NZX 3rd-qtr revenue bolstered by expanding funds management division

Monday 29th October 2018

NZX's third-quarter sales rose 3.8 percent as its funds management division made up for lacklustre performances in its core operations.

Revenue from continuing operations lifted to $17.3 million in the three months ended Sept. 30, from $16.6 million a year earlier, as funds management revenue climbed 25 percent to $4.1 million.

NZX expanded its funds management business under the leadership of Tim Bennett, buying SuperLife in 2014. The funds management unit hit its targets, meaning NZX paid the full $35 million. The following year it paid $1.5 million for Apteryx, renamed to NZX Wealth Technologies, which didn't meet its earnout targets.

The division helped make up for shrinking revenue in its core market operations. Issuer relationships revenue - the biggest income generator - fell 3.9 percent to $5.8 million as annual listing fees declined 4.9 percent to $2.5 million and contractual revenue slipped 2.7 percent to $2.2 million.

Secondary markets revenue, meanwhile, rose 4.4 percent to $4.4 million, with sales from dairy derivatives up 52 percent to $438,000. Both securities trading and securities clearing revenue dipped. Total data and insights revenue was down 1.6 percent to $2.7 million.

Including discontinued operations, revenue fell 3.8 percent to $17.8 million. The discontinued operations include divested agri-businesses, such as Farmer's Weekly, sold on July 1, and AgriHI and Australian Grain Information Unit, sold Aug 31.

NZX's year-to-date revenue slipped 0.1 percent to $55 million.

The stock market operator is doubling down on its core markets business, with a particular focus on improving liquidity on the local market. Among other things, it is overhauling its price structure, bringing its trading and clearing model into line with global practice. A pilot using a tailored pricing structure that started in July has been successful in lifting on-market trading.

The stock last traded at $1.03 and has fallen 6.8 percent so far this year.

(BusinessDesk)

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