NZX revamp leads to 40pc rise in profit

NZX chief executive Mark Weldon's "reshaping" of the market operator continued to pay off during the March quarter, with the company lifting net profit by 40 per cent, even as its core sharemarket plumbed five-year lows.

With two of the company's excursions into broader market businesses paying off handsomely, NZX yesterday also said it would go live with its new clearing and settlement platform in November which may provide similarly rewarding business opportunities in emissions and commodities futures trading.

Chief executive Mark Weldon said the result demonstrated the success of NZX's three-pronged strategy to strengthen its core markets business, cement a "broader integrated base from which to grow and generate strong operating leverage" and to "proactively reshape the NZX business".

NZX's net profit for the three months to March 31 was $3.04 million, up 40 per cent on the same period a year ago.

While operating revenue rose 7 per cent to $8.59 million, operating expenditure was held steady at $4.31 million which took operating earnings to $4.28 million, a 16.6 per cent increase.

Revenue from the company's core markets business was up 5 per cent at $7.67 million, with revenue from information businesses rising 39 per cent to $3.89 million even as listing revenue fell 17 per cent to $1.78 million and trading, clearing and settlement revenue fell 15 per cent to $905,000.

During the quarter, the benchmark NZX-50 index fell to its lowest point in five years and the market's capitalisation as a proportion of gross domestic product also shrank to multi-year lows.

But the credit crisis has curtailed the availability of bank credit to corporates which have turned to retail and institutional investors via NZDX listed debt issue. Debt raised in the first quarter was up 87 per cent on 2008.

The company is exiting its TZ1 carbon credit registry business and its stake in South African debt market operator BESA.

The company confirmed the sale price of its TZ1 business at $66 million.

NZX also announced it expected to go live with its new clearing and settlement system on November 20 this year.

The system may provide a platform for trading carbon credits should the Government choose to adopt an emissions trading scheme.

NZX shares closed up 15c at $6.75 yesterday.