Listings underpin 8% rise in NZX's earnings

Tim Bennett.
Tim Bennett.
Stock exchange operator NZX Ltd has reported a more than 8% increase in earnings, underpinned by a flurry of company listings, and has hinted more listings are yet to be announced.

For its half year to June, NZX yesterday posted total revenues up 2.8% to $31.2 million and after-tax profit up 8.3% to $7 million.

During the half year, $3.52 billion of new capital was listed, down on the same period last year, but that had included Mighty River Power's listing.

NZX chief executive Tim Bennett said the NZX's capital market had continued its ''positive growth'', with seven initial public offerings (IPOs) so far this year and more in the pipeline.

NZX shares were up 1c at $1.28 after the announcement.

Craigs Investment Partners broker Peter McIntyre said the result was ''largely in line'' with Craigs' expectations.

Revenue growth from stronger capital-markets activity and a recovery in the agricultural business was largely offset by the cost of more NZX staff during 2013.

While NZX saw a good pipeline of IPO work and additional energy-contracting work as likely to drive second-half revenue, Mr McIntyre also noted its caution over full-year 2015 agri-revenues, due to the recent global dairy price dips.

Forsyth Barr broker Andrew Rooney also said the result was in line with expectations, although the profit was slightly down on expectations of $7.1 million.

He said the outlook commentary was positive, with no slowing in the IPO pipeline and growth expectations from the Funds Management business, potentially by acquisitive means.

''The key risk to earnings post-2016 remains the rolling-off and re-tendering of the Electricity Authority energy market contract, albeit increased energy consulting activity through the second half of 2014 is expected,'' Mr Rooney said.

IPO activity on the NZX during the six months included Genesis Energy, Inturei Education Group, Serco and Gentrack, and second-half listings by IkeGPS, Scales Corp and Metro Performance Glass, Mr Bennett said.

He noted Vista Group listed yesterday and ERoad, Pushpay and Lateral Corp were scheduled for compliance listings during the next two weeks.

As well as listing fees, Mr Bennett said they would also provide recurring annual listing, trading and clearing revenue.

''It's worth noting that listings have a broader benefit for New Zealand's capital markets, providing KiwiSaver funds with businesses to invest in, bringing new investors to the market, and continuing to generate interest in saving and investing,'' he said.

Mr Bennett said the NZX's development of a new ''growth market'', for small and mid-sized businesses, was ''progressing well''.

He estimated it would be launched during the fourth quarter this year.

simon.hartley@odt.co.nz

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