NZX profit rises 39 per cent

New Zealand Exchange (NZX) today reported a 39 per cent rise in third quarter earnings before interest, tax, depreciation and amortisation (ebitda), compared with the same time last year.

The sharemarket operator reported ebitda of $2.51 million for the quarter, up from $1.81 million the previous year.

Operating revenue, excluding interest income, was $5.54 million, up 25 per cent on the $4.43 million reported for the third quarter of last year.

Operating expenses excluding non-recurring items were 15 per cent higher, at $3.02 million, compared with $2.62 million.

NZX chief executive Mark Weldon said listings, transactions, and market information were key revenue drivers of the markets side of NZX's business.

"For example, Vector's IPO (initial public offering) created 40,000 new shareholders and raised $600 million in capital. These types of market events, combined with an increasing number of available products to trade, will drive long term value for the NZX markets business," he said.

NZX has also expanded outside its core business, setting up registry business Link Market Services in a 50/50 joint venture ASX Perpetual Registrars Limited of Australia, and setting up exchange traded funds subsidiary Smartshares.

Mr Weldon sees the new enterprises as key to the company's growth.

"The additional horsepower for NZX's future results is the strong performance of Smartshares and Link, both of which form an integral part of NZX's strategy to contribute to the further development of New Zealand's capital markets," he said.

During the quarter Smartshares was awarded a passive mandate to manage the New Zealand Superannuation Fund's New Zealand equity allocation.

NZX said new Smartshares funds will be launched in 2006.

Smartshares has 10,463 investors on its register, and as at September 30 had total funds under management of $204 million.

The registry business Link serves 108 issuers in New Zealand, including Westpac Banking Corporation, and expects to serve the upcoming Goodman Fielder float.

Link is completing the integration of BK Registries, and is set to operate a single technology system within the next six months.

Upbeat

Mr Weldon was upbeat about NZX's outlook for the fourth quarter.

"On the basis of publicly disclosed intentions by companies to list or raise capital, with data revenues at higher levels, and with Link being successful in securing a good percentage of upcoming IPOs, NZX would expect to see this strong performance to be sustained through the fourth quarter of 2005," Mr Weldon said.

Average daily transactions on the stock exchange reached 2650 per day during the quarter, up 7 per cent on the same time last year.

Employee and related costs rose 16 per cent, mainly due to an increase in staff numbers.

There were no non-recurring costs associated with the collapse of Access Brokerage over the quarter.

The Serious Fraud Office has laid criminal charges against Access' managing director Peter Marshall. NZX has been served with legal proceedings by the Bank of New Zealand and Access liquidator Ferrier Hodgson about Access' collapse.

"NZX is insured in respect of this action and is defending this action and counterclaiming against the BNZ," the company said.

Shares in NZX last traded yesterday at a 12 month low of $6.85, having hit a year-high of $10.55 in March.

- NZPA