FundConnect pushes ASX profit down
TheAustralian Stock Exchange(ASX) has announced a profit of $57.8 million for the year ending June 30 2003, slightly down on last year’s profit of $59.1 million, following the one-off write-down of $3.5 million for the aborted ASX FundConnect hub project.
The ASX achieved its profit on the back of reported record operating revenue of $206.8 million, plus interest and dividend revenue of $8.0 million, up from $5.3 million with $1.5 million in dividends from ASX’s investment inIress Market Technology.
While recurring operating expenses almost matched those for the previous year, up 0.2 per cent to $127.3 million, an additional $5.05 million related to the winding up of FundConnect pushed operating expenses to $132.4 million.
The ASX pulled out of the FundConnect project for the development of a managed funds transaction hub in May, at the time saying that the return on investment was uncertain and it was unwilling to take the risk.
ASX deputy managing director Angus Richards said that the time taken for any hub to reach critical mass was a major concern, especially with three other players -IWL, Ausmaq and Investmentlink - in the market.
ASX Perpetual Registrars, while winning new mandates from several additional clients during the year and producing a 42 per cent increase in earnings before interest, tax, depreciation and amortisation to $12.1 million, it only contributed $0.9 million compared with $2.0 million for the previous year. This drop was attributed to depreciation and amortisation of new technology systems and goodwill charges.
On the results, ASX managing director and chief executive Richard Humphry said while 2002/03 was an extremely difficult year for financial markets, the results were “pleasing” and record activity levels in equities for July and August to date was a demonstration of renewed investor confidence.
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