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NZX to cancel shares, return up to $35M

Monday 20th February 2012

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NZX, the stock market operator, plans to return as much as $35 million to shareholders via a one-in-10 share cancellation after reporting a 56 percent increase in full-year profit.

The $32.5 million-to-$35 million compulsory share cancellation will be followed by a share split of four new shares for every three existing shares held, the Wellington-based company said. Analysts had expected NZX to return capital after getting the proceeds of its TZ1 registry sale.

Profit rose to $14.5 million, or 11.84 cents a share in the 12 months ended Dec. 31, from $9.3 million, or 7.5 cents, a year earlier, NZX said in a statement. Sales rose 11 percent to $55.6 million, outpacing a 4 percent increase in operating expenses.

NZX shares rose 4.3 percent to $2.70 and have gained 15 percent this year. They are rated ‘outperform’ based on the consensus of three analyst recommendations compiled by Reuters. The capital return requires High Court and shareholder approval will result in a payment of $2.70 to $2.90 for each cancelled share.

The results are the last for chief executive Mark Weldon, who has resigned and plans to step down in the first half, with Singapore-based business consultant Tim Bennett named to replace him effective May. 7.

“The second half of 2011 in particular saw strong momentum across the business, which is flowing through into the first quarter of 2012, Weldon said. “The focus on cost management will continue, with cost growth expected to be maintained at similar levels to those held in 2011.”

Of the NZX’s three main units, markets had a 16 percent increase in sales to $22 million, information climbed 2 percent to $20.95 million and infrastructure and technology services gained 17 percent to $12.6 million.

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