NZX boosts 3Q sales 13% as SuperLife purchase pays off

Friday 30th October 2015

NZX, the stock exchange operator, lifted revenue 13 percent in the third quarter, as its recently acquired fund management business, SuperLife boosted income.

Sales rose to $18.6 million in the three months ended Sept. 30 from $16.5 million in the same period a year earlier, the Wellington-based company said in a statement. Of that, revenue from its funds management business surged 249 percent to $2.4 million. Year-to-date NZX's revenue is up 11 percent to $53 million in the nine months ended Sept. 30.

The SuperLife acquisition added $1.27 billion of funds under management and 41,000 members to the stock market operator and was prompted by NZX's plans to launch a series of domestic and international, debt and equity exchange traded funds over the next 12 months. NZX rolled the SuperLife business into its $400 million Smartshares unit.

NZX's capital markets business, its main source of income, increased revenue 9.9 percent to $10.4 million. There were no initial public offerings during the quarter, but secondary capital raisings were up some 958 percent, largely due to capital raising by the dual-listed Australian banks. Listing fees grew 5.7 percent to $3.5 million.

Its soft commodities business, which includes dairy derivatives trading, reported a 163 percent increase to $353,000. Dairy derivatives had a record 35,761 lots traded, a 125 percent increase in volume.

NZX's agricultural information business reported a 5.5 percent decline in revenue to $2.9 million, as advertising sales fell.

Market operations, which includes its contract with the Electricity Authority, declined 19.2 percent to $2.6 million, as it renegotiated the electricity contract. Today NZX announced it had re-signed the authority for another eight years, which will be worth $41 million.

The company said costs for its long-running dispute with the former owners of the Clear Grain Exchange, Ralec, had increased and it now expected legal spending would be between $2.5 million and $3 million this year, up from the $2 million chief executive Tim Bennett forecast in August, and earlier guidance of $1 million. NZX claims Ralec’s forecasts were misleading when the stock market operator purchased the grain exchange in 2009 for A$6.9 million upfront and potential earn-outs of A$7 million.

NZX shares last traded at 96 cents and have fallen some 15 percent over the past 12 months.

BusinessDesk.co.nz

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