NZX profit jumps

Stock exchange operator New Zealand Exchange (NZX) today reported a net profit of $4.9 million for the year ending December 31, up 33 per cent on the previous year.

Earnings before interest, tax, depreciation and amortisattion (ebitda) rose 46 per cent to $6.5 million.

The profit was achieved on the back of a 19 per cent higher operating revenue of $19.5 million.
A fully imputed final dividend of 25c was declared.


NZX will also distribute about $16.2 million of capital to shareholders via a compulsory pro rata buy-back. This will be followed by a one-for-one share split.


The dividend and return of capital together represent a total capital return of $19.4 million.


NZX chief executive Mark Weldon said while NZX had previously relied on new listings and index performance, it now had sustainable and independent revenue streams.


These new revenue streams include exchange traded funds subsidiary Smartshares and registry business Link Market Services, which is a 50/50 joint venture with ASX Perpetual Registrars of Australia.


"Before NZX became a listed company, the old NZSE had no consistent earnings. What we have now is a record of growing earnings and cashflow which gives us new flexibility to optimise our balance sheet and cash position," Mr Weldon said.


He said Smartshares and Link had both reached break-even point and in the future would make positive contributions to NZX's cashflow.


Smartshares finished the year with $195 million in retail funds under management and over $100 million in (non-listed) wholesale funds.


Link finished 2005 with revenue of $3.1 million and ebitda of $616,000.


Over the next six months NZX will review its market supervision strategy, look at how to add more value to growth companies via its alternative market the NZAX, and also look at the pricing of services to issuers.


The results of these reviews will be available during the first and second quarters.


Further investment and acquisition opportunities would also be explored.


Shares in NZX last traded yesterday at $6.90, having ranged between $6.55 and $10.55 over the past 12 months.


- NZPA