Australia’s stock exchange, ASX Ltd (ASX: ASX), delivered its FY19 result yesterday.
ASX is one of the world’s larger financial market exchanges. It has over 150 years of exchange experience with 530 staff. There are 6.7 million share owners, 180 market participants and around 2,200 listed companies and issuers. There’s a total market capitalisation of $1.5 trillion on the ASX, and it has a $47 trillion interest rate derivatives market, making it the largest in Asia and among the biggest in the world.
ASX’s Solid FY19 Result
ASX reported that its operating revenue increased by 5% to $863.8 million. The company said there was a rise in Listings and Issuer Services, supported by higher initial capital raisings.
In the other divisions, there was stronger Derivatives and OTC Markets due to more futures trading and OTC clearing activity.
There was growth in Trading Services from higher usage of Auctions, Centre Point and technical services at the Australian Liquidity Centre (ALC). Finally there was a lift in Equity Post-Trade services reflecting the higher cleared values flowing from higher cash market trading activity.
Another important source of income is the interest and dividends received, which rose by 25.7% to $103.9 million.
ASX achieved a 3.5% increase in its EBITDA (click here to learn what EBITDA means). Net profit after tax rose came in at $492 million, which was an increase of 5.7% from FY18’s underlying profit and a 10.5% rise from FY18’s statutory profit.
ASX Dividend
The ASX Board decided to increase the final dividend by 4.8% to 114.3 cents per share, bringing the total FY19 dividend to 228.7 cents per share – an increase of 5.7%.
ASX has also declared a special dividend of 129.1 cents per share from the proceeds of the sale of its stake of Iress Ltd (ASX: IRE).
Is ASX A Buy?
ASX is attracting more technology and foreign company listings, providing sector and geographic diversity for investors. It has also launched a new data analytics platform to improve customer access to data and analytics.
Sympli, the property e-conveyancing settlement service, is targeted to go live by the end of the 2019 calendar year.
The ASX is doing what it needs do to go profitably, but at 33 times the 2019 financial year earnings I think it’s too expensive to buy for a potential market beating return. For reliable returns I’d rather invest in the businesses in the free report below.
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