ASX profit whacked from bungled CHESS project
ASX chief executive Helen Lofthouse said the looming peak in interest rates and softening inflation should lure more traders back to the sharemarket, pushing back on concerns the outlook for revenue growth remains challenged.
ASX’s shares were more than 2 per cent lower on Thursday at $60.20 after analysts flagged concerns about its 12.3 per cent cost growth – driven by regulatory pressures linked to the failed CHESS replacement program – as revenue slipped 1.2 per cent due to softer equities trading and the dormant IPO market.
ASX’s chief executive Helen Lofthouse welcomed the “resilient” result. Alex Ellinghausen
Investors are also concerned about ASX facing more intense competition from an emboldened Cboe, which looks set to benefit from new laws the government will introduce to lift competitive pressure on the ASX’s clearing and settlement operations behind the CHESS monopoly.
This dragged full-year net profit down by 38 per cent to $317.3 million, saddled by a $173.8 million one-off charge. Its underlying net profit fell 3.4 per cent to $491.1 million.
But CEO Helen Lofthouse said ASX is well-prepared to meet tougher competition head-on, and she expects cash equities trading volumes to bounce back. Providing some hope to investment bankers, she described a “solid pipeline” of companies waiting for an opportunity to float.
“We have been seen some easing of inflation and growing confidence around where interest rates will peak, and those things should lead to more confidence and growth in the cash market, leading to better volumes while driving a recovery in the IPO market,” Ms Lofthouse told The Australian Financial Review on Thursday.
ASX will pay a final dividend of $1.12 a share, fully franked, taking full-year
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