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The Johannesburg Stock Exchange (JSE), the continent’s largest stock exchange, delivered a strong performance in the six months ended 30 June 2015 with robust growth across all product lines within the business. Group earnings after tax for 2015 increased by 29% to R430 million (2014: R333 million), with operating revenue growing by 16% to R1 billion (2014: R869 million).
“We began 2015 in full force and have had a good first half of the year. This follows the significant investment we have made in our people and technology which enable the JSE to offer clients the world-class services which they are clearly using more and more. Our fee restructuring, rebates and reductions over the past few years have also made it cheaper for our clients to trade. The growth in activity has enabled us to announce a Q2 2015 rebate in Back-Office Services (Broker Dealing Accounting) and a significant reduction in BDA fees related to transactions, from 31 August 2015,” says Nicky Newton-King, CEO of the JSE.
“We continue to make good progress on a range of our strategic initiatives which will strengthen the business, particularly in its Derivatives, Market Data and Post-Trade Services divisions,” continues Newton-King.
New organic revenue contributed R12 million. The growth came from colocation, which was launched in H1 2014 and allows clients to place their trading equipment near the JSE for fast access to JSE markets, as well as Issuer Services and Market Data. About 22% of total market value traded during the period went through the JSE’s colocation facility, with room for future growth.
The Group's total operating expenses increased by 12% (2014: 4%) to R567 million (2014: R508 million).
Group earnings before interest and tax (EBIT) are up by 28% to R484 million (2014: R380 million). Earnings per share (EPS) increased by 29% to 503.9c (2014: 389.4c) and headline earnings per share (HEPS) increased by 25% to 490.3c (2014: 391.2c).
The Group cash balance has declined by R81 million since December 2014 to R1.5 billion as a result of paying dividends of R417 million (2014: R347 million) and the repayment of borrowings of R14 million, which results in the Group no longer carrying debt.
Prospects
“In an increasingly complex and vibrant landscape, our strategic vision focuses on strengthening the foundational elements of our business (people, technology and regulation), diversifying revenues (particularly in the Derivatives, Market Data and Post-Trade Services areas), and driving enhanced capital and cost efficiencies so that we are able to offer our clients products, services and technology they want at competitive prices. Progressing the move of the Equity Market to T+3 and the development of integrated trading and clearing (ITaC) are our top priorities in 2015 and a substantial portion of our corporate energy is dedicated to driving these initiatives according to their respective project plans,” concludes Newton-King.
