ASX announcement - ASX Consolidated Financial Results and Dividend Announcement for the half year to 31 December 1998

2 March 1999

Australian Stock Exchange Limited (ASX) today reported a pre-abnormal operating profit after tax of $16.4 million for the half year to 31 December 1998.

This was consistent with the statement made to the market in November that profit would be about double that implied in ASX’s Information Memorandum, prepared before ASX listed in October last year.

The half-year result, ASX’s first as a listed company, reflected enhanced revenue in all major sectors of the ASX business as a result of the strong and active market.

"Record trading volumes and the buoyant market were the key factors behind this result," ASX Managing Director, Richard Humphry, said. "At the same time, we saw the successful results of our efforts to cut costs.

"Trading volumes can vary widely, but the 3.6 million equities trades in the half year were 19 per cent higher than those projected, pro rata, in the Information Memorandum.

"A high proportion of our operating costs are fixed. The record trading volumes we’ve seen in the past few months mean higher revenue that largely translates to profit."

Directors have declared a fully franked interim dividend of 15.5c per share, representing 64 per cent of operating profit before tax and abnormals, consistent with the policy foreshadowed in the Information Memorandum.

ASX’s total revenue was $72.2 million, which was $8.1 million higher than for the same period last year.

Operating expenses of $52.7 million were $0.5 million below the same period last year, reflecting costs savings in most areas of activity.

The high level of taxable income led to $8.1 million in future income tax benefits (FITB) being brought to account as an abnormal gain. Dealing with Y2K computer issues accounted for a significant portion of abnormal expenses of $4.3 million.

The Outlook
"ASX revenue tends to be cyclical and dependent on trading volumes and market dynamics," Mr Humphry said, "and there is no guarantee the current conditions will continue. But if the market activity levels which we have experienced in January and February of 1999 continue, the second half profit is likely to be even higher than in the first half."

"Of importance is the proposal to merge the Sydney Futures Exchange into ASX."

"Discussions with SFE are progressing well, but remains subject to key transactional and operational terms, regulatory approvals and the endorsement of three classes of SFE members.

"Should the merger eventually proceed, we are confident it will bring efficiencies to the operations of our capital markets in an increasingly competitive environment," Mr Humphry said.

The half yearly results are available for download. 

Analyst Briefing Presentation of the ASX Consolidated Financial Results and Dividend Announcement for the half year ended 31 December 1998. pdf 93K*

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