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JSE Ltd delivered strong financial results during 2013, resulting from an improvement in financial market sentiment and activity and tight cost control. Standout revenue performances were achieved by the Equity Market, Post-Trade Services and Market Data divisions.
“I’m particularly pleased with the progress we made towards achieving our five year plan of providing integrated trading and clearing across all of our five markets by 2017,” says JSE CEO Nicky Newton-King.
Financial Review
Net profit after tax for 2013 increased by 68% to a record high of R507 million (2012: R302 million). This follows strong operating revenue growth (up 14% to R1.58bn; 2012: R1.38bn) and a moderate increase in operating costs (up 5% to R1.08 billion; 2012: R1.03 billion).
Group earnings before interest and tax (EBIT) increased by 42% to R578 million (2012: R406 million). Earnings per share (EPS) and headline earnings per share (HEPS) are 592 cents (up 68%) and 645 cents (up 36%) respectively.
The pleasing business performance translated into strong cash flow with a net increase in cash of R250 million for 2013 (2012: R88 million). At year-end Group cash and cash equivalents stood at R1.38 billion (2012: R1.13 billion).
“As we run the Exchange, we continue to be very mindful of equitably balancing the interests of all stakeholders. In recognition of the Group’s performance, the JSE was able to both return an amount of R84 million (5% of Group Revenue) to Equity Market clients by way of a rebate in 2013 and declare an ordinary dividend for the year ended 2013 of 350 cents per ordinary share (2012: 250 cents) and a special dividend of 50 cents per share (2012: nil),” says Newton-King.
Operations
Issuer Regulation
- Revenue rose by 14% to R110 million (2012: R96 million).
- 12 new companies listed on the JSE (2012: 12). Listings activity in other JSE-listed equity instruments includes 3 new ETFs, ETNs (2012: 16).
- Total nominal listed bond value by year-end December 2013 was R1.8 trillion (2012: R1.6 trillion).
Equity Market
- Revenue rose by 17% to R385 million (2012: R319 million).
- The number of transactions year-on-year rose 45% and value traded by 16%.
Back-Office Services
- Revenue rose by 16% to R238 million (2012: R205 million).
- The JSE is likely to retain BDA until at least 2018.
Post Trade-Services
- Revenue rose by 18% to R249 million (2012: R212 million).
- Phase 1 of the move to T+3 was successfully implemented during 2013, with Phase 2 due in the second half of 2014 and Phase 3 due in 2015.
Bonds and Financial Derivatives
- Divisional revenue rose by 15% to R202 million (2012: R176 million).
- Equity Derivatives revenue rose by 17% to R132 million (2012: R112 million).
- Currency Derivatives revenue rose by 37% to R24 million (2012: R18 million).
- The Interest Rate market revenue rose by 1% to R46 million (2012: R45.7 million).
Commodity Derivatives Market
- Revenue declined by 13% to R49 million (2012: R56 million), largely owing to lower price volatility in the agricultural grains market.
Market Data
- Revenue rose by 20% to R177 million (2012: R147 million) owing to international growth in professional indices users as well as algorithmic players and hedge funds subscribing to JSE data.
2014 priorities
The JSE priorities for 2014 include:
- Launching Phase 1 of the colocation facility to host client trading systems
- Implementing Phase 2 of the move to T+3
- Progressing the move towards an integrated trading and clearing system. This will result in both the move of all trading onto the technology currently used for the Equity Market and the introduction of a new clearing technology for all markets
- Progressing the development of an electronic trading platform for the SA Government bond market with National Treasury and other market participants
Appreciation
“As we tackle 2014, I would like to pay tribute to the enormous contribution to the evolution of the JSE made by our Chairman, Humphrey Borkum, who retires this year after five decades in the industry and after 11 years as the JSE’s Chairman. The impact of Humphrey’s wise counsel, always well informed and always quietly offered has had a major impact on the architecture of the JSE we know today,” concludes Nicky Newton King. “As we say good bye to Humphrey, we welcome Nonkululeko Nyembezi-Heita who joined the Board in 2009 after the Group's acquisition of the Bond Exchange of SA and who will assume the Chairmanship of the JSE after our AGM on 8 May 2014.”
