By Jenny Ruth
Friday 25th March 2011
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NZX's net profit of $11.3 million for calendar 2010 before asset gains and losses was $0.8 million above his forecast, says Guy Hallwright, an analyst at Forsyth Barr.
"Fourth quarter revenues were higher than we expected from listings, post-trade services, boosted by the new clearing house, and agri information and trading," Hallwright says.
"There has been a pick-up in revenues in NZX's core financial markets business in the last two quarter, after a long flat period since the GFC (global financial crisis), due to the new clearing house, higher initial and secondary listing revenues in the fourth quarter and increases in annual listing fees."
After NZX released details of its revenue and cost expectations, Hallwright raised his 2011 net profit forecast by 18% to $17.6 million and his 2012 forecast by 12% to $19.2 million.
He has also raised his valuation by 40 cents to $2.57 per share.
"NZX's revenue mix has shifted towards lower-volatility sources: annual listing and participant fees, energy contracts, publication and data subscriptions and fund management fees," Hallwright says.
"There is significant upside potential from NZX's expansion into agriculture, energy, commodities and derivatives which should be reflected in NZX's share price as visibility on revenue and earnings growth improves," he says.
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