NZX first half profit dips 27 per cent

Stock exchange operator the New Zealand Exchange Ltd (NZX) today reported a 27 per cent fall in profit to $1.48 million for the half year ended June 30.

The NZX, which demutualised and listed as a public company in June 2003, blamed the poor result on higher costs and writedowns.

The exchange operator was hit during the period by the collapse of Access Brokerage, which saw earnings before interest and tax (ebit) fall 29 per cent to $1.65 million.

It was also a slow first half in terms of new equity listings.

"While there are a number of listings in the planning stages which have been publicly discussed for the second half of 2005, the first half was much slower than the comparable period in 2004," NZX chief executive Mark Weldon said.

Transactions fell during the second quarter, after a strong start.

"Strong first quarter transaction numbers were offset in the second quarter, particularly during May when the main indices were down sharply," Mr Weldon said.

The NZX has written down the carrying value of its agreement with the Sydney Futures Exchange to provide a trading and clearing platform for futures and options.

The delayed launch of these products and revised revenue projections resulted in a writedown of $360,000, in addition to $82,000 in amortisation for the half-year period.

IT spending rose 31 per cent on the same period a year ago, reflecting the increased operating costs of NZX's new telecommunications network linking market participants and NZX's data centres in Auckland and Wellington.

First half operating ebitda increased 9.4 per cent versus the first half of 2004. This result was achieved on operating revenue of $8.65 million, up 14.1 per cent on 2004.

"NZX is confident that New Zealand's capital markets will continue to mature and evolve and that NZX's investments are well place to capture value from that evolution," chairman Simon Allen said.

Shares in the NZX last traded at $7.70, having fallen 14 per cent during the period. That compares with a 6 per cent rise in the NZX's benchmark NZSX-50 index during the period, to record levels.

- NZPA