ASX Full Year Result: A lift in volatility helps boost ASX Limited’s bottom line

CommSec

ASX Limited (ASX) the operator of Australia's primary national securities exchanges reported FY17 numbers today. Underlying earnings for the year were slightly higher, boosted by greater trading volumes on the back of a lift in volatility and strong futures trading volumes. The ASX marked the 30th anniversary of its formation and made strong progress on key initiatives. Some key initiatives included Centre Point that helped bring in $107 million over the year, OTC Clearing improvements and the new futures trading platform which went live in March 2017.

 Revenue lifted by 2.4% to $764.1 million and profit after tax rose 1.9% to $434.1 million. Expenses rose 6.0% to $180.9 million and capital expenditure was $50.3 million, both in line with market guidance.

 The ASX listings and issuer services unit revenue was largely unchanged at $192.7 million. It had 39 offshore companies added to listings over the year bringing the total number of ASX foreign listings to 266, with a large increase in technology listings. There were 152 new listings over the course of the year, 28 more than in the previous year although they tended to be smaller than in recent years. Secondary capital raisings increase helped lift its annual revenue 3.1% to $46.5 million.

 Trading services revenue came in at $196 million, lifting 7.2% while derivatives and over-the-counter markets revenue was 1.2% higher at $269.1 million. Cash Market Trading increased by 13.8% to $46.3 million and the ASX’s Information Services revenue increased 3.0% to $82.5 million, boosted by revenue from the BBSW interest rate benchmark which ASX commenced providing in January 2017.

 The ASX said it has made headways into its plans to find a replacement solution for CHESS with distributed ledger technology (DLT) seen as a good potential solution with an expected update due in December 2017.

 The ASX said it has seen a solid start to FY18 with trading activity levels up in the first 6 weeks, but global uncertainty remains the underlying theme with pockets of volatility expected over the next 12 months.

 The ASX will pay out a $0.998 dividend for the second half of 2017 on 28 September 2017, and the payout ratio of 90% of underlying profit after tax has been maintained.

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