23 Feb 2024

NZX share trading lowest in 9 years

2:28 pm on 23 February 2024
NZX sign

NZX sign Photo: RNZ / Angus Dreaver

Stock market operator NZX reported a slight drop in profit as it wrote down the costs of assets, saw higher funding costs, and as share trading was the lowest in nine years.

Key numbers for the 12 months ended December compared with a year ago:

  • Net profit $13.6m vs $14.2m
  • Revenue $108.4m vs $95.7m
  • Operating earnings $40.1m vs $36.6m
  • Final dividend 3.1 cents per share

Chief executive Mark Peterson said the trading environment was subdued.

"The key determinant of changing this is the market believing that inflation is under control and more generally a stronger economic outlook for New Zealand is on the cards," he said.

Peterson was confident that as conditions improved, "cash sitting on the sidelines" would be invested in equities.

He said about half of the 61 World Federation of Exchange members saw traded value fall by 15 percent or more in 2023.

NZX's revenue rose by $12.7 million, driven by incremental revenue from its fund management business Smarshares' acquisition of QuayStreet Asset Management, Smartshares' fund growth, and growth of its data and dairy market businesses.

Profit fell 4.3 percent, which it said was largely due to additional amortisation and funding costs.

"The higher amortisation charge largely represents the cost of several years of growth capital investment in NZX Wealth Technologies, an investment from which NZX is now seeing gains through significant new client wins that will be progressively onboarded to the platform in 2024," it said.

Operating expenses increased $9.2m to $68.3m, driven by integrating Smartshares acquisitions, inflation pressures and higher compliance costs.

NZX forecast full year 2024 operating earnings to be in the range of $40m to $44.5m, compared to $40.1m in 2023.