NZX boosts third quarter sales 13%

[NZX], the stock exchange operator, lifted revenue 13% in the third quarter, as its recently acquired fund management business, SuperLife, boosted income.

Sales rose to $18.6 million in the three months ended September 30 from $16.5 million in the same period a year earlier, the Wellington-based company said in a statement. Of that, revenue from its funds management business surged 249% to $2.4 million. Year-to-date NZX's revenue is up 11% to $53 million in the nine months ended September 30.

The SuperLife acquisition added $1.27 billion of funds under management and 41,000 members to the stock market operator and was prompted by NZX's plans to launch a series of domestic and international, debt and equity exchange traded funds over the next 12 months. NZX rolled the SuperLife business into its $400 million Smartshares unit.

NZX's capital markets business, its main source of income, increased revenue 9.9% to $10.4 million. There were no initial public offerings during the quarter, but secondary capital raisings were up some 958%, largely due to capital raising by the dual-listed Australian banks. Listing fees grew 5.7% to $3.5 million.

Its soft commodities business, which includes dairy derivatives trading, reported a 163% increase to $353,000. Dairy derivatives had a record 35,761 lots traded, a 125% increase in volume.

NZX's agricultural information business reported a 5.5% decline in revenue to $2.9 million, as advertising sales fell.

Market operations, which includes its contract with the Electricity Authority, declined 19.2% to $2.6 million, as it renegotiated the electricity contract. Today NZX announced it had re-signed the authority for another eight years, which will be worth $41 million.

The company said costs for its long-running dispute with the former owners of the Clear Grain Exchange, Ralec, had increased and it now expected legal spending would be between $2.5 million and $3 million this year, up from the $2 million chief executive Tim Bennett forecast in August, and earlier guidance of $1 million. NZX claims Ralec's forecasts were misleading when the stock market operator purchased the grain exchange in 2009 for A$6.9 million upfront and potential earn-outs of A$7 million.

NZX shares last traded at 96c and have fallen some 15% over the past 12 months.

(BusinessDesk)