The ASX’s underlying net profit after tax (NPAT) decreased by 3.4 per cent to $472.2 million for the financial year ending 30 June, driven by higher operating expenses but partially offset by increased operating revenue and net interest income.
In a note on Friday, the ASX reported a 49.4 per cent surge in statutory NPAT to $474.2 million, bolstered by the derecognition charge from the CHESS Replacement project in the prior corresponding period.
Moreover, the ASX reported a record operating revenue of $1.03 billion, up 2.4 per cent, driven by growth in its markets and technology and data businesses, achieved despite “challenging market conditions”.
“As we move into the second year of our five-year strategy, I’m pleased that ASX continues to demonstrate resilient financial performance, which was achieved amid challenging market conditions and during a period of transformation for the group,” ASX managing director Helen Lofthouse said.
Performance across ASX’s four lines of business was “mixed”, according to the group.
Markets revenue rose by 7.9 per cent to $315.4 million, while technology and data revenue increased by 5.9 per cent to $255.1 million, driven by higher equities and futures market data distribution and growth in customer connections at the Australian Liquidity Centre.
Lower activity in cash equities clearing and settlement services led to a 1.1 per cent decline in revenue for the securities and payments division, which fell to $255.6 million. Additionally, cyclically low capital markets activity affected the listings business, resulting in a 4.8 per cent decrease in total revenue for the division, bringing it to $208.2 million.
Earnings before interest and tax (EBIT) fell by 4.8 per cent to $604.8 million, while net interest income increased by 8.3 per cent to $76.7 million, driven by higher returns on ASX cash balances exposed to the rising interest rates.
Expenses rose by 14.7 per cent to $429.5 million, driven by higher employee costs for regulatory and technology investments, along with increased equipment and administration expenses.
ASX reiterated that its total expense growth rate for FY2023–24 was in line with its previously stated guidance. The group also expects a lower total expense growth rate of between 6 per cent and 9 per cent in FY24–25 as a result of ongoing expense management initiatives.
A final dividend of 106.8 cents per share fully franked has been announced, taking ASX’s total dividends for the year to 208 cents per share – an 8.9 per cent decrease reflecting the dip in underlying NPAT and a lower dividend payout ratio of 85 per cent in FY23–24.
ASX progresses on strategic priorities
The ASX reported “significant progress” in its strategic focus areas of regulatory commitments and technology modernisation during FY23–24.
“During FY24, we embedded new processes to track strategic outcomes, refreshed senior leadership, lifted our risk and technology capabilities, and continued to deepen engagement with stakeholders,” Lofthouse said.
“There is still plenty of work ahead of us, but I want to recognise the contribution of everyone at ASX in driving towards our vision of a new era ASX.”
In June, the ASX shared an indicative technology roadmap that provided a view of major projects, including CHESS Replacement and upgrades to its trading and derivatives clearing platforms.
“In FY24, work delivered under the roadmap included the delivery of new services on the cash market trading platform, migration of multiple data services away from legacy systems, and replacement of infrastructure in our data centre,” ASX said.
Alongside its continued investment in technology modernisation associated with “Horizon 1” of its five-year strategy, the ASX said it also continued to progress work on customer-driven growth opportunities, including supporting customers on the transition to net zero.
Also addressing the Australian Securities and Investments Commission proceedings in the Federal Court against the ASX for allegedly making misleading statements related to its CHESS Replacement project, Lofthouse said the ASX is “carefully reviewing and considering the allegations”.
“We play a critical role at the centre of Australia’s financial markets and continue to focus on supporting and delivering for our customers. We are committed to taking ASX forward, and the progress we’ve made in FY24 underscores our ongoing commitment to the execution of our strategy,” she said.
