Shares in NZX plunged 11 per cent after the stock exchange operator flagged a drop in first-half earnings amid tepid trading values and rising costs from its Clear Grain Exchange litigation and to cover the costs of installing a new chief executive.
The stock sank to a three-month low $1.17 after reporting its earnings before interest, tax, depreciation, amortisation, and fair value movements were between $9 million and $10 million in the six months ended June 30. That's smaller than the ebitdaf of $11.7 million in the same period last year. Net profit was between $3 million and $4 million, compared to $4.5 million in 2011.
"We were expecting a little better from the NZX, and this caught the market by surprise," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "The stock's been one of the best performers in 2011 and 2012 to date"
The stock exchange operator's expenses were between $2 million and $3 million higher than last year, with about two-thirds arising from the CEO transition, the Clear litigation and other non-recurring items, NZX said.
NZX's outlook for the next six months "combines a traditionally stronger second-half for NZX's businesses with some significant market developments against the backdrop of a challenging global economic environment," the company said. "The medium-term outlook for the business remains strong."
