NZX lifts first quarter sales 9.1% on fund management, offsetting derivatives drop

[NZX] lifted first quarter sales 9.1% as the stock market operator's expanded fund management business offset a drop in its derivatives and agriculture operations.

Revenue rose to $16.4 million in the three months ended March 31, from $15.1 million in the same period a year earlier, the Wellington-based company said. Its funds management delivered $1.75 million in extra income, of which the Superlife acquisition added $1.5 million.

NZX acquired fund manager Superlife this year for $20 million in cash and shares, with a potential further earnings payout of $15 million. The stock market operator wants to use SuperLife as a platform to accelerate growth of its Smartshares exchange traded funds and benefit from growth in the New Zealand funds management sector, which is expected to increase at an annual rate of 10-15% over the next 10 years, driven by KiwiSaver and increased household savings generally.

Income from its funds management soared 315% to $2.3 million in the first quarter, while capital markets revenue rose 3.7% in the first quarter to $8.6 million, driven by increased trading activity. Soft commodities income slipped 43% to $400,000 as revenue dropped from Clear Grain Exchange wiping out gains from the dairy derivatives.

Its agricultural revenue slid 12% to $2.6 million, due to lower advertising income, while market operations dropped 1.7% to $2.59 million.

NZX also released its first quarter regulation statistics, showing it received six complaints concerning listed issuers in the period, nearly half of the 11 it had in the corresponding period a year earlier. Enquiries concerning issuers rose 36% to 38, while investigations started by NZX regulation also rose 36% to 38. Investigations into issuers ongoing at the end of the quarter dropped to three, compared to eight a year earlier.

Enquiries concerning participants rose to 21 from nine in the same period a year earlier, matched by investigations into participants. Investigations into participants that were continuing at the end of the quarter was twice the year earlier at two.

Shares of NZX fell 0.9% to $1.17 and have gained 0.9% since the start of the year.

(BusinessDesk)