Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Learn
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

Trump-led trading spike benefits ASX 1H17 result

Glenn Freeman  |  17 Feb 2017Text size  Decrease  Increase  |  

Page 1 of 1

ASX Limited (ASX: ASX) has reported a $219-million net profit after tax for the first half of fiscal 2017, 3 per cent higher than the corresponding period last year.

Group revenue for the market operator grew 2.8 per cent to $386 million in the six months to 31 December 2016, from $376 million a year earlier.

Shareholders will receive a dividend of $1.02 per share, fully franked.

Dominic Stevens, who replaced Elmer Funke Kupper as CEO in August 2016, said the result was "underpinned by healthy levels of cash market and derivatives trading activity, stimulated in part by market reaction to the US presidential election".

"The dip in revenue from our listings business reflects the comparison with last year's strong level of secondary capital raisings. While the total amount of capital raised was down for the half year, the number of new listings was up from 77 to 86."

The positive result of the wide-moat company was only slightly below expectations, with Morningstar senior equity analyst Gareth James having anticipated mid-single-digit growth in earnings per share (EPS). ASX's EPS of 113 cents for the half was 2.9 per cent higher than the previous corresponding period.

"We don't explicitly forecast interim results, but ASX's earnings are usually split reasonably equally between the first and second halves. At just under 3 per cent, it's a bit below what we had expected, but we anticipate the second half will be slightly better," said James, while also indicating the result sees no meaningful change to Morningstar's longer-term earnings forecast.

ASX management highlighted the success of several ongoing strategic initiatives in the half year. These include stakeholder engagement ahead of its planned replacement of the CHESS clearing house system, development of distributed ledger technology, and a new futures trading platform due to launch next month.

Its derivatives clearing business, which contributes the highest proportion (30 per cent) of group revenue, saw an almost 5 per cent uplift to $133 million, with higher volumes from futures and over-the-counter trading.

The company's listings division--it's second-largest business (25 per cent of group revenue)--declined by 2 per cent to $103 million. Management attributed this to lower secondary listing fees during the half relative to the same period in fiscal 2016, during which the four major Australian banks undertook record levels of capital raisings.

More from Morningstar

South32 posts solid $620m net profit for 1H17

ANZ delivers 31pc lift in 1Q17 cash profit

 

Glenn Freeman is Morningstar's senior editor.

© 2017 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.