The Australian sharemarket may be at or around all-time highs and risen to those levels during the year to June, but that hasn’t translated to higher earnings or a higher dividend for shareholders for the ASX.
ASX Ltd announced on Thursday that the trim to shareholder returns was as a result of rising costs and lower interest income.
The ASX will pay shareholders a final dividend of 111.2 cents a share, down 9.2% from 2019-20.
This took the full-year payment to 223.6 cents per share – a fall of 6.4% from the previous year.
The contrast between the performance of the ASX and many of the company listed on the exchange is quite ironic.
Many of the companies – from BHP, to Rio Tinto, to the Commonwealth Bank, to Coles, to Beacon Lighting and a host of others have survived Covid, the lockdowns and reported record earnings, record revenues and higher dividends and quite a few buybacks (a sign of confidence by boards and managements).
It would seem that while the ASX-200, the country’s top listed companies, has enjoyed heady times and bubbling profits and returns, the ASX itself has struggled, although the result still saw the exchange among one of the most profitable companies.
The ASX reported statutory profit eased 3.6% lower to $480.9 million for the year to June 30, thanks to record low interest rates. But this was better than market forecasts for a profit around $474 million.
The ASX reported an 8.4% rise in total expenses to $310.3 million over the year as the company continues to struggle with its overdue technology overhaul.
The ASX was busy though – 176 new listings and raised $102.5 billion. That saw revenue edge up 1.4% to $951.5 million for the year to June.
“Strong listings and equity market activity, due in part to an ongoing surge in retail trading, were tempered by the effects of the RBA’s current policy settings on both short-end futures volumes and interest income,” CEO Dominic Mr Stevens said in Thursday’s release.
The ASX is currently undergoing a major upgrade of its technology, dubbed the CHESS replacement, which Mr Stevens said was on track to go live in April 2023.
The original timetable had 2021 and then 2022 as the start dates for the upgrade, planning of which started in 2016!
“We continue to progress ASX’s once-in-a-generation technology transformation, which will help us make business easier for our customers and underpin ASX’s long-term sustainability.”
The ASX suffered a full-day outage in November, 2020 which triggered an investigation by the corporate watchdog and the Reserve Bank which has conveyed its unhappiness with the failure and the delays to the technology upgrade.
