ASX Ltd share price up 3.3% on its report and technology news

Credit: Cimexus

The ASX Ltd (ASX: ASX) share price is up 3.3% so far today after it reported its half-year result for the six months to 31 December 2017.

Below are some of the highlights for the half-year compared to the prior corresponding period:

Operating revenue increased by 5.8% to $409 million. Total revenue, which includes interest and dividend income, increased by 7.8% to $501.5 million.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 5.5% to $312.8 million.

Net profit after tax (NPAT) attributable to ASX shareholders increased by 5.1% to $230.5 million.

Earnings per share (EPS) increased by 5% to 119.1 cents. The dividend per share increased by 5.1% to 107.2 cents, meaning that the payout ratio is 90%.

The company said that the revenue growth was strong despite the subdued equities trading environment. Trading services revenue increased by 8.8% to $104.5 million and listing & issuer services revenue increased by 9.8% to $113.5 million.

The company experienced 6.7% growth of operating costs with staff costs up 2.3%, the ASIC supervision levy increasing by 133%, postage costs increasing by 18% and electricity costs up 82%.

ASX invested $13.4 million in capital expenditure during the half-year and expects the full-year capital expenditure to be around $50 million.

Mr Dominic Stevens, ASX Managing Director and CEO said “ASX has made good progress on many of our core initiatives. We continued to attract foreign (18) and technology (11) companies, with new listings drawn to Australia’s large and deep pool of invest-able capital, expertise in funding early stage enterprises and robust regulatory environment.”

The company also commented on the upcoming change to the CHESS system to improve functionality. Mr Stevens said “After extensive testing and stakeholder consultation, we are confident that DLT will meet the needs of Australia’s financial marketplace for improved functionality and efficiency, and maintain the highest regulatory and operational standards.”

ASX said that it was exploring other routes for growth. Mr Stevens commented saying “Another growth initiative we are exploring is in the area of electronic property settlement. ASX is working with InfoTrack, Australia’s leading provider of electronic conveyancing technology services, to investigate creating an Electronic Lodgment Network Operator – or ELNO – and whether we can leverage our existing infrastructure to generate efficiencies for customers”.

Management left full-year profit growth guidance unchanged at 8%.

Foolish takeaway

I thought this was a pleasing report from ASX, delivered solid growth and a good increase to the dividend of 5%. Increased profit for the full year should see it well placed for growth into FY19 and beyond.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of ASX Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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