SYDNEY: Australia Securities Exchange (ASX Limited) has posted strong earnings growth for the half-year ended December 31, 2019 as the operating revenues surged 7.1% to $454.9 million and net profit after tax clocked in at $250.4 million, up 1.8%.
Core activity plus strategic initiatives drove higher shareholder returns – interim dividend up 1.7% to 116.4 cents per share, while ongoing investment in operational infrastructure and risk management would strengthen foundations, support future growth and ensure long-term sustainability.
Dominic Stevens, ASX Managing Director and CEO: “ASX has achieved a solid result for the first half of the 2020 financial year, with earnings before interest and tax up 6% to $315.1 million – a rise of $17.7 million – and statutory profit of $250.4 million, up 1.8% – or $4.3 million – compared to the same period last year.
“The result lifted revenue to $454.9 million, a rise of 7.1%, reflecting growth from strong market activity and our core businesses. This contrasted to a decline in interest and dividend income mainly due to the lower interest rate environment and sale of our stake in IRESS. ASX continues to benefit from its diverse business model, which can weather changing market conditions. The result allowed ASX to increase returns to shareholders, with our interim dividend rising 1.7% to 116.4 cents per share.
“The key performances drivers of the result were a 9% rise in the number of daily average futures contracts traded, particularly in 30-day futures; an increase of 8% in cash market trading, with a daily average value across the period of $4.9 billion; and demand for more technical and information services within the expanding ecosystem of our Australian Liquidity Centre (ALC).
“ASX’s overall total expenses rose 9.8%, in line with expectations, and our capex guidance is unchanged at approximately $75-$80 million for the full-year. We are investing in the long-term sustainability of our business by strengthening our technology, risk and governance foundations, and upgrading our operating and service capabilities to support growth opportunities.
“Our project to replace CHESS with a solution powered by distributed ledger technology remains on track to open the industry-wide test environment in July 2020. Our Sympli joint venture is also progressing, completing its first four-party e-settlement property transaction with ANZ Bank in December 2019.
“ASX announced the creation of the S&P/ASX All Technology Index, to be launched later this month. This will enhance the profile and understanding of the tech sector in Australia, and increase opportunities for investors. We also finalised a package of refreshed listing rules and guidance, which help improve company disclosures to the market, make the rules easier to understand and comply with, and enable ASX to better monitor and enforce compliance. This coincided with stage one of improved straight-through processing for the notification of corporate actions and issuance. The changes highlight our commitment to market quality and to ensure the rules and processes keep evolving to serve the interests of issuers, investors and the Australian economy.”