The Australian Securities Exchange (ASX) did well out of the 14.3% rise in the market in the six months to December and an upturn in new listings, reporting a 10.8% rise in net earnings yesterday and a slightly higher dividend.
The company revealed net earnings of $189.6 million for the half-year, on an 8% rise in revenues to $329.3 million which in turn was boosted by an 11% rise in new listing revenues.
The result was helped by improved global economic conditions and an uplift in the number of companies listing on the stock exchange.
Operating revenue was $329.3 million, up 8% on the previous corresponding period.
Earnings per share was 98.3c, up 2.2% on capital expanded by the half a billion dollar capital raising last year.
The company paid an interim dividend of 88.2c a share, fully franked. That was up 0.2% on the expanded capital.
Earnings before interest, tax, depreciation and amortisation jumped 8% to $252 million, which makes it among the most profitable companies in the country.
Based on that figure and revenue of $329 million, the ASX had a gross profit margin of 76%, which is around the margins enjoyed by iron ore giants such as BHP Billiton and Rio Tinto. By way of contrast, Telstra yesterday reported a gross profit margin of just over 41%.
That raises the question, are the ASX trading costs too high?
ASX 2Y – ASX has a fat, profitable year, thanks to new listings surge
ASX chief executive Elmer Funke Kupper said in a statement with the profit details that the company’s major business units increased their revenue year-on-year for the first time since the global financial crisis back in the 2008 financial year.
”We are determined to provide Australian investors with a domestic financial market infrastructure that is world-class, well-capitalised and competitive,” he said.
”In the first half we delivered a new service for the clearing of over-the-counter derivatives, and we appreciate the energy and support of our clients in developing this service.”
He said the ASX was participating in the Federal Government’s financial system inquiry and believed it was an ”important time for our financial markets”.
”We will be focused on the long-term health and future of Australia’s financial markets, ensuring that Australia can continue to be relevant and competitive in a rapidly changing global environment,” he said.
”It is less about the settings in Australia and more about the competitiveness of Australia.
"This will require a focus on the relative strengths of our financial system compared to those of other markets, and the development of a 10 year ‘game plan’ against which all policy and regulatory decisions can be tested.”
The ASX said there were 69 public offerings in the first six months of the current financial year, compared to 41 a year earlier.
This delivered an 11.3% boost in listing fee revenue of $66.8 million.
The company’s largest business – derivatives and over-the-counter markets – delivered revenue of $99.8 million, up nearly 6%.
However, the number of ASX daily average contracts traded fell 22.2%.
Last year, the ASX gained approval to launch a new clearing service for over-the-counter derivatives. In July, it completed a $553 million capital raising to back these operations.
”Our efforts are now directed towards building customer activity in all of our initiatives,” Mr Funke Kupper said. ASX shares rose 1.5% to $36.25.
Video – ASX 1H14 Results
