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Relative to the comparable three-month period last year, NZX’s total revenue increased 32.1% to $4.462 million (excluding interest). EBITDA for the three-month period reached $1.122 million, a decrease of 3.3%. This decrease is attributable to expense items discussed below.
In the core exchange business areas NZX enjoyed strong performance compared with the third quarter 2003. Listing revenues increased 37.5% to $1.606 million, driven by an active listing market and price increases introduced on 1 July 2004. Transaction revenue was up 14.8% to $1.182 million. Revenue from market information grew 17.1% to $670,000. A copy of our Quarterly Operating Metrics is available at www.nzx.com/aboutus/investor/metrics.
Staff-related costs increased 38.2% to reach $1.242 million for the quarter. NZX now has 59 full time staff compared with 41 at the end of the third quarter in 2003, due mainly to the NZX regulatory function being brought in-house, and recruitment of staff to manage new initiatives.
There are two significant non-recurring expense items to report:
NZX has accrued expenses relating to the company’s response to the collapse of Access Brokerage Limited totalling $185,000. This number includes the cost of professional advisors employed during the September period and does not include the significant resource dedicated by NZX staff and management. NZX expects to spend a similar amount in Q4. Additionally, the NZX Fidelity Fund of $446,000 has been made available to affected clients. The fund is identified as an asset (cash) and a liability on the NZX balance sheet. Its application to this event will not effect a change in profitability.
Secondly, NZX’s subsidiary, NZX Funds Management Limited, had an active quarter that included two acquisitions, the launch of the Smartshares brand, and the successful MOZY IPO. NZX incurred non-recurring costs related to these activities of $582,000, all of which were expensed in this quarter. These costs consist primarily of marketing and brokerage expenses. NZX group results consolidate the activities of NZX Funds Management Limited. Consolidated accounts were first reported for the period ending 31 December 2003.
NZX has also commenced amortising the investment made to launch futures and options products with effect from September 2004.
NZX will hold a conference call to answer any additional questions. This call is scheduled for Wednesday, 27 October at 9.00am. In order to help with information flow, NZX requests questions be submitted in advance if possible. To submit questions and obtain call-in details, please contact Rowan Macrae via email (rowan.macrae@nzx.com).
Full financials can be found on the NZX website at www.nzx.com/aboutus/investor/financial.
Key Financial Information for the Quarter:
- Revenue of $4,986k
- Listing revenue $1,606k
- Trading, clearing & settlement revenue $1,182k
- Market Information revenue $670k
- Regulation Fees $406k
- Participant Fees $174k
- Interest Income $524k
- Expenditure of $3,505k
- Staff and related costs $1,242k
- Information Technology $387k
- Net earnings after tax of $990k
- EBITDA of $1,122k
