the savings environment and capital markets with KiwiSaver scheme to be introduced, speculation about further tax incentives for the scheme, and investment taxation regime changes.
NZX had five listing applications in front of it for the second quarter, although there was no guarantee all would come to market, and he was aware of a similar number for the third quarter, Mr Weldon said.
He was also confident that with valuations on the New Zealand market historically strong, other company owners would be preparing to list at some point.
At the same time, the strength of the New Zealand dollar was making companies in this country relatively more expensive for overseas investors.
"I don't think it's necessarily a coincidence that in the last six months you've seen a little bit of a tail-off in M&A (mergers and acquisition) activity," he said.
NZX would continue to seek out opportunities to make acquisitions such as that of financial information provider IRG Data at the end of March.
That had continued the successful pattern of buying small bolt-on operations that could be brought inhouse and have capabilities added to them, Mr Weldon said.
Future acquisitions could possibly be larger , with NZX becoming confident in its ability to manage the integration of mergers.
A new trading system being bought by NZX had the ability to trade carbon and the company could have a statement on that issue next week.
NZX also said solid progress was being made on the joint venture AXE ECN (electronic communications network) Australian Market Licence application.
A business launch was expected around the end of June or early July.
ECNs are high-speed, low-cost platforms that provide off-market trade execution reporting services.
NZX shares were up 10c to $9.90 in early afternoon trade today.
- NZPA