ASX Limited (ASX) SNAPSHOT
Profile: ASX (ASX) is Australia’s largest securities exchange. It offers a range of services, including listings, trading, clearing and settlement, across various asset classes. In addition, it provides market data services and investor education.
History: The Australian Stock Exchange Limited was established in 1987 following legislation which enabled the merger of six independent state-based stock exchanges. Each of the individual exchanges had histories dating back to the 19th century. In 2006, the Australian Stock Exchange merged with the Sydney Futures Exchange, operating under the name Australian Securities Exchange. From 2010 the exchange has been trading under the brand the ASX Group. ASX sold its 18.6% stake in IRESS (ASX:IRE) in February 2019 for a post-tax gain of c.$161m.
Earnings composition: In FY19, the Derivatives and OTC Markets segment generated $309m in operating revenues (36% of group), while the Listing and Issuer Services segment reported $220m (25%), Trading Services reported $230m (26%) and Equity Post-Trade Services reported $108m (13%).
Most recent result – 1H20: Net profit after tax (NPAT) increased 1.8% on the prior corresponding period (pcp) to $250m. Earnings before interest, tax, depreciation and amortisation (EBITDA) was up 6.6% on the pcp to $340.5m. Listings and issuer services revenue rose 2.2% to $114m, with a decline in new listings offset by improved secondary raisings, in particular from the banks, and the growth in exchange traded products with their total market value up 52% to $62bn. Derivatives and OTC Markets revenue increased 8.6% to $159m, with futures volumes up 9.9%. Trading Services revenue increased 10.2% on the pcp to $125m. Equity Post-Trade Services revenue was up 7.2% on the pcp to $59m. Interest and dividend income decreased 19.7% to $44m, due to the lower interest rate environment and ASX no longer receiving a dividend from IRESS following the sale of its stake in Feb. 2019. A $1.16 dividend was declared, up from $1.14 in the pcp.
Company outlook: ASX intends to replace its Clearing House Electronic Subregister System (CHESS) with a Distributed Ledger Technology (DLT) replacement, which has a target go-live date of April 2021. ASX expects expenses growth of c.6-8% in FY20, from c.$263m in FY19.
Important dates: Ex-dividend date is 5 March 2020 and the payment date is 25 March 2020. Full-year results are scheduled for 20 August 2020. AGM is scheduled for 30 September 2020.
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